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ECONOMIC AND BUSINESS HISTORY PAULA PISA GIBERT
EBH
GREAT OLD IDEAS: PRIVATE PROPERTY
423347 BCE Plato argues in The Republic that rulers should hold property
collectively for the common good.
The Greek philosopher Aristotle argued that “property should be private”.
He pointed out that when property is held in common, no one takes
responsibility to maintain and improve it. Moreover, people can only
become generous if they have something to give away.
1250 CE In classical Roman law the sum of rights and powers a person has
over a thing is called dominium.
GREATOLD IDEAS: JUST PRICES
529534 CE Roman courts protect landowners from being forced to sell
land below the just price, at “great loss”.
Aquinas concluded that a merchant may charge a “just price”, which
includes a decent profit, but excludes excessive profiteering, which is sinful.
This just price is simply the price the buyer freely agrees to pay, given
honest information.
1890 Alfred Marshall proposes that prices are automatically set by supply
and demand.
1920 Ludwig von Mises argues that socialism cannot work because prices
are the only way to establish need.
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ECONOMIC AND BUSINESS HISTORY PAULA PISA GIBERT
GREAT OLD IDEAS: MONEY
3000 BCE In Mesopotamia, the shekel is used as a unit of currency: a unit of
barley of a certain weight equals a certain value of gold or silver.
700 BCE The oldest known coins are made on the Greek island of Aegina.
Kublai Khan adopts fiat money in the Mongol Empire during the 13th
century.
13th century Marco Polo brings promissory notes from China to Europe,
where they are used by Italian bankers.
1696 The Bank of Scotland is the first commercial operation to issue bank
notes.
1971 US President Nixon cancels the convertibility of the US dollar to gold.
GREAT OLD IDEAS: INFLATION
1492 Christopher Columbus arrives in the Americas. Silver and gold flow
into Spain, rising prices in Europe.
Jean Bodin, a French lawyer proved that an abundance of silver and gold
made prices to soar. Prices in Europe quadrupled during the 16th century.
1911 Fisher develops a mathematical formula to explain the quantity theory
of money.
1936 John Maynard Keynes says that the velocity of money in circulation is
unstable.
1956 Milton Friedman argues that a change in the amount of money in the
economy can have a predictable effect on people’s incomes.
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ECONOMIC AND BUSINESS HISTORY PAULA PISA GIBERT
GREAT OLD IDEAS: MERCANTILISM
The mercantilist era, which began in Europe in the 16th century and
continued until the late 18th century. With the rise of Dutch and
English seaborne trade, wealth began to shift from southern Europe
towards the north.
Mercantilists thought the state should behave like a merchant,
growing business, acquiring gold, and actively interfering with the
economy through taxes, subsidies, controls, and monopoly privileges.
c.1620 Gerard de Malynes argues that England should regulate
foreign exchange to stop the nation’s gold and silver from going
abroad.
Englishman Thomas Mun, insisted that what matters is not the fact that
payments are made abroad, but how trade and payments finally balance
out. Mun wanted to boost exports and cut imports.
1791 US A. Hamilton argues for protection of young industries.
GREAT OLD IDEAS: THE PHYSIOCRATS
Physiocrats tried to think bigthey wanted to understand and explain the
whole economy as a system. Their ideas form the foundation of modern
macroeconomics.
The physiocrats believed that nations gained their economic wealth from
nature, through their agricultural sector or the real economy.
They argued that the economy was naturally self-regulating and needed
only to be protected from bad influences. They favored free trade, low
taxes, secure property rights, and low government debt.
Quesnay’s Economic Table was the first empirical macroeconomic model.
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