Evolution of Economic Thought

Roman Economic Thought 

The Romans' emphasis on agriculture, trade, and economic law helped to lay the foundation for modern economic thought. They were also expert engineers and builders and created a sprawling system of roads, bridges, and aqueducts, which helped to support trade. Agriculture was another prominent feature of Roman economic thought, and they cultivated advanced agricultural techniques. Roman merchants were skilled, expanding a trading network across the Roman Empire and connecting it to the rest of the world. The Romans made valuable contributions towards creating economic law. They created a sophisticated legal framework to govern all aspects of the economy, from contracts to property and bankruptcy. 

 

Saint Thomas Aquinas 

Saint Thomas Aquinas (1225–1274) was a well-known Dominican friar and philosopher widely regarded as among the most influential thinkers due to his comprehensive learning and sophisticated philosophical and theological concepts. He believed that the economy should be organized in a way to promote the common good.  Precisely, the economy should be based on justice and charity to provide for all people's basic needs. 

His Christian beliefs influenced Aquinas’ economic thinking, and he argued that the economy should have been formed with an aim to serve the common good. He was influential in shaping modern economic thought on such topics as just price, private property, trade, and interest. 

O Saint Thomas Aquinas, wise and true,

Your economic thought inspires anew.

You taught that justice guides the way,

And markets serve the common good each day.

You saw that money is a tool,

To trade and grow, not just a rule.

That prices should be fair and just,

And workers paid their rightful trust.

You warned of greed and avarice,

And urged us to share with those in need.

To use our wealth to help the poor,

And build a world where all are sure.

O Saint Thomas, your wisdom shines,

In markets just and hearts aligned.

May we follow your guidance true,

And build an economy that's good for all, it's true.

The just price: In Aquinas’ view, The just price was the value of the good or service such that both buyer and seller were treated fairly. He contended that the just price should be established around the cost of production plus a reasonable profit. 

Private Property: Aquinas believed that private property is a natural right and should be held based on the natural law to promote economic activity equitably. But he said that private property must be used for the common good. That is to say that landowners are not supposed to engage their land harmfully. 

Trade: Aquinas saw business as a force for good since it enabled citizens to concentrate on their own pursuits while exchanging goods and services with different individuals, creating economic growth and prosperity. He believed in promoting trade while letting the free market function as much as possible.

Interest (usury): He argued that charging interest on a loan was justifiable when it compensated the lender for their opportunity cost, essentially covering the loss of potential earnings. But he was absolutely against usury when it came to taking advantage of poor borrowers with outrageous interest rates, as he believed such practices were immoral because they went against the principles of justice and fairness.

St. Thomas Aquinas’ Ideas continue to cast an impressive and lasting shadow on modern economic theory in Roman economic thought. He introduced moral concerns to bear upon exchange in his notion of the ‘just price,’ which resonates with contemporary discussions about fair pricing and corporate social responsibility. Aquinas’s endorsement of private property rights and social responsibility seems congruent with contemporary discussions about property rights and wealth distribution. His policy positions on trade emphasized the importance of economic growth through globalization and trade policies. Furthermore, Aquinas's ethical stance against usury influenced the development of responsible lending practices and financial regulations, reflecting the enduring relevance of his ideas in shaping an ethical modern economic system.

Written by: Tharushi Ponnamperuma 

References: 

https://www.britannica.com/biography/Saint-Thomas-Aquinas 

https://plato.stanford.edu/entries/aquinas/