“Political Economy” or “economics” is a term that carries with it different meanings and assumptions depending on the historical, contextual, and ideological lens through which it is being considered. The following inquiry will attempt to consider and interpret the works of the pre-Adamite’s -- those who came before Adam Smith - the classical thinkers - Smith, Ricardo and Marx –, and the neoclassicals, who were a group of thinkers who thought to refine Smith’s thinking based on challenges unique to their own era. Much of the work of all these admirable thinkers concerns a notion first put forth by Aristotle (Heilbroner, 1996, 9), as outlined in Robert Heilbroner’s seminal synthesis of economic thought Teachings from the Worldly Philosophy …show more content…
Robert Heilbroner (1996, 11-13), in Teachings, drew upon the insights of Thomas Aquinas who had attempted to provide room for capital accumulation and economic activity beyond the “stringent” moral requirements of Aristotle. In what was known as “the commercial revolution,” an economic ideology known as “mercantilism” dominated the minds of the foremost economic thinkers. According to Heilbroner (1996, 17-18) the system of serfdom and feudalism had eroded behooving society to come up with a new way to structure its economic activity around a labor force that now had more opportunity than in the past. This new market, and with it a newly kindled desire for accumulation, ran in opposition to the Christian values of the time, something that Aquinas (Heilbroner, 1996, 12-13) attempted to address in the Summa Theoligica [1485]. This began a long and rich tradition of economic thinkers attempting to “make peace” with the seemingly amoral activities of an emerging merchant class and the inequities that occur as a result of an evolving market based system; furthermore, this debate continues into the 21st century, and could be seen as the most integral question that faces …show more content…
use-value. For Ricardo (1953, 11-13) scarcity of a commodity can, in the case of something rare such as gold, elevate it above the labor needed to acquire it, but most commodities value is determined by the toil and trouble needed to get them. Ricardo (1953, 15-16) seems to uniformly reject the Aristotelian notion of labor having constant worth, allowing for the exchange of a set amount of goods for another as in the example of houses and shoes present in Nichomachean Ethics [350 B.C.]. Ricardo leaves room for the value of labor to fluctuate on the basis of the scarcity of the commodity, but, and this appears important, he allows for labor to dilute its own value via the use of the productive machinery necessitated in the division of labor introduced by Smith. This insight leaves room for labor to be exploited and immense profit to be made and will lead to the works of Karl Marx and his revolutionary critique of capitalism Capital: A Critique of Political Economy
In the essay “Judaism and Economic Reform”, Norman Solomon, a Jewish-American journalist, presents a compelling argument on the basis of the need for economic reform while providing simple religious base solutions. While discussing two major economic problems that plague the world’s current economy, Solomon introduces the Jewish view of the global economy and their general view on economics as a whole. With this introduction to the Jewish worldview of economics we as readers are able to transition into understanding Solomon’s solutions of education & using Jewish law to improve the current state of the global economy. Although Solomon’s ideas of education and relying on Jewish law to improve the global economy seem logical, Sallie McFague, a Christian theologian, provides a different yet similar viewpoint of improving the global economy in her essay “New House Rules: Christianity, Economics, and Planetary Living”. Her discussion of ecological and neo-classical economics forces the reader to revert back to Solomon’s essay to analyze his methods of fixing the current global economy.
In the Humanistic Tradition the author, Gloria Fiero introduces Adam smith as a Scottish moral philosopher, pioneer of political economy, and a key figure in the Scottish Enlightenment. Smith also known as the Father of Political economy, is best known for one of his two classic works An Inquiry into the nature and causes of the Wealth of Nations. Fiero looks at Smith’s work because the division of labor is important. One thing Smith thinks is even more important for creating a wealthy nation, is to interact and have open trade with different countries. Fiero states,“It is necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter,
In The Great Transformation Karl Polanyi analyzes the conditions under the historical and revolutionizing period in time in which market societies suddenly developed. The process of change is seen as a combination of certain gains and losses to the evolution of a civilization. Both Adam Smith and Karl Marx can be said to have had the world’s interest at heart when it comes to the prosperity and progression of the human race.
A perfect economic system has not existed since sin entered into this world, because of sin no economic system will ever be completely without imperfections or injustices. This begs the question, which economic system will bring humanity closest to a utopian state. The book The Virtues of Capitalism written by Scott Rae and Austin Hill examines multiple economic systems, but argues that capitalism is the most virtuous and biblically suitable economic system known to man. Most importantly, the authors explain why it is important to consult the bible when choosing the best economic system. After the authors explain the biblical economic standards, they begin to make the case that capitalism is the most biblically based economic system. The authors then analyze the virtues of capitalism, and how they align with the bibles economic standards. This essay will identify and analyze the author’s case for a biblical approach to economics, opposition of anti-free market systems, and capitalisms superiority as an economic platform.
