Today economics is a subject of its own, with its own books and its own exams. Once it had no room of its own at all and sat tangled up with religion and philosophy. When did it finally stand on its own feet? The story comes in seven steps.
1. Economics in primitive society
Life in primitive society was very simple. Food, clothing and shelter were the basic needs, and little else.
Exchange of goods was very limited. Physical labour of the people was the only means of production.
There was no class division. The guiding principle was “work together, and feel no shame in winning or losing”. Only two matters stood at the centre: production and consumption.
2. Hebrews, Greeks and Kautilya
Around 2500 BC, in the time of the Prophet Moses (peace be upon him), in the Hebrew civilization, simple economic ideas appeared in religious texts and books of philosophy.
Law, religion, morality, philosophy and economics were all discussed together, and economics had no identity of its own. The knowledge of managing production, consumption and daily family life was what people called economics.
The word “economics” comes from the Greek word oikonomia, which means household management.
Two famous thinkers of Greek civilization were Plato (427-347 BC) and Aristotle (384-322 BC). They discussed many basic economic matters: private property, wages of labourers, the slave system and interest.
In ancient India, in the 4th century BC, Kautilya wrote the ‘Arthashastra’. It shed light on the politics, society, economics and military affairs of the whole country.
3. Mercantilism and Physiocracy
From the late 16th to the late 18th century (1590-1780), international trade expanded in England, France and Italy. That expansion is called Mercantilism. All three countries are in Europe.
To grow national wealth, strengthen the power of the state and keep a trade surplus, English merchants exported a lot and imported very little. They sold their manufactured goods abroad and brought back valuable metals and minerals in return: gold, silver, diamonds and the like.
In the middle of the 18th century the French pushed back. Unhappy with the luxurious life of the rich, with heavy taxes and with English Mercantilism, they preached the doctrine of Physiocracy.
The Physiocrats held that only agriculture (including mining and fishing) is a productive sector. Industry and trade are both unproductive.
Look at one country through two pairs of eyes. The Mercantilist counts gold and silver; the Physiocrat counts farms. Drag the exports and see whose verdict changes.
two views, one countrydrag, then switch
Mercantilism against Physiocracy
The numbers of crates are made up to show the idea; they are not the book's.
4. Adam Smith, and the whole sequence
In 1776 the English economist Adam Smith wrote “An Inquiry into the Nature and Causes of the Wealth of Nations”. With it, political economy was recognised as a separate subject. That book is the base of modern economics.
Now put five statements under the five names they belong to. Keep Mercantilism and Physiocracy apart, and keep the Greek and Indian sources apart too.
sort thempick a chip, place it
Who said what?
Pick up a chip, then drop it in the box of the person or school it belongs to.
Right. Next one.
Not yet. Ask when and where the idea comes from. Remember that Physiocracy was set against Mercantilism.
All in place. The Greeks thought about property, wages, slavery and interest; Kautilya about the running of a whole country; the Mercantilists about exports and metals; the Physiocrats about farming; and Smith wrote the 1776 book.
So the whole line runs: primitive society, Hebrew civilization (2500 BC), Greek thinkers, Kautilya (4th century BC), Mercantilism (1590-1780), Physiocracy, and Adam Smith (1776). Exams ask you to write exactly this order. Tap each stop and see what it added.
periodstap each stop
The Journey of Economics
Physical labour was the only means of production, and exchange was limited.
The Hebrew civilization: simple economic discussion in the scriptures.
Plato (427-347), Aristotle (384-322), and the word oikonomia.
Kautilya's Arthashastra: politics, society, economics and military affairs.
Mercantilism: the growth of trade in England, France and Italy.
Physiocracy: the French doctrine against Mercantilism, saying farming is productive.
Adam Smith's Wealth of Nations: economics becomes a subject of its own.
Now build the line yourself. Use the dates to decide what came after what.
which firstearliest first
Put in time order
Which is the earliest civilization here? Think of 2500 BC.
Yes. Then?
Not yet. This one came later: check the dates. The Greeks and Kautilya are BC, Mercantilism is 1590-1780, Physiocracy came against it in the mid 18th century, and Smith is 1776.
Right order: Hebrew, Greek, Kautilya, Mercantilism, Physiocracy, Adam Smith.
5. Check yourself
Three questions, starting with the first.
check yourselfpick one answer
Question 1
Who wrote "An Inquiry into the Nature and Causes of the Wealth of Nations"?
Plato was a famous thinker of the Greek civilization. The right answer is Adam Smith.
This option does not match the book. Adam Smith wrote this book in 1776, and it is the base of modern economics.
Aristotle was a famous thinker of the Greek civilization. The right answer is Adam Smith.
Right. Adam Smith wrote this book in 1776, and it is the base of modern economics.
Keep the dates in mind for the second.
check yourselfpick one answer
Question 2
Whose merchants exported more in order to increase state power?
This option does not match the book. Under Mercantilism English merchants exported more to increase the state's power.
Right. Under Mercantilism English merchants exported more to increase the state's power.
This option does not match the book. Under Mercantilism English merchants exported more to increase the state's power.
The Greek civilization had Plato and Aristotle, and the word oikonomia is Greek. The right answer is English merchants.
One more to finish.
check yourselfpick one answer
Question 3
From which word does "Economics" come?
Right. "Economics" comes from the Greek word oikonomia.
This option does not match the book. "Economics" comes from the Greek word oikonomia.
This option does not match the book. "Economics" comes from the Greek word oikonomia.
This option does not match the book. "Economics" comes from the Greek word oikonomia.
The whole note on seven cards.
cut from the notetap to turn over
Seven cards
QuestionWhat was the only means of production in primitive society?
AnswerPhysical labour
QuestionFrom which word of which language does "economics" come?
AnswerThe Greek word oikonomia
QuestionWho were the two famous thinkers of the Greek civilization?
AnswerPlato and Aristotle
QuestionWho wrote the Arthashastra and when?
AnswerKautilya, in the 4th century BC in ancient India
QuestionIn which period and which three countries did Mercantilism spread?
Answer1590-1780; England, France and Italy
QuestionWho preached Physiocracy and against what?
AnswerThe French, against English Mercantilism, the rich people's luxury and heavy taxes
QuestionIn which year and which book did Adam Smith write?
AnswerIn 1776, "An Inquiry into the Nature and Causes of the Wealth of Nations"