Some Broad Generalizations

Some Broad Generalizations

Modern economic theory finds the source of all economic problems in relative scarcity. Scarcity is a result of our desire to consume more goods and services than our society can produce. Modern economies are market economies; thus, modern economic theory focuses on how markets help to deal with the problems of scarcity and gives much less attention to the use of force, authority, and tradition. The early preclassical thinkers reflected on aspects of their economic lives but gave greatest attention to nonmarket-allocating mechanisms. Unlike modern economists, who are especially concerned with the efficiency of resource allocation, the early Western preclassical thinkers considered the consequences of various types of economic activities for justice and the quality of life.

Although there was growth in market activities, as well as a growth in the size of cities, increasing improvements in transportation, and improved and more efficient methods of producing goods, in the 2,300 years spanning the Greek period to the end of scholasticism, the fundamental economic structure of society did not change significantly during this time. People were not dependent on others to produce the goods they consumed or on markets to acquire these goods, but were for the most part self-sufficient. Thus, early preclassical writers were not interested in markets because of the relative unimportance of markets in the daily activities of people. One of the most significant differences between early preclassical and modern orthodox economic thought concerns the mechanism for resource allocation. In a premarkct setting, thinkers focused on the use of authority as an allocator of resources.

The early writers had little notion of the meaning and implications of scarcity and how markets coordinated individual activities. This observation does not denigrate the accomplishments of these intellectuals, for it was a long and tortuous road to recognizing the meaning and implications of scarcity and realizing that an economy existed that was capable of analysis. Historians of economic ideas acknowledge that the early writers identified a number of concepts and tools that enabled later writers to understand the developing market economy.

Two important themes emerge from early preclassical doctrine. One concerns the level of inquiry appropriate for analyzing society. These writers believed that it was inappropriate to separate any particular activity-economic, for exam­ple-from all other activities. The very ability to make such abstract separation represents part of the intellectual apparatus necessary for the "birth" of eco­nomics and the other social sciences. It is ironic that although the Greek writers, Arab-Islamic scholars, and St. Thomas Aquinas rejected the artificial separation of activities, in their development of abstract reasoning they gave the social sciences a significant and prerequisite building block.

A second theme is the focus on broad philosophical issues, giving particular attention to questions of fairness, justice, and equity. The preclassical writers examined exchange and price with the purpose of evaluating their fairness, justice, and equity. Such concern makes sense in a premarket society. These two themes-the illegitimacy of abstraction and the focus on equity-can also be found within a good deal of heterodox economic writing from the eighteenth century to the present.