Although, it is now known that capitalists don’t make profits by exploitation, but rather from taking risks and organizing consumption. He says that it is not unfair but that this exploitation is why there is a class struggle, and an economic crisis. Developing the labor theory of value even further, Karl Marx says that workers have no other choice but to be exploited, because they have no other means of production. The labor theory of value, further explained by Karl Marx’s viewpoint, says that the laboring of the proletariat, working class, is what creates new value which then translates into profit. Due to the fact that capitalists do not make profits by exploitation, the labor theory had some problems. These problems were fixed by the subjective value theory. This theory said that exchange value is not absolute and is based on individual evaluations. The subjective value theory also says that value comes from a human perception of what he views as useful. The discovery of this theory changed the relationship between input costs and market
Smith's formulation transcends a purely descriptive account of the transformations that shook eighteenth-century Europe. A powerful normative theory about the emancipatory character of market systems lies at the heart of Wealth of Nations. These markets constitute "the system of natural liberty" because they shatter traditional hierarchies, exclusions, and privileges.2 Unlike mercantilism and other alternative mechanisms of economic coordination, markets are based on the spontaneous and free expression of individual preferences. Rather than change, even repress, human nature to accord with an abstract bundle of values, market economies accept the propensities of humankind and are attentive to their character. They recognize and value its inclinations; not only human reason but the full panoply of individual aspirations and needs.3 Thus, for Smith, markets give full expression to individual, economic liberty.
Aristotle is widely regarded as the father of practical economic philosophy. His views on moral economic behavior, the economics of the house, the economics of trade, and his thoughts on markets can been read in Economics, Politics and The Politics and Economics of Aristotle. Within these readings we uncover Aristotle’s philosophic thoughts surrounding money. We learn that he considers money to be both dangerous and necessary in ancient Greece. But why is that? An answer will require looking at Aristotle’s writings and philosophy. Specifically we will look at money, or currency in ancient Greece, trade with retailers and between households, and what sort of exchanges Aristotle considers to be natural versus unnatural.
In his work, Marx presents the amount of power exchange-values impose upon the economy, as he states “As use-values, commodities are, above all, of different qualities, but as exchange-values they are merely different quantities, and consequently do not contain an atom of use-values” (Marx 54). It is with this analysis that Marx is able to present the link between labor and the productions that result from a worker 's dedication. As a result, it becomes evident that exchange-values possess an extraordinary amount of influence with regards to the worth of an object and a worker’s salary. However, this worth changes with time and depends on the usefulness of the product. This is especially made evident when analyzing the twenty-first century business world. In 2015 a report by Sorensen was published, discussing the role of exchange-values in the American economic-system. Thus, demonstrating the neglect of use-values, while highlighting the power of exchange-value as Sorensen writes, “Most
Adam Smith is widely regarded as the father of modern economics and one of the greatest economists throughout the course of history. He is mainly famous for a two books that he wrote, these two books are considered thee base and infrastructure of the world of economics. The two books he wrote were, “The Theory of Moral Sentimental” and “The Wealth of Nations”. But although Adam Smith was such a great economic philosopher, he wasn’t a very good foreteller or future predictor. The economic scenario now is very different from the economic landscape of the 1700’s. Giant super-corporations can now govern the flow of the market, unlike Smith’s time’s. Even though elements of Smith’s ideas have changed over time, some of his beliefs remain important factors in economics to this day. One of those truly unique philosophies is the “Invisible Hand”.
Adam Smith’s The Wealth of Nations argues for a system of political economy that separates economy – the creation and distribution of wealth – from governmental interference. In Smith’s view, the economy of a nation grows as a direct consequence of private business ventures in the interest of each individual owner. Regulation by the government hurts the economy, and the progress of society is derived from the flow of the market. Things should be left in their natural states, thus maintaining a “natural order” of society. The basis of Smith’s thesis is that this natural order is driven by Man’s self-interest.
The division of labour described by Adam Smith in The Wealth of Nations is a product of individual self-interest. This is representative of Smith’s methodological individualist interpretations of human nature. Adam Smith deduces that the division of labour is beneficial to the individual, as it is in one’s own interest to work less whilst still engaging in tasks that are to their own specialities. Highly specialized work is beneficial for nations to grow economically whilst allowing individuals to further pursue their own rational self-interest. To further explain the concepts that Smith proposes I will first explain what rational self-interest in regards to human nature and how the division of labour emerges from self-interest. Secondly, I
Adam Smith is considered as one of the most influential economists in the 18th century. Although his theories have been criticized by several socialist economists, however, his idea of capitalism still has great impact to the rest of the economists during classical, neo classical periods and the structure of today’s economy. Even the former Prime Minister of Britain, Margaret Thatcher had praised on Smith’s contribution on today’s capitalism market. She commented “Adam Smith, in fact, heralded the end of the strait-jacket of feudalism and released all the innate energy of private initiative and enterprise which enable wealth to be created on a scale never before contemplated” (Copley and Sutherland 1995, 2). Smith is also being recognized as the father of classical political economy and he has two famous published works that laid out the reasons to support his ultimate idea of capitalism.
Although this view has undergone considerable modification by economists in the light of historical developments since Smith’s time, many sections of The Wealth of Nations notably those relating to the sources of income and the nature of capital, have continued to form the basis of theoretical study of the field of political economy. The Wealth of Nations has also served as a guide to the formulation of governmental economic policies.
Imagine watching and reading the news about politics and economics, and we wondered how they are related to each other. First of all, economics is about money, income, and wealth, whereas politics is about government and voting. The book, Capital of the 21st Century, written by Thomas Piketty, can describe the relationship between politics and economics and demonstrate the theories and methods of political economy. Merely, the relationship between economics and politics has become the impact in society, due to the economy’s performance, which is politically a domain. If economics is not political, there is no bias nor prejudice on how the economy’s performance is improved.
This paper discusses Adam Smith's and David Ricardo's view on the labor theory of value. It includes a discussion of the validity of the arguments they present in relation to social and Economic contexts. To the pursuance of this objective, the paper has explored five published articles available both in the internet and as hand copies.