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History of Economics
The Mercantilists
* 16th – 17th century in Europe.
* Jean Baptiste Colbert and Sir Thomas Mun

1. It is necessary to have a surplus on the balance of trade to increase the country’s wealth. This surplus would bring more gold and silver into the country. 2. To achieve this, exports should be encouraged in any way possible, e.g. subsidies. 3. Goods should be exported at their ‘highest value added’ level through manufacturing of raw materials. The Physiocrats

* 18th century – French writers
* Francois Quesnay and Jacques Turgot

1. No state intervention except to uphold the natural law and to protect private property. This is known as laissez-faire. 2. Agriculture is the source of all wealth, whereas manufacturing only changes the nature of wealth while trade only changes its ownership. 3. They advocated free international trade.

The Classical Economists
* 18th - 19th centuary
* First real economists

1. LAISSEZ –FAIRE: The government should intervene in an economy only to raise funds to maintain the legal system, to defend the country and to provide public works, i.e. to build up the infrastructure of the country. 2. THE WAGE FUND THEORY: This stated there was a fixed fund out of which wages can be paid. The wage from this fund would give people a subsistence level of income. If wages increased above this level, the population would rise and bring the average income per person back down to its original real level. The net result of this would be an increase in the cost of production. 3. THE LABOUR THEORY OF VALUE: The value of a product is equal to the value of the labour involved in its production. ADAM SMITH

* Nationality: Scottish
* Dates:1723-1790
* Publications: An inquiry into the nature and Causes of the wealth of nations. Main Ideas:
* The invisible hand of free enterprise.
* Laissez –Faire
* Labour theory of values
* The canons of taxation
* The division of labour
* Distinguished between value in use and value in exchange * Distinguished between productive and non-productive labour

* Nationality: English
* Dates: 1766-1834
* Publications: Essay on the Principal of population as it affects the future improvement of society Main Ideas:
* The paradox of thrift
* The wages fund theory
* Positive checks: increase death rate
* Preventative checks: lower birth rate
* Needed for checks on the growth of the population

* Nationality: French
* Dates: 1767- 1832
* Publications: Treatise on political Economy
Main Ideas:
* Say’s Law
* Recognition of enterprise as a separate factor of production

* Nationality: English
* Dates: 1772 - 1823
* Publications: The principal of political economy and taxation Main Ideas:
* Wages fund theory
* Concept of economic rent
* The labour theory of value was only a partial explanation of value * Advocated free international trade
* Law of comparative advantage
* Nationality: English
* Dates: 1806 - 1873
* Publications: Principles of political economy with some of their applications to social philosophy Main Ideas:
* Economic rent
* Wages fund theory
* Predicted multinational companies
* Certain services to be classified as productive
* Advocated the establishment of trade unions to represent labour * The production of wealth was determined by the laws of nature and technology while the distribution of wealth was controlled by man * Advocated government intervention to improve the welfare of society * Both supply and demand were equally important in assessing the value of a product

Marxian Economics
* Nationality: German
* Dates: 1818 - 1883
* Publications: The Communist Manifesto and Das Kapital
Main Ideas:
* Forecast the...
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