Economics as we know it was shaped by great thinkers of yesteryear. Those that were bold enough to express their theories and go against the deep-rooted status quo.
The birth of the theories that are well known in economic circles revolve around three phases namely Pre-modern, Early Modern and Modern.
The Pre-Modern era had empires that grew in leaps and bounds through dominance of various regions. The empires that thrived during this era included The Greeco-Roman Empire, Indian Empire, Persian Empire (modern day Iran), Islamic Empire which was headed by a Caliph and the Imperial Chinese Empire.
The Qin dynasty that fell in the Imperial Chinese Era perhaps made the most pronounced contribution to economics and governance through the embodiment of Central governance, unification of legal code, development of written language and measurement and currency of China. It is also famed for connecting the northern border walls of states they defeated, making the very first Great Wall of China.
Early modern era gave rise to mercantilism and physiocracy. Mercantilism was dominant in modernized parts of Europe between 16th to the 18th Century . It emphasizes and mostly promoted government regulation of a nations economy for purposes of augmenting state power at the expense of rival national powers.
Mercantilism put forth national economic policies that aimed at accumulating monetary reserves through ensuring positive balance of trade- this is a state of having a greater value for exports as opposed to imports more so on finished goods otherwise value addition. This era was key in developing what’s commonly practiced today in form of trade embargoes, comparative and absolute trade advantage, subsidizing exports and monopolizing markets.
Physiocracy on the other hand was developed by French economists in particular Francois Quensay. He upheld among others endorsed agricultural labour as the sole creator of products in a society. It put out a strong case that was derived on sealing the premise of their argument. Production of goods and services was as a result of consumption of agricultural surplus. Agriculture was deemed extremely valuable or in modern day French, it’ll have been in à la mode.
Modern era was dominated by Classical Economists- Adam Smith (father of modern economics), Jean Baptiste, David Ricardo, Thomas Malthus and John Stuart Mill. They championed that the wealth of any nation should be based on trade and not accumulation of wealth. Moreover, they advocated for a free market system where prices of goods and services were determined by the open market and consumers in which the laws of supply and demand are free from any government intervention. They strongly argued their case against monopolies and upheld competition.
Neo-classicals derived their arguments from the classicals but with a bit of finesse . They focused on determination of goods,outputs and income distribution in markets through forces of demand and supply. Their theories hypothesized maximization of utility by income-constrained individuals and of profits by firms facing production costs and employing available information and factors of production, in accordance with rational choice theory.
John Maynard Keynes, another economist who was a proponent of government intervention during recession. He painted an economic situation where in the short run and especially during recession economic output is influenced by aggregate demand which is the total spending.
Why am I writing all this? Well to honor one fallen Economist Kariithi Murimi. A man who had the skill of making sense out of economic jargon. A revolutionary thinker in his own right. Sharp critic on policies pushed by international donor community and financing entities, condemning over-reliance of the government of foreign aid and quick implementation of policies pushed through by the IMF without interrogating their intentions. I posthumously honor this fallen great son of the soil.
Former president Mwai Kibaki and the Secretary General of UNCTAD Dr. Mukhisa Kituyi are other notable Kenyans with great minds on matters economics. They are worth a mention in this piece at the very least.
Image courtesy of https://chskenya.org