Elgar original reference
Edited by David Parker and David Saal
William L. Megginson and Jeﬀry M. Netter Historical background One truth dominates economics: resources are scarce. Because resources are scarce, individuals and societies must make choices. The choices include what to produce, how to produce and for whom to produce. And it must be determined what is the appropriate role of markets versus state mandates in answering all the above questions. As Edmund Burke said in 1795, ‘one of the ﬁnest problems in legislation [is namely to determine] what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual discretion’ (Middelton, 1996:41). Intrinsic to answering the above questions is who should own the means of production and direct commerce. Throughout history, there has been a mixture of public (often including religious institutions) and private ownership of production and commerce. Sobel (1999) writes that state ownership of the means of production, including mills and metal working, was common in the ancient Near East, while private ownership was more common in trading and money lending. The Bible mentions money lenders, who were essentially bankers (Means, 2001:3). In ancient Greece, the government owned the land, forests and mines, but contracted out the work to individuals and ﬁrms. The rise of state owned-banks also occurred in Greece at essentially the same time. In the Ch’in dynasty of China, the government had monopolies on salt and iron but by the 1500s had developed sophisticated markets...
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