Explain the concept of the ‘stationary state’ in classical political economy. How did John Stuart Mill’s ideas on the stationary state differ from his predecessors?
Answer: According to Classical economist, there are two states of the process of growth:
I. Progressive State: Capital accumulation is proceeding, either smoothly or erratically in this system. It is a condition of positive economic growth, usually associated with high and rising profits and wages.
II. Stationary State: A stationary state is one in which growth is neither positive nor negative. Generally unwelcomed in classical political economy.
Until J.S. Mill Stationary state was considered undesirable economic state, popularly it was believed that growth benefits all three
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Despite these policies and the wars with which they were associated, the mercantilist period was one of generally rapid growth, particularly in England. It was based on the premise that national wealth and power were best served by increasing exports and collecting precious metals in return. According to this view the benefits to one nation were matched by costs to the other nations that exported gold and silver, and there were no net gains from trade(Zero Sum Game). The period 1500 - 1800 was one of religious and commercial wars, and large revenues were needed to maintain armies and pay the growing costs of civil government. Mercantilist nations were impressed by the fact that the precious metals, especially gold, were in universal demand. Foreign trade was favored above domestic trade, and manufacturing or processing, which provided the goods for foreign trade, was favored at the expense of the extractive industries (e.g., …show more content…
The doctrine of the Physiocrats was based on the axiom that agriculture alone was productive. Any scientific doctrine of economics, if formulated in France at this time, would almost certainly have been based on the primacy of agriculture. France was primary agricultural and French agriculture was a major problem. Just as agriculture was primary, another condition of their doctrine was not to disrupt the laws of nature. This concept led P.S. Dupont de Nemours to coin the word “Physiocrats,”from the Greek, meaning rule of Nature.
Nature was the only resource capable of being productive. This resource produce not only the raw materials and provisions necessary for the industry and commerce and survival of man (food); but was also capable of yielding in addition to the subsistence of laborers and remuneration to its proprietors, a surplus profit for the owners of the resources; the "produit
On the contrary in the North they were purchasing the raw cotton and manufacturing finished products which made their economy more industrial. The differences between the agricultural and industrial economic systems was just one of the causes
The flow of silver from 1500 to 1750 C.E. drastically improved the economies of Latin American nations, which in turned allowed for a global shift in currency and altered trade. Also during this time period there was also a greater desire for global expansion and imperialism, as seen when Europe expanded towards the Americas. Interconnected trade allowed for more contact between various nations, but it also supported the idea that certain nations were superior. While Latin America was the source of the economic prosperity that occurred in this time period, nations such as Europe benefited largely as well; since Spain and Portugal still had control over the areas where silver was being mined, they were able to take the rewards and distribute for their benefit. Documents 2 and 4 describe how silver has become the leading trade object in East Asia.
The time period 600 BCE – 1500 CE was bringing many new innovations to trade throughout Eurasia. The extensive Silk Road connected European countries to the far eastern Asian countries (China and India), allowing the rare goods from China to find their way to European markets. New technologies in maritime trade included the production of lateen sails and dhow’s in the Indian region of trade. These technologies allowed trade efficiency to increase allowing states merchants and governments to make more money. Religious people and Statesmen had different viewpoints on this new wealth accumulation.
Chapter 2 Research Questions Directions: Use pages 30-62 to answer the following. All answers should be typed. Plagiarism of any kind will result in a zero on this assignment. Process the information from your textbook and the internet.
After using resources and assets, the British tried to regain control over the colonies by using an idea called mercantilism. This established that a countries wealth is determined by its gold and silver. This set forth that a country must become wealthy by increasing exported goods. This
The system of Mercantilism required a country to acquire raw materials for their economy, on their own. Therefore, European countries looked to the Americas and Africa as a new source of trade and income. This led to the development of the Atlantic World, where every continent was dependant on the other for offering and manufacturing specific goods. Raw materials from Africa and the Americas were sent to Europe to be manufactured and were then sold back to the places where they originally came from. While this was a mutually beneficial trade system, it led to economic and cultural clashes among different
During the time of the 1650’s the Americas were not a part of what is now the United States and other countries in Central America and as well as the Caribbean. During those years European countries who were dominate in exploring the world and conquering new lands were the British, Spanish, French and the Dutch. The world economy was greatly impacted by the production of goods the Americas could provide Europe and even parts of Asia. The America’s were rich in materials that could not be made vastly, like the production of cotton, crops, tobacco and as well as natural gems like gold and silver that would increase wealth of the country who was exploring the region at the time. The British crown at the time was a powerful nation and if not the most powerful in wealth and military with great number of troops and
Mercantilism was the operating economy system of the time. British main focus was to make sure their colonies exported more than they were required hearsay to import. Colonies provided raw materials for their mother country and existed merely to enrich the mother country. Throughout the 17th and 18th century the British government was starting to become weary with the fact of their North American colonies becoming more superior to the mother country. Since, that cannot be the British government had to impose regulations on colonial trade.
In the Massachusetts Bay Colony the English government benefitted from the mercantilist practices put upon the Puritans. Mercantilism is the practice in which the colonies have to supply England with raw materials and return received manufactured goods. The Bay Colony had a surplus of lumber, beaver pelts, and they were excellent ship builders. They supplied England with all these goods and many more. Also, navigation acts first implemented in 1651 restricted the colonies trade.
America was intensively looking for raw materials and markets for the increasing numbers of both agriculture and industrial products. People constantly
“As the Industrial Revolution spread to the United States, plants such as this textile factory appeared.” (Document 3) Textile factories were a big part in the rapid growth in product production. Textile factories produced clothing and other items that required cloth or cotton. If textile mills weren’t around then the U.S. would have to import all of these items making the economy go down. “In the graphic showing different methods of manufacturing, the cars were being made faster than anywhere else allowing the U.S. to export more than import.”
This created extra goods lowering the prices of the goods. The skills of the
While some were able to benefit others did not for several reasons. Firstly, China who was a dominant power in that era had a high demand for silver. Trade between china and other countries was
This was done by; trade, so by exporting manufactured goods and limiting the number of imports,
INTRODUCTION Economic growth is defined as the increased capacity of an economy to be able to produce goods and services in comparison from one period of time to another. This is figured by the genuine Gross Domestic Product (GDP) and development, and is measured by utilizing genuine terms such as “Balanced Inflation”. These terms help to remove any distorted views on the perceived outcome of inflation on the cost of merchandises produced. Likewise, Economic growth is related to the high expectations in a person’s standard of living. If the standards are high, it wouldn’t be beneficial for the economy as the working class individuals will face a lot of trouble.