The extended economic recession we have been facing in the UK since the 2008 financial crisis, and the rising levels of unemployment here, have raised significant concern about what the government can and should be doing to help revitalize the economy. In this essay I analyse possible solutions to this from the viewpoint of two different economic philosophers, Adam Smith, based on his publication “The Wealth of Nations” and Michael Porter, based on his 1998 Harvard Business Review article “Clusters and The New Economics of Competition”.
I intend to analyse these publications and based on evidence collected, speculate as to what both these renowned economic minds would suggest as a solution to the problems caused by the economic recession, what they would think of the government’s approach so far at setting the economy back on track. I will study their works and from them I shall them come to a conclusion as to what each of these men might consider the right approach to the problems brought on by the economic recession.
A BRIEF BACKGROUND ON THE STATE OF AFFAIRS IN THE NORTH-EAST OF ENGLAND AND SCOTLAND
The current economic recession has touched the entire world and the United Kingdom is no exception. The rise in unemployment, the collapse of business, all give a very gloomy view of the economy as a whole. Governments struggle to find ways to pull their country’s economies out of the nosedive caused by the recession and kick start their economies into growth once again. In Scotland for instance, the government have intervened rather extremely with their use of “Scottish Enterprise”, a government institution which stimulates the economy by persuading foreign companies and multinational to set up new sites in Scotland and encourag...
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... east seems to be taking a more laissez faire approach by not interfering or pumping money into the region, instead attempting to cut back the deficit by reducing borrowing as well as spending while Scotland appears to be taking a more involved approach with the government, in form of the institution Scottish Enterprise, are persuading larger companies to set up new sites in Scotland, even using money in form of subsidies as incentive. From their publications, I have concluded that Adam Smith would have felt that the North East is taking the right approach to dealing with the recession and believed that in the long run, it will witness growth in its economy while Michael Porter would believe that the Scottish government have the right idea by intervening and getting international companies to settle in Scotland creating jobs and therefore, stimulating the economy.
In the article “Conditions of Trade,” Michael Baxandall explains that fifteenth-century Italian art is a “deposit” resulting from the commercial interaction between the artist and the purchaser, who he refers to as a client. These works, as such, are “fossils of economic life,” and money, and they play an important role in the history of art. In our current perception of the relationship between the artist and art, “painters paint what they think is best, and then look around for a buyer” . However in the past, especially during the Renaissance period, the customers determined the content and form of paintings, as it was them who commissioned the work before it was created. He states that the artists and clients were interconnected and a legal agreement was drawn up specifying subject matter, payment scheme and the quality and quantity of colors, which would influence the artist’s painting style. Baxandall not only looks at the explanation of the style of painting that reflects a society, but also engages in the visual skills and habits that develop out of daily life. The author examines the situations between the painter and client within the commercial, religious, perceptual, and social institutions, centrally focusing on markets, materials, visual practices, and the concept of the Renaissance period, which saw art as an institution. Baxandall notes that Renaissance paintings also relate to the clients’ motives through such ways as possession, self-commemoration, civic consciousness, and self-advertisement. The author considers works of a wide variety of artistic painters, for instance, Filippo Lippi, Fra Angelico, Stefano di Giovanni, Sandro Botticelli, Luca Signorelli, and numerous others. He defines and exemplifies fiftee...
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,
The purpose of this investigation is to analyze to what extent did Margret Thatcher, the prime minister of the United Kingdom, impact Britain's economy from 1997-1990. This analysis will look at themes revolving around her impact on the trade unions, tax rates, her impact on unemployment in the UK and her role in the Lawson Boom in the 1980s. However, how other neighboring countries besides the US were affected when Margaret Thatcher came to power will not be investigated. In order to research these themes, news articles in BBC will be used to help find how Margret Thatcher changed Britain and its economy. In Addition, books such as the "No Such Thing as Society" and other online journals will be used. This investigation will include an evaluation of the origin, purpose, value and limitations of the sources used for research.
...ults of the recession. In order for this never to happen again, there is a need to learn from the mistakes in the past and to look for the warning signs. The problem is not just restricted to one country, but is a global problem and needs to be addressed as such.
