Economy

An economy, 'one who manages a household', derived from the noun 'house' is the realized system of human activities related to the production, distribution, exchange and consumption of goods and services of a country or other area.

The composition of a given economy is inseparable from technological evolution, civilization's history and social organization as well as from Earth's geography and ecology. Economy refers also to the measure of how a country or region is progressing in terms of product.

Ancient times

The ancient economy was mainly based on subsistence farming. For most people the exchange of goods occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece, when the word'economy' arose, many people were bond slaves of the freeholders. Aristotle was the first to differentiate between a use value and an exchange value of goods.

Middle Ages

In Medieval times, most exchange occurred within social groups. The discoveries of Marco Polo, Christopher Colombus and Vasco Da Gama led to a first global economy. In 1513 the first stock exchange was founded in Antwerpen.

Early modern times

The European captures become branches of the European states, the so-called colonies. The rising nation-states Spain, Portugal, France, Great Britain and the Netherlands tried to control the trade through custom duties and taxes in order to protect their national economy. Economy, from then on meant national economy as a topic for the economic activities of the citizens of a state.

The industrial revolution

The first economist in the true meaning of the word was the Scotsman Adam Smith. He defined the elements of a national economy: productsss are offered at a natural price generated by the use of competition-supply and demand and the division of labor. He maintained that the basic motive for free trade is human self-interest. The so-called self interest hypothesis became the anthropological basis for economics. The period today is called industrial revolution because the system of production and division of labor enabled the mass production of goods.

Capitalism and Communism

Starting in England, simultaneous related processes of mechanization, led to increases in wealth for the controllers of capital and mass poverty, starvation , urbanization and pauperization for much of the population. This led some, such as Karl Marx and the German industrialist and philosopher Friedrich Engels to describe economy as the 'system of capitalism'. The exploitation of labor and nature by the capitalist is creating a surplus value. The capital will accumulate itself and finally destroy the competition. Therefore the system of communism should liberate the economy from the reign fo capital. The first centrally planned economy was established after the Russian Revolution of 1917 by Lenin.