Kahneman's Rational Economic Model

What is Liberalism? Was it the only factor that brought about the American and Mexican Revolutions? If involved in both revolutions, why were the outcomes so different? What other component determined the result of each war? According to the Merriam-Webster Dictionary, Liberalism is the “belief in the value of social and political change in order to achieve progress.”1 Originating in Europe, it arose during a period known as the Enlightenment, when men had the idea that if something could not be proved by logic or reasoning, it was not to be believed, and that the main aspects of human life were to be mathematical measurement and deduction and scientific experimentation.2 Liberalism was arrived at when people began to “seek for the natural laws that govern and direct human societies.”3 It focuses mainly on individualism and equality for all people.

All that this condition amounts to, then, is that there must be some discernible regularity in the world, which makes it possible to predict events correctly.” Yellen is doing exactly what Hayek predicted would happen, trying to influence economic factors such as directing interest rates to control the proverbial bubble from popping. Yellen is the epitome of the Keynesian theory, which is to manipulate economic conditions and steer it into a particular direction (i.e. : lowering interest rates and stave-off unemployment). “The founding patriarch was John Maynard Keynes, Yellen’s hero. Keynes was a member of the Bloomsbury group.

He was famous as the "Great Pacificator" for his contributions to domestic policy and his emphasis on economic development in his diplomacy. He was a nationalist, devoted to the economic development and political integration of the United States. Most importantly, by 1836, he was an important figure in starting the Whig Party, the second official political party in the country. Such parties were seen as important parts in mass democracy. As mentioned previously, Clay's policies were based on economic development, so this was in favor of people who opposed the policies of the democratic party led by Andrew Jackson.

This liberal outlook offered a new analysis of economic nationalist by arguing that protectionism and restriction of economic activity were actually impoverishing states. The Marxist theory emerged during the 19th

Neoliberalism can be compared to a laissez-faire approach to economics which favors the privatization of public services and limits government regulation and size. According to Jonathan D. Ostry, the two main roles of a government with a neoliberal agenda are to increase competition through deregulation by opening up domestic markets to international competition and to limit the debt accumulated by the state. In 1970 the economy had become stagnant and inflation was rising, so Ronald Regan, with the help of intellectuals like Milton Friedman, made the case for neoliberalism and convinced the American people that they needed less government interference so that markets could function freely and promote growth (Sparke 456). Neoliberalism and Reaganomics jointly fueled globalization and drove competition which helped flatten the world playing field, as Friedman would

4BCT - Ronan Carr (12363236) 20th November 2015 CT436: Business Ethics Essay Analyse Milton Friedman’s position that the only social responsibility of a business is to increase its profits for its shareholders. Do you agree? Discuss in relation to examples from the IT industry. Milton Friedman was an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy. In 1970 Friedman wrote an article in The New York Times Magazine, where he says he believes the social responsibility of a business is to increase its profits.

The influence of inequality on the economic growth has been debatable topic over the years. Different economists argue about linkage between the low economic growth and inequality level, while others claim that the latter directly prompts the economic improvement. Chris Tilly, who is working as a professor of Urban Planning department at the University of California, has written book overview for undergraduate students in 2004. The main goal of the author is to show the benefit of income equality on the economic growth with the help of refuting counterarguments and analyzing different cases. Also, he briefly presents the essential economic theories of how inequality constrains the efficiency and asserts that the economic growth can boost in

Adam Smith is an 18th-century philosopher and free-market economist. He is known as the father of economics and is famous for his ideas about the efficiency of the division of labor and the societal benefits of individuals ' pursuit of their own self-interest. Smith is best known for two classic works: The Theory of Moral Sentiments, and An Inquiry into the Nature and Causes of the Wealth of Nations. The latter, usually known as The Wealth of Nations, is the first modern work of economics and the book which is considered in this research. This research will discuss chapter four of The Wealth of Nations (WN), specifically Smith’s paragraph of water diamond paradox.

David Ricardo’s work “On The Principles of Political Economy and Taxation” written in 1817 is the example of classical writings about economics. The point Ricardo makes in Chapter 7 “On Foreign Trade” is generally that trade is beneficial and a basis for trade is comparative advantage (1817). The essay states that comparative advantage can be a reason for international trade; however there are still problems with its implication in practice. To prove that this paper will first explain Ricardo’s comparative advantage theory. Second, it will provide an example of Kazakhstan and Russia for more explanation.

X. Utilitarianism Before Socialist European views existed a Utilitaristic economic ideal. In the late 1700s, English philosopher Jeremy Bentham introduced the philosophy of utilitarianism to the European people. According to Bentham's theory, people should judge ideas, institutions, and actions on the basis of their utility, or usefulness. He argued that the government should try to promote the greatest good for the greatest number of people. In his case, a government policy was only useful if it promoted this goal.