The Contribution to Economics of Each of the Following: • Adam Smith • Thomas Malthus • David Ricardo • Karl Marx • Alfred Marshall • John Maynard Keynes • Milton Friedman
Write an essay describing the contribution to economics of each of the following:
• Adam Smith
• Thomas Malthus
• David Ricardo
• Karl Marx
• Alfred Marshall
• John Maynard Keynes
• Milton Friedman
“Many Economists have tried to establish why the economy performs as it does and want to have a basis for predicting how the economy will perform when circumstances change”. (Nagel, S pg 1 1999) Economists are just people after all, who have lived through different times and experiences in their lives, thus leading to different values and views. George Bernard Shaw once said that “If all economists were laid end to end they would not reach a conclusion”,(cited in Mankin, Taylor 2006) In this essay we will look at what contributions each of the above economists have made, keeping in mind the era in which they lived .
Reputed to be the father of “The Classical School” of economics, the Scottish born Adam Smith (1772-1790) was a supply side economist. “He attributed economic expansion to expanding production and trade with expanding demand as a by-product and consequence”(Jacobs, J 1985 p12) He promoted the invisible hand of free enterprise, which showed that individuals in pursuing their own selfish interest could benefit society. In other words, if people wish to sell, they must produce what others require at a price that they are prepared to pay. (Palmer. N, 1990). He also advocated the “Laissez-faire” approach, which means that the government should only get involved in the economy in order to raise monies for the upkeep of infrastructure, to sustain the legal system and to defend the country. In Smith’s book ‘An inquiry into the nature and causes of the wealth of nations’ which was published in 1776, he covered the previous two concepts as well as the division of labour and the function of markets. Division of labour was not a new idea but Smith believed it to be very important as a way of increasing wealth. According to Delaney, Smith established the 4
• Adam Smith
• Thomas Malthus
• David Ricardo
• Karl Marx
• Alfred Marshall
• John Maynard Keynes
• Milton Friedman
“Many Economists have tried to establish why the economy performs as it does and want to have a basis for predicting how the economy will perform when circumstances change”. (Nagel, S pg 1 1999) Economists are just people after all, who have lived through different times and experiences in their lives, thus leading to different values and views. George Bernard Shaw once said that “If all economists were laid end to end they would not reach a conclusion”,(cited in Mankin, Taylor 2006) In this essay we will look at what contributions each of the above economists have made, keeping in mind the era in which they lived .
Reputed to be the father of “The Classical School” of economics, the Scottish born Adam Smith (1772-1790) was a supply side economist. “He attributed economic expansion to expanding production and trade with expanding demand as a by-product and consequence”(Jacobs, J 1985 p12) He promoted the invisible hand of free enterprise, which showed that individuals in pursuing their own selfish interest could benefit society. In other words, if people wish to sell, they must produce what others require at a price that they are prepared to pay. (Palmer. N, 1990). He also advocated the “Laissez-faire” approach, which means that the government should only get involved in the economy in order to raise monies for the upkeep of infrastructure, to sustain the legal system and to defend the country. In Smith’s book ‘An inquiry into the nature and causes of the wealth of nations’ which was published in 1776, he covered the previous two concepts as well as the division of labour and the function of markets. Division of labour was not a new idea but Smith believed it to be very important as a way of increasing wealth. According to Delaney, Smith established the 4
References: Jacobs, Jane Principles of Economic Life Random house ny 1985 Palmer, Noel T Economics 1990 Folens Dublin Nagle, Sean Economics 2nd Edt. 1999 Colour Books ltd, Dublin 13 De Soto, Hernando The Mystery of Capital, Why Capitalism Triumps in the West and Fails Everywhere Else Black Swan 2001 O’Grady Denis (1993) Leaving Certificate Economics Dublin 24 Folens Delaney Richard (2008) Understanding Economics leaving Certificate. the Educational Company of Ireland Dublin 12 Gregory Mankin, N and Taylor, Mark P (2006) Thomson Learning-publishers http://c250.columbia.edu/c250_celebrates/remarkable_columbians/milton_friedman.html Bibliography www.investopedia.com/articles/economics/08/adam-smith-economics.asp