Economists
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| ADAM SMITH |
•Adam Smith (baptised June 5, 1723 / June – July 17, 1790)
* a Scottish moral philosopher and a
pioneering political economist.
* He is a major contributor to the modern
perception of economics.
* One of the key figures of the
intellectual movement known as the
Scottish Enlightenment,
*
Father
of Modern Economics
* “ An Inquiry Into the Nature and
Causes
of the Wealth of Nations”
* Free
trade
*
capitalism
* invisible hand
* laissez – faire doctrine
In economics, the invisible hand, also
known as invisible
hand of the market, is the term economists use to
describe the self-regulating nature of the marketplace.
This is a metaphor first coined by Smith in The Theory
of Moral Sentiments, and
used a total of three times in his writings.
For Smith, the invisible hand was
created by the conjunction of the forces of self-interest, competition, and supply and demand, which he noted as being capable
of allocating resources in society.
•In economics, laissez-faire describes an environment
in which transactions between private parties are free from state intervention, including
restrictive regulations, taxes, tariffs and enforced monopolies.
•The phrase laissez-faire is Frenchand literally means "let do", but it
broadly implies "let it be", or "leave it alone."
•Free trade is a system of trade policy that allows traders to trade across
national boundaries without interference from the respective governments.
•Capitalism is an economic system in which the means of production are privately owned and operated for profit. Income in a Capitalist system
takes at least two forms, profit on
the one hand and wages on
the other.
He is known primarily as the author of two treatises: The Theory
of Moral Sentiments (1759), and An Inquiry into the
Nature and Causes of the Wealth of Nations (1776). Smith's work helped to create the modern
academic discipline of economics and provided one of
the best-known intellectual rationales for free
trade, capitalism, and libertarianism. The
Wealth of Nations was influential since it did so much to create the
field of economics and develop it into an autonomous systematic discipline.
•Adam
Smith was best known for his "laissez-faire"
economic theory that
denounced guilds in 18th century Europe. Smith believed in the right to
influence your own economic progress freely, without the puppet strings of
guilds and/or the state. His theory caught on in proto-Industrialization
Europe, and changed much of Europe into a free trade domain, allowing the
emergence of the entrepreneur.
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| DAVID RICARDO |
•a political economist, is often credited with systematizing
economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. He was also a businessman, financier and
speculator, and amassed a considerable fortune.
* wrote “Principles of Political Economy
and Taxation”
* labor
theory of value
( prices do
not correspond to the value
of labor but an approximation)
*
theory of comparative advantage
(even if a
country could produce everything more
efficiently than another country, it
would reap gains from specializing in
what it was best at producing and
trading with other nations.
Comparative advantage forms the
basis of modern trade theory, reformulated as the Heckscher-Ohlin theorem.
( a country has a
comparative advantage in the production of a product if the country is
relatively well-endowed with inputs that are used intensively in producing the
product.)
•the law of diminishing returns (also law of diminishing marginal returns or law of increasing relative cost) states that in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower per-unit returns.
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| ABRAHAM HAROLD MASLOW |
•considered
the father of Humanism in psychology.
Maslow
postulated that needs are arranged in a hierarchy in terms of their potency.
Although all needs are instinctive, some are more powerful than others. The
lower the need is in the pyramid, the more powerful it is. The higher the need
is in the pyramid, the weaker and more distinctly human it is. The lower, or
basic, needs on the pyramid are similar to those possessed by non-human
animals, but only humans possess the higher needs.
The first four layers
of the pyramid are what Maslow called "deficiency needs" or "D-needs:" the individual does not feel anything if they
are met, but feels anxious if they are not met. Needs beyond the D-needs are
"growth needs," "being values," or "B-needs." When fulfilled, they do not go away; rather,
they motivate further.
The base of the
pyramid is formed by the PHYSIOLOGICAL NEEDS, including the
biological requirements for food, water, air, and sleep.
Once the physiological needs are met, an
individual can concentrate on the second level, the NEED FOR SAFETY AND SECURITY. Included here are
the needs for structure, order, security, and predictability.
The third level is
the NEED FOR LOVE AND BELONGING. Included here are
the needs for friends and companions, a supportive family, identification with
a group, and an intimate relationship.
The fourth level is the ESTEEM NEEDS. This group of needs
requires both recognition from other people that results in feelings of
prestige, acceptance, and status, and self-esteem that results in feelings of
adequacy, competence, and confidence. Lack of satisfaction of the esteem needs
results in discouragement and feelings of inferiority.
Finally, SELF-ACTUALIZATION
sits at the apex of the original pyramid.
In 1970 Maslow published a
revision to his original 1954 pyramid , adding the
cognitive needs (first the need to acquire knowledge, then the need to
understand that knowledge) above the need for self-actualization, and the
aesthetic needs (the needs to create and/or experience beauty, balance,
structure, etc.) at the top of the pyramid. However, not all versions of
Maslow's pyramid include the top two levels.
