Economics

This is my stab at the economics lecture from a couple weeks back, again, this is very late so i'm trying to catch up! Have fun reading them - if they make sense that is. Enjoy!

Adam Smith: Smith was a contemporary of Hume and was named one of the key figures of the Scottish Enlightenment and is best known for his two original works - "The Theory of Moral Sentiments" (1759) and "The Wealth of Nations" (1776). The Wealth of Nations is usually deemed Smith's most prominent and profound piece of work as well as the first modern work which detailed economics and it addressed why one nation is wealthier than another. Smith looked at China and why it was a 3rd world country - he came to the conclusion that due to far too much government intervention, for example the Great Wall of China was built to protect them, which ultimately failed and bankrupted the economy.

In terms of wages and labour, Smith stated that in societies where the amount of labour exceeds the amount available for waged labour, then competition among workers is greater than the competition among employers - this means that eventually the wages will fall. However, if you were to flip this on its head, then it means that where revenue is abundant, labour wages rise. Smith argues that, therefore, labour wages only rise as a result of greater revenue disposed to pay for labour. 

Adam Smith says that basic human morality is everyone is living for themselves in order to gain happiness or some sort of ego boost. For example in terms of people donating money to charity, Smith states that people don't donate to charity in order to help other people, they do it so that they can feel superior or develop some sort of standing as a charitable person in society. His ideas are linked very closely to Utilitarianism - maximizing pleasure and minimizing pain - in terms of donating money, it is explained through the amount they donate and this is determined by how highly they value the feeling they gain from it or how little they value their money.

That being said, Smith hates the idea of charity - it leads to what he calls the law of unintended consequences. This in terms of charity, he argues, makes the person receiving the charity more dependent on the welfare and the charity which gives them little to no incentive to get off a system of welfare and get their own jobs.

David Ricardo: Ricardo was a British political economist and stock trader. He credited work, among others are systematising economics, and he was one of the most influential classical economists, along with the likes of Malthus and Smith. Ricardo is noted as being the contribution of the law of comparative advantage - which is a key argument in favor of free trade among other countries. Ricardo believed that there is a mutual benefit from trading - even if one of the people involved with the trade are far more productive.

Thomas Malthus: Malthus was very pessimistic  he stated that it is our destiny to eventually starve to death. This is because there will always be unlimited wants from the people and we only have limited resources which we will blow through in no time. He also claims that we are perpetually on the brink of extinction, for example if we ran out of petrol resources, we wouldn't be able to drive to the shops to buy food or ambulances would stop operating. He says that people being married is a good thing as it would reduce the birth rate which would impede the inevitable starvation - less food would be required and people would be able to hold on to rations. Contraception is also credited for being a huge help to lowering the birth rate, but then this has it's own flaws as we know.

Malthus was heavily criticised by the "moderns" when he talks about the idea of every new mouth needing to be fed and cared for. The moderns pick up on the fact that with every new mouth comes a new pairs of hands.

The Moderns: Adam smith said that money was solely a way to keep score and it has to be kept the same for everyone but the money will not affect a human's nature in any way. Moderns would oppose this view and say that money does have a deep, a very profound impact on people and their choices. War is always good for the economy and it managed to remedy the great depression - this is because it created a multitude of jobs and everyone had something to do - this also managed to rid the world of the "superstition" of gold, this replaced gold with actual notes, coins; real currency (ration slips).

Governments would print extra money, they would give this to factory owners to secure the workers that they employ. This in turn meant more people would have jobs and more people were earning money - this lead to more money being spent which gives the economy a very nice boost which would continue to cycle.  The money that is being fed into the government is taken out and turned into taxation - which is implemented to control spending patterns which means the government would be greatly involved in the market.