3-rd topic. The most ancient economic theories

The part of ancient economic theories that show relation between economic activities and ideological matters of human behavior is due to  Babylonia (XIX-XVI centuries BC).

We see the classical form of government intervention to economic agent’s activity in the example of this ancient kingdom. Historical sources show that, the distribution of land to the people of the King, on the one hand is caused to strengthening of private property and strengthening the rent relations, on the other hand, made the basis for serious social problems.

Thus, the concentration of land in the hands of certain groups of people led them to become extremely rich. But, the other parts of the population were quite poor, as a result, borrowed from wealthy group, were dependent on them, and at the end were slaves.

As a solution way from this problem, the government defined new principles for legislation bases and rules to protect special legislative relations and to weaken the dependence from creditors. King Hammurabi’s lows were the most interesting and important economic ideas of that period (1792 – 1750 BC). He developed the laws; at the same time adopt new lows that caused to socio-economic development of the society. His code of low defined the legal system of government management mechanism, economy and behavior rules of people.

The lows about protection of the larges owners, rent, trade, usury, employment were importnat progress in the field of economic theory.

The other important issue here is that, the main magistral of these lows was the principle of “not to destroy poors by powerful people”.

In Hammurabi’s lows against usury were defined that, the contract time should prolonged for unpaid debts, also without any interest payments. These lows were defined that, the creditor can’t confiscate debtor's grain without his consent about that.

Also, the limit for usury was defined strictly. The limit for usury in-cash was 20% and for usury in-kind was 33%. In accordance with these laws, the creditors should be punished for harsh treatment against debtors.

In these lows were defined that, if the slave owner sells debtor’s wife, son or daughter instead of debt, they should serve to their owners, but they should be set free after three years.

Thus, we see definition of economic agents’ behaviors as a target of government policy under the Hammurabi’s low regarding cattle-breeding,
mastery and trade in ancient Middle East countries.

Strictly restriction of usury In Hammurabi’s lows focused under the idea that, the people’s wishes about extremely earning are threat for justice and social well-being in the society. Even, requiring the principal amount from debtors by creditors was legal, harsh treatment was unacceptable. It is clear approving of the idea that, the economic right every time and every ere is below than moral values.

 

Some materials were used from the book of “The history of economic studies” published under  editing by M.Meybullayev

 

Aghanemat Aghayev