One of his observations was that production was improved by assigning specific tasks to individual workers and that this division of labor would increase production by allowing workers to specialize in specific parts of the production process. “The key to economic efficiency is specialization – the division of labour. Specialization has made the process thousands of times more productive.” (Eamonn Butler, 2011). “The greatest improvement in the productive power of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seems to have been the effects of the division of labour.” (Adam Smith, 1776). The division of labour is helpful as it saves time and increases a person’s skills and ability as they are repeated over and over which contributes to the efficiency.
From the cooperation among civilians by a division of labor, to the limitations of government in an effort to achieve a free and competitive market, to the prioritization of the individual profit motive and accumulation of personal wealth, Smith argues that society can succeed in such an environment. Even though Smith’s economic platform revolved around a pre-Industrial Revolution era, his solutions to economic prosperity via the free economy allowed for an adaptable and flexible system. Nowadays, the idea of pursuing one’s own self interest is viewed as narcissistic, and oftentimes overlooked due to the accumulation of personal wealth. Government regulations force wealthy individuals to give a higher portion of their wealth for the betterment of the society, which some may view as unproportionable to their benefits from living in society. Simpler, fairer ways of devising a tax regulation have been proven to promote economic growth, however the current economic platform is seen to be arbitrary and obscure.
There are so many pressing issues which results into negative consequences of the globalized world. One of such tensions is the creation of a free market economy, which promoted a self-enrichment of developed nations against the developing countries in several ways; The relationship between the corporate organizations and the policies of the world bank, International Monetary fund ( IMF) and World Trade organization ( WTO), which were constantly influenced by capitalist states and led to the transfer of investments from developed economies to developing countries that have very weak laws. These corporations end up exploiting the poor people by paying low wages and buy raw materials cheaply in order to maximize profit. According to The Intelligent Economist; it’s a market that promotes the production, sales of goods and services with little or no control from any central government agency, firms and households act in self interest to determine how resources and expenditure are determined, how production is conducted and who buys the product. What is best for businesses and
Classical and Keynesian economic theories translate directly into American politics and fiscal public policy. There are stark contrasts with the Republican’s belief in the classical economic theory and the Democrat’s position to implement fiscal spending based on the Keynesian approach to economic stimulation. This is evident in the presidencies of Ronald Reagan and Barack Obama. The Keynesian approach to influence economic growth has left our country severely in debt without a sound fiscal vision to pay down the national debt to an acceptable level. Both economic theories have their advantages when the economic markets are struggling, finding a balance to debt management and economic soundness is the key to any nation’s economic policy.
As mentioned earlier in this paper, government intervention can be very helpful when the market fails. Without any government intervention, many people in the society can be negatively affected. An example would be the overconsumption of products with negative externalities which is the result of demerit goods. The government can intervene by setting a minimum age for consumption and even hold information campaigns to raise awareness. Government intervention is also necessary when prices of goods and services are rising to protect the consumers and when they're falling to protect the producers.
Stiglitz’s opinions on the ludicrous TARP bailouts and austerity packages have signified governmental flaws in protecting the interests of the 1 per cent. It has changed my perspectives on Laissez-faire Capitalism. Prior to reading this book, I believed that government should refrain from interfering with business activities in order to maintain economic growth and prosperity as a Capitalist society. However, the lack of control and regulations by the state can allow wealthy institutions such as banks to accumulate large sums of debt. Although economic growth and prosperity is necessary for the development of the state, there must be measures and policies to ensure that debt and austerity remains sustainable, mitigating any possibility of a widespread recession.
Jobs boomed when the Transportation Revolution began, for each new way of travel new jobs began to open, which gave more opportunities for people that needed jobs. Economies were affected as well as societies, as the world began to change more and more, more jobs were out there, making more people successful in their lives. The revolution helped make the life of the people, a better one, just because of the successful thinking of a few bright people, the world will forever be
It also depends on the circulation of marketing intelligence across various sectors and company’s acknowledgement in return. Benefits of Market Orientation • Sales growth has a direct impact on market growth. Companies which are more focused towards market orientation, encounter sales outgrowth. • Market growth is proportionally related to increase in market share. This implies that those companies which are more focused on market orientation, experience higher market share.
As most people know and Keynes stated, people spending money will boost the economy. He believed that the circle flow of income was important to economic success because more income would lead to more spending. To understand his theories you need to understand that the true measure of people's prosperity can not be measured by physical assets but it’s national income. The national income is the total of all individual incomes in a country. When your savings are invested and there is more flow, there will be more capacity for goods and services this creates jobs for people and greater prosperity.
Through globalization, people around the world share information as well as goods and services. As a result of globalization, consumers around the world enjoy a broader selection of products than they would have if they only had access to domestically made products. International trade has stimulated tremendous economic growth across the globe-creating jobs and reducing price. As globalization accelerates change in technology, more jobs are created and as a result more people are employed thus increasing their purchasing power. As the demand of consumers rise, more and more products are produced to suit the needs and wants of the people.