There are many talented economist of the classical school. For example, Adam Smith, Thomas Malthus, David Ricardo, Jeremy Bentham, and John Mill also the outstanding member of classical school. Adam Smith’s book is the important thing for us to discuss, there is ‘The Theory of Moral Sentiments’ and ‘Wealth of Nations’. Thomas Malthus also one of the founder of classical school, Population growth and market gluts is the important work of him. David Ricardo’s work “Principle of Political Economy and Taxation’ also one of the achievement of sector economy. Next, Jeremy Bentham and John Mill have done some significant contribution for economic sector. In addition, we will compare and contrast the thought of the classical school economist and consider their contributions to contemporary economics thinking.
Adam Smith, one of the founder and extraordinary member of the classical school. He is the one who contributed greatly to the economic sector. His doctrines deeply influenced later economics. The most important assets that he left it for us is the two book he wrote, namely, ‘ The Theory of Moral Sentiments’ and ‘ An inquiry into the Nature and Causes of the Wealth of Nations’. The book ‘The Theory of Moral Sentiments’ is a book as ethics, when this book is published, Smith is renowned academia, another book is for the economic book, it appeared astonish the world. Inside the book ‘The Theory of Moral Sentiments’ open with a chapter titled “Of Sympathy’. Smith use the word Sympathy to explain justice, mercy, self-denial, such as the root cause of moral character, and description of the nature of moral judgments and say that the basis of human society must maintaining the harmonious development and human behavior should follow the general code of ethics. Sorrow and gladness in others arouse similar emotions in ourselves. If we can let ourselves placed in other people position, our imaginations can evoke sympathy for a situation of which the other person is unaware. We must stand on another person’s to understand the situation and awareness their difficulties. This is what Smith say about sympathy. This book is influence deeply to the Western-world, and also played a important role in promoting human well-being of the larger social purposes. The main concept that Smith tried to tell us is when we are in the pursuit of material interests, we must constraint by moral gratitude, we not to hurt other person, but we need to help them. That is how our society can developed harmony.
The next book he wrote ‘An Inquiry into the Nature and Causes of the Wealth of Nations’. Smith is abandoned many of the misconceptions of the past, he critics the mercantilist school. He say that the division of labor can increase the productivity. There is the three reason that Smith said the division of labor can increase the quantity of output produced. First, each worker will become skillful and experienced when they are doing a same work repeatedly. Second, each worker in charge in one work can save the time and be concentrate in the work. Third, machinery can be invented to increase productivity when tasks already simplified and made routine through the division of labor. Furthermore, wealth of nations also say about a chaos free market actually is a self-adjustment merchanism. For example, an orange market is face the problem of supply shortage, than the price of orange will increase, when the price is increase. This will cause more people to grown more orange and supply it for gain profit from the market. In this case, when supply is increase, price of orange will decrease and go back to the normal price. This also as an ‘invisible hand’, this will help our market to achieve the objective that we don’t expect. Smith also pointed out about the harmony of interests and limited government. According to Smith, intervene of governments are wasteful, inefficient, grantors, and corrupt of monopoly privileges to the detriment of the society as a...
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