Let us recall our distinction between Economic thought – the opinion on economic matters that prevail an any given time in any given society and belong to the province of economic history rather than to the province of the history of economics – and Economic Analysis – which is the result of scientific endeavor in our sense. The history of economic thought starts from the records of the national theocracies of antiquity whose economies presented phenomena that were not entirely dissimilar to our own, and problems which they managed in a spirit that was, in fundamentals, not so very dissimilar either. But the history of economic analysis begins only with the Greeks.
Ancient Egypt had a king of planned economy that turned upon her irrigation system. The Assyrian and Babylonian theocracies had huge military and bureaucratic establishments and elaborate legal systems – of which the code of Hammurabi (about 2000 B.C.) is the earliest legislative monument; they pursued an activist foreign policy; also developed monetary institutions to a high degree of perfection, and knew credit and banking. The sacred books of Israel, especially the legislative portions of them, reveal prefect grasp of the practical problems of the Hebrew state. But there is no trace of analytical effort. More than anywhere else we might expect to find such traces in ancient China, the home of the oldest literally culture of which we know. We find in fact a highly developed public administration that dealt currently with agrarian, commercial, and financial problems. These problems are frequently touched upon, mainly from an ethical standpoint, in the remains of Chinese classical literature, for instance in the teaching of Kung Fu Tse (551 – 478 B.C.) who was himself at two stages of his life a practical administrator and reformer, and or Meng Tzu (Mencius, 372 – 288 B.C.), from whose works it is possible to compile a comprehensive system of economic policy. Moreover, there were methods of monetary management and of exchange control that seem to presuppose a certain amount of analysis. The phenomena incident to the recurrent inflations were no doubt observed and discussed by men much superior to us in cultural refinement. But no piece of reasoning on strictly economic topics has come down ot us that can be called ‘scientific’ within our meaning of the term.
The obvious inference is of course highly uncertain. There may have been analytic work, the records which failed to survive. But there is reason to suppose that there was not much of it. We have seen before that commonsense knowledge, relative to scientific knowledge, goes much further in the economic field than it does in almost any other. It is perfectly understandable, therefore, that economic questions, however important, took much longer in eliciting specifically scientific curiosity that did natural phenomena. Nature harbors secrets into which it is exiting to probe; economic life is the sum total of the most common and most drab experiences. Social problems interest the scholarly mind primarily from a philosophical and political standpoint; scientifically they do not first appear very interesting or even to be ‘problems’ at all.
1. Schumpeter, Joseph A. History of Economic Analysis. New York: Oxford UP, 1954. Print. 52 – 53.