All the titles of these chapters provide an implication of the argument made by Gordon. In the first chapter titled, 'The Hamiltonian Miracle, ' ' Gordon explains how Hamilton had to pay off the costs emanating from the revolutionary war through creation of a federal bank which created the first national deficit by assuming the debts from various states. The second chapter, ' 'Andrew Jackson Redeems the Debt, ' ' reviews the events after the 1812 War specifically how the seventh President of the United States used surpluses that had been generated through high tariffs ' 'to rid the Federal Government of debt entirely ' ' and contribute largely to the first depression. The third chapter, ' 'Armageddon and the National Debt, ' ' the books shows the Civil War imposition on America’s first Federal income tax which questioned how the tax burden could have been distributed. In ' 'The Twilight of the Old Consensus, ' ' Gordon provides a trace of the fiscal policy after the end of World War 1 and how it led to the shock experienced during the Great depression.
Capitalism is an economic-political system where the individual and economic freedom is considered primary compulsion for the country 's development. Unlike other economic systems which eclipses the freedom of the market, it creates an environment for self-regulating market system. The ensuing essay focuses on capitalism as the best economic system. It gives a general idea about other economic systems like socialism, communism and fascism in brief and compares and points out the advantages of capitalism over these systems. The essay casts light upon both the pros and cons of the capitalism but takes a positive position and defends the notion of capitalism as the best economic system with arguments which are supported by suitable facts and figures.
Probably one of the major contributors to the classical economics is the economist David Ricardo followed by J-B Say among others. The classical theory represents the economy in the long run with the assumption that prices and wages are flexible. Classical economists believe that the economy regulates itself towards potential output which is equivalent to real GDP when resources are fully employed, therefore for this model, the government intervention is not needed in case of a recession for example. The Keynesian model became popular after the great depression in 1929 and named originally after the economist J.M Keynes. Blanchard (2017) argued, "The history of modern macroeconomics starts in 1936, with the publication of John Maynard Keynes’s General Theory of Employment, Interest, and Money."
Lastly the essay will conclude by offering the authors view on neoliberalism. 2. Liberalism on after John Stuart Mill authored ‘on liberty’ liberalism became associated with him and the ideals presented in his seminal work. Liberalism refers to the right of the individual, it believes that people would not go to war due to mutual dependence that states would have or people have on each other (Cahn,2005:). Liberalism as an economic policy rather than a philosophical ideology was first written about by Adam Smith on 1776 in his book “The Wealth of Nations”.
Mercantilists contended that nations compete for business opportunities. Additionally, they emphasized that a government prospered only at the expense of other countries and concluded that a trade surplus provides the wealth necessary to support international standing and power of the state. Even though mercantilism had no recognized policies, the mercantilists possessed a sound belief in nationalism and most of all a balance or trade. With the end of the Dark Ages and the beginning of the Age of Exploration, the feudal system developed into nations that possessed significant areas of land and the population governed by a centralized state. Now, the people of the country did not have to depend on what it could produce, but, now it could take advantage of
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
Tateh may claim to be a socialist, but due to his thoughts and actions, he displays evidence of capitalist ideologies. To comprehend Tateh’s character, one needs to contemplate Tateh’s life before his introduction within the novel. Tateh’s arrival is identical to that of a typical immigrant, enticed by the promise of wealth and entrepreneurship. “Yet aboard her were only more customers, for the immigrant population set great store by the American Dream” (Doctorow 12).
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.
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
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.