Best Notes for Students of BS ECONOMICS COURSE: HISTORY OF ECONOMIC THOUGHT

1. PLATO
COURSE INSTRUCTOR: USAMA TAHIR

3. PLATO
•Wrote first political science BOOK
– The Republic
– Ideal society and government
•One of Socrates’ students, became great philosopher
• Left behind great number of writings that record ideas
on wide variety of topics, from nature of truth to ideal
form of government.
• The Republic argues that government should be led by
philosophers.
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4.  Plato (429-347 B.C)
 He belongs to city-state of ATHENS.
 His main achievement was DIVISION OF LABOR.
 He also gives the plan of IDEAL SOCIAL STRUCTURE.
 State rise out of the need of mankind.
 He conclude that city arise because of DIVISION OF LABOR, which emerge because
of natural inequalities among human beings.
 The things are produced in plenty. When one does which is natural to him.
 For 2000 years later Adam Smith used the same concept.

5.  There is significant difference in two writer
1) Plato division of labor is the basis of social organization
but Smith, division of labor for those who practice it.
2) Plato, inequalities in human being lead specialization
but Smith stress the specialization for the point of view of
productivity.
3) Plato used this concept for the structure of the society,
he used this concept for an idealization of caste system.

6. • It is a small one with constant number of
citizen, which are administratively convenient.
• Economic and non economic activities will be
strictly regulated.
• His ruler is an ideal one, the ruler will be free
from any motive of economic exploitation.

7. • There are two classes.
1. Rulers 2. Ruled
• Rulers are guardian and ruled are artisans
• Artisans are engaged in the main activities
of production and exchange of wealth.
• The member of ruling class set from
childhood and carefully educated not in
philosophy but art of war. Because they
safe their state.
Classes
Rulers Ruled

8. • Those who pass the exam become the philosopher king and rest hold
administrative duties.
• Plato believe rule by elite
• They do not have any property right beyond the need. They must not
hold land or money of their own.
• If they acquire then, they become housekeeper and husband instead
of guardian.
• Upper class does not have property and family. They are not allowed to
possess silver and gold.

9. • Money need for the purpose of facilitates exchange. Value of money is
independent of the stuff it is made off.
• Foreign trade is controlled. Necessities may be imported but goods are not
export.
• Money should not lent on interest.
• Inequalities will be reduced by imposing ceiling on wealth.
• He did not talk on slavery.
• His political ideas were authoritarian
• He halted war.