Date post: | 16-Jan-2016 |
Category: |
Documents |
Upload: | philip-johnston |
View: | 214 times |
Download: | 0 times |
• Morals• Justice• Property Rights
Concepts: Economics First Economic Revolution
• Division of Labour• Money• The Market Concepts: Retailing/ wholesaling
1. Study of the Institutions in the Long Run
The Wealth of NationsThe Wealth of Nations
Adam Smith’s Theory
2. The Value of goods
● Production-cost value
or labour commanded value:
P = F (W, P, R) Concept: Interest rate
●Natural / Market price Current concepts: Demand/ supply curves
●Nominal / Real Price
The Wealth of NationsThe Wealth of Nations
3. The Productivity
The increase of productivity is due to:
DIVISION OF LABOUR
Causes: Improves workers skillSaves timeFosters machine-invention
Limits:The extent of the market Workers “alienation”
The Wealth of NationsThe Wealth of Nations
The increase of productivity is due also to:
THE DEFINITION OF PROPERTY RIGHTS
THE ACCUMULATION OF CAPITAL (savings)All savings are invested
Wages theory:Wages as an incentive
Wages-fund theory
Stationary state
The Wealth of NationsThe Wealth of Nations
DL1
DL0
DL3
W
L
DL2
SL1SL2
SL0
SL3
W sub
.2.1.0.3
SLn-m
DLn-m
.n-m
CAPITAL ACCUMULATION
Growing path
Adam Smith
Stationary State
4. Against State Intervention• The Invisible-hand or
the principle of beneficial unintended consequences
• AGAINST MERCANTILISM
The Wealth of NationsThe Wealth of Nations
RELATED CONTEMPORARY CONCEPTS:
Competition / collusion
Wealth; Gross National Product (GNP); Gross Domestic Product (GDP)
Consumer Price Index (CPI); Inflation
Unemployment rate (Keynesian Economics)
Mercantilism “Decalogue”
1. National Strenght
2. Zero sum game
3. Money is wealth
4. Positive Balance of Trade
5. Preference of Industry over agriculture
6. Protect infant industry
7. Royal factories
8. Utility of poverty
9. Population policies
10. Colonialism
ECONOMIC HISTORY
GDP nominal per capita world map IMF 2012
Singapore case
Inflation rates around the world in 2010
Countries by unemployment rate, 2009
http://www.heritage.org/index/ranking?src=home