History of economics Essay Example | Topics and Well Written Essays - 500 words

History of economics - Essay Example Before the evolution, slave trade was the only trade that people knew and they considered it an economy. During the sixteenth century, people were uncivilized and war was known to be the main economic activity (Canterbery 18). Many economists have come up with many theories to explain the history of economics. The western history of economics is divided into four theories (Deane 1). 1. Classical Greek: This period is also referred to as the feudalism (survival for the fittest). This is a time when political philosophy focused on ethical problems of the Aristocratic slave based. This was a time when people stopped slave trade and there was no economy and people only produced the necessities like food, clothing, and shelter. 2. Mediaeval Scholastic: During this era, economics was a clerical monopoly and the mediaeval economic ideas were essential. Individual economy behavior was relevant in the market economy rather than exchange economy which actually worked. 4. Modern: During the eighteenth century, Adam Smith, a French physiocrat, came up with the study of economics as a distinctive discipline, a science and a technique of analysis, and it was a time when economics was introduced to the people and everyone understood the essence of the economy. The two economic ideologies (classical Greek and mediaeval) which came up were mainly historical. The Greek and Mediaeval was based on political and theological interest and the approaches had little to do with modern economics. The mercantilist theory was developed during the seventh century. Mercantilists described economics as the art of managing a state, and they had created the element of demand and supply. They developed theories of interest rate, which had factors like yield of investment in the capital stock and the supply of loanable funds (Deane 3). The main focus was on external trading relationship on nations,