Maslow theorized that
unfulfilled cognitive
needs can become redirected into neurotic needs. For example,
children whose safety needs are not adequately met may grow into adults who
compulsively hoard money or possessions. Unlike other needs, however, neurotic
needs do not promote health or growth if they are satisfied.
Maslow
also proposed that people who have reached self-actualization will sometimes
experience a state he referred to as "transcendence," in which they
become aware of not only their own fullest potential, but the fullest potential
of human beings at large. He described this transcendence and its
characteristics in an essay in the posthumously published The
Farther Reaches of Human Nature.
In the essay, he
describes this experience as not always being transitory, but that certain
individuals might have ready access to it, and spend more time in this state.
He makes a point that these individuals experience not only ecstatic joy, but
also profound "cosmic-sadness" (Maslow, 1971) at the ability of
humans to foil chances of transcendence in their own lives and in the world at
large.
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| JOHN MAYNARD KEYNES |
•A British economist whose ideas, called Keynesian economics, had a major impact on modern economic and
political theory as well as on many governments' fiscal policies.
•He
advocated interventionist government policy, by which the government
would use fiscal and monetary measures to mitigate the adverse effects of
economic recessions, depressions and booms.
•His
expression "In the long run, we are all dead" is much quoted.
•In
his magnum opus, The
General Theory of Employment, Interest, and Money, Keynes laid the foundation for the branch
of economics termed "Macroeconomics" today. The view that for given prices
and wages income determines demand, pre-dates Keynes.
• His
core argument is, “prices and wages as perfectly flexible and
establish that the interaction of "aggregate demand" and "aggregate supply" may
lead to stable unemployment equilibria.” His work on employment went against the
idea that the market ultimately settles at a state of full employment. This
idea underlies the choice of the title "General Theory": the
classical theory being just a special case.)
•Keynes
suggested in the General Theory that inflation would occur only near "full
employment" (in his sense), but it has been observed in many cases that
inflation creeps up in states of severe underemployment (Stagflation).
•Keynes
held that the cause of unemployment is a too high rate of savings, or
insufficient investment expenditure. He conjectured that the amount of labour
supplied is different when the decrease in real wages is due to a decrease in
the money wage, than when it is due to an increase in the price level, assuming
money wages stay constant. This conjecture relates to the "actual
attitudes of workers" and is "not theoretically fundamental“.
•In
his Theory of Money, Keynes said that savings and investment
were independently determined. The amount saved had little to do with
variations in interest rates which in turn had little to do with how much was
invested. Keynes thought that changes in saving depended on the changes in the
predisposition to consume which resulted from marginal, incremental changes to
income. Therefore, investment was determined by the relationship between
expected rates of return on investment and the rate of interest.
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| MARIE ESPRIT LEON WALRAS A French economist, considered by Joseph Schumpeter as "the greatest of all economists". He was a mathematical economist associated with the creation of the general equilibrium theory A French economist, considered by Joseph Schumpeter as "the greatest of all economists". He was a mathematical economist associated with the creation of the general equilibrium theory |
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| ALFRED MARSHALL
He became
one of the most influential economists of his time. His
book, Principles
of Economics (1890), brings the ideas of supply
and demand,
of marginal utility and of the costs of production into a coherent
whole. It became the dominant economic textbook in England for a long period.
Among
his contributions are :
•The
price elasticity
of demand was
presented by Marshall as an extension of these ideas. Economic welfare, divided
into producer surplus and consumer surplus,
• most
famous for his analysis of history, summed
up in the opening line of the introduction
to the Communist Manifesto (1848):
"The
history of all hitherto existing society is
the history of class struggles."
• Marx believed that capitalism would be replaced
by socialism which in turn would bring upon
communism.
The following
countries had governments at some point in the twentieth century who at least
nominally adhered to Marxism (those in bold still do as of 2006): Albania, Afghanistan, Angola, Bulgaria, China, Cuba, Czechoslovakia, East Germany, Ethiopia, Hungary, Laos, Moldova, Mongolia, Mozambique, Nicaragua, North Korea, Poland, Romania, Russia, Yugoslavia, Vietnam.
Marxist political
parties and movements have significantly declined since the fall of the Soviet
Union, with some exceptions, perhaps most notably Nepal.
THOMAS ROBERT MALTHUS
• known as Robert Malthus, although he preferred to be known as Thomas Malthus
In An
Essay on the Principle of Population, first published in 1798, Malthus made the famous prediction that population would outrun food supply, leading to a
decrease in food per person. He even
went so far as to specifically predict that this must occur by the middle of
the 19th century, a prediction which failed for several reasons, including his use
of static analysis, taking recent
trends and projecting them indefinitely into the future, which often fails for
complex systems.
PRINCIPLE OF POPULATION
This Principle of
Population was based on the idea that population if unchecked increases at a geometric rate (i.e. 2, 4, 8,
16, etc.) whereas the food supply grows at an arithmetic rate (i.e. 1, 2, 3,
4, etc.).
Only natural
causes (eg. accidents and old age), misery (war, pestilence, and above all famine), moral restraint
and vice (which for Malthus included infanticide, murder, contraception and homosexuality)could check
excessive population growth.
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