In the year of 1776, Adam Smith published a book under the title An Inquiry into the Nature and Causes of the Wealth of Nations. This is the book which had become the gospel of economic liberalism, and the textual symbol of British economic supremacy and United States economic reform in the 1980s. In fact, most of the crusading fervent shown by the ruling government of both nations during that times in economic and social policy was justified in the name of Adam Smith. In Britain, for example, the cult of entrepreneurship and rhetorical attacks on social welfare made by Margaret Thatcher had clearly shown that she took the Wealth of Nations as her inspiration. On a different plane, one could fairly expect that the articles written by the
Amongst the most influential and prominent economists of the last few centuries, Adam Smith and Karl Marx, are noted for their distinct theoretical contributions. In his watershed Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith proposed that the free market, where producers are free to produce as much as they want and charge consumers the prices they want, would result in the most efficient and desirable economic outcome for consumers and producers alike due to the “Invisible Hand.” The rationale for his proposal was that each individual would try to maximize his own benefit. In doing so, consumers would only pay as much as or less than they would value the benefit derived from a good, and producers would only sell
It was these movements that paved the way for an emerging ideology, neoliberalism, which promised individual autonomy, greater choice, personal responsibility, and meritocratic advancement (McGregor, 2001; Sample, 2002; Fraser, 2013). At the macro level, neoliberalism promotes free trade, privatization, less state interference, and deregulation. The neoliberal ideal places the market in a position of paramount importance and endorses the belief that all human activity should be brought under its scope of influence (Sample 2002; McGregor 2001). Correspondingly, efficiency is viewed as the most important function of the economic system. Neoliberal enthusiasts feel that the most efficient way to allocate resources is by releasing private enterprise from Government imposed regulation and distributing them through mechanisms of the market.
Adam Smith, David Ricardo or Karl Marx are known for many as the pioneers of contemporary economies. Their Work and researches were the bases of most of nowadays economic models used by countries around the world. Adam Smith, David Ricardo and their followers were labeled as the classical economists when later on Karl Marx and his followers were labeled as the Marxists. These two economic schools were some of the biggest in history, but yet differed in many ways. Through this paper, we would discuss the says of the Classical and Marxism schools concerning their views on wages, their different opinions about the theory of value, their sides about capital accumulation and finally the different point of view of the schools regarding the diminishing returns.
According to Karl Marx, capitalist enter the market already possessing capital more especially money. This is with the aim of investing and expanding the business by converting the money into a commodity by buying machinery and then turns the commodity with cash which is higher than the initial amount, hence making profits. Karl Marx did a great job therefore in explaining what it means to live in a world where giving and taking is the norm daily. From his writings, Karl Marx seemed as though he was predicted the future, and telling the world, which no matter what time they live in, the commodity is essential and is needed in everyday life. Karl Marx defined commodity as the use-value and value of an item.
Furthermore, it is the transfer from manufacturing to factory, freedom of competition and the cancellation of customs barriers. The main policy is the well-known promotion of free competition and that through private interest of producers the market economy will find the best solutions to all social complications. In other words, Smith represented the idea that the government should fulfill three main responsibilities: costs on public works, the costs of military security, the costs of justice administration including the security of property
Everyone should be empowered to create, innovate, and produce. By increasing productivity, surplus arises, allowing others as well as ourselves to become better off, overall bettering our economic system. We still would have the drive to generate more wealth and income because all we want is more and to have the ability to pass wealth down for
The main concern of the classical economists was about a surplus of the economy in regarding to its formation, its distribution among different classes in the economy and its utilization (either luxury or for investment). The classical focus more in favouring investment as the best way for surplus utilization since in the long run it can facilitate expansion in capital formation, hence ‘wealth of a nation’ (Felderer and Homburg 1992: 15). The classical theory begins with the theory of absolute advantage that was advanced by Adam Smith. Smith advocates for a free market in the absence of the government regulations for the perfect competitive to exist in the market so as to promote trade (Smith 1776). Smith uses the idea of division of factor of production i.e.
History of Economics Adam Smith (1723-1790) laid down the basis of what we know today as Economics through his book An Inquiry into the Nature and Causes of the Wealth of Nations. Smith is popular thanks to his principle of the “the invisible hand”. He was the first to state that nations are richer or not depending solely on their productivity.1 David Ricardo (1772-1823) introduced the law of comparative advantage through his foundation book On the Principle of Political Economy and Taxation. He is also regarded as the father of the Rent Theory. The Ricardian Rent Theory states this: economic rent (net profit) is generated due to competitive factors that are limited in supply (uniqueness) and cannot easily be transferred from one company
Economic capital is wealth and income one accumulates, while cultural capital is the “possession of knowledge, accomplishments, formal and informal qualifications embodied by individuals” (Johnson, 2009, p.51). Applying Bourdieu’s class theory on contemporary society, I believe economic capital is considerably more valuable than cultural capital. In this essay, we will explore the value of cultural capital and economic capital in the pursuit of education and healthcare services’ affordability and accessibility. Education is known to be the most relevant platform that provides equal chance for everyone to achieve a bright future and an enjoyable life; and cultural capital has established itself, through various studies, to have an undeniable positive impact on our academic results. Conclusion from