In this essay I will be discussing the features of Scotland’s mixed market economy, describing four aspects of the Scottish economy; Tourism, unemployment, growth and the NHS.
...rall due to the level of consensus there is relatively little difference between the way the economy has panned out between the conservatives period in charge end the dominance that the Labour party currently are enjoying. On the whole the economy has become relatively depoliticised since the Thatcher years as politicians have less control over this increasingly globalised and privatised aspect of the agenda. Now with Brown’s decision to give the Bank of England the power to set the level of interest rates the economy has become less prone to state intervention then ever especially with a clear end to the grip that Trade Unions once had over the Labour party. Overall state intervention over this period has decreased and barring a crisis it is likely that this will remain the case unless the Liberal Democrats manage to gain power, even through a coalition government.
Giudice, R, Kuenzel, R & Springbett, T 2012, “UK economy: The crisis in perspective.” Abingdon; Routledge.
Smith's Influential work, The Wealth of Nations, was written based on the help with the country’s economy who bases it off his book. Smith’s book was mainly written on how inefficient mercantilism was...
The United Kingdom of Great Britain and Northern Ireland, commonly referred to as the United Kingdom, or “UK” for short, is a country located in Western Europe. It rests between the North Atlantic Ocean and the North Sea and is a medium sized country, ranked 80th in the world based on its size of 243,610 km2 (CIA 1). It has a temperate climate, with rugged hills and low mountains. The Fens is the lowest point in the UK at four meters below sea level (CIA 4). In contrast, the highest point is in Ben Nevis, at 1,364 meters above sea level (CIA 9). In the east and south-east, the land is made up of mostly plains. Only about a quarter of the land in the UK is suitable for growing crops, but there are many natural resources in the region. Some of these resources include coal, petroleum, gold, and more (CIA 12). The diverse resources in the United Kingdom help to keep its’ economy stable.
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
My research of Classical Economics and Keynesian Economics has given me the opportunity to form an opinion on this greatly debated topic in economics. After researching this topic in great lengths, I have determined the Keynesian Economics far exceeds greatness for America compared to that of Classical Economics. I will begin my paper by first addressing my understanding of both economic theories, I will then compare and contrast both theories, and end my paper with my opinions on why I believe Keynesian Economics is what is best for America.
The core of Adam Smith Free Trade International Trade Theory is all parties involved in trade have received trade benefits in the free trade transactions. Adam Smith thinks different countries produce the same product with different costs; the country should produce the definite low cost products instead of absolute high products. The products can be exchanged with other countries, so that the two countries will increase labor productivity and decrease the costs. Obviously, labor and capital can be properly distributed and utilized. Citizens could enjoy the variety goods and services at the lower costs, but the exchange needs international market free trade. Since Adam Smith Free Trade International Trade Theory was published, it as the core
Before understanding which philosopher had the greatest impact on today’s economy system in the United State, people should know what type of system the U.S has. As of today, the U.S is basically a mixed economy. Many people considered the U.S a capitalist economy, but there is a lot of requirements that the U.S does not fulfill. One of the people who contributed to the economy system we have today in the U.S is Adam Smith. There is other philosophers who had a different ideology; however, it was not a strong effect. Adam Smith was an influential person which argued economics functioned best when it was not controlled by the government. He was not selfish, he was a person who shared his. The U.S economy would had been different if Adam Smith would had never presented his ideas to the people.
The economy tend to move from boom to recession, it is difficult for government to maintain and achieve macroeconomics objectives. At this time, there are “conflicts between government macroeconomic objectives”, which is this extended essay main theme. This essay will look at the government macroeconomic objectives, the conflicts between macroeconomics objectives, the best policy or mixture of policies to minimize the conflicts between macroeconomics objectives and recommendations, which are classified as main objectives and additional objectives.
United Kingdom of Great Britain and Northern Ireland (London: 2005). pp. 51, 71-72. Accessed May 3, 2014. http://www.jhud.co.uk/huddleston/uk2005_tcm77-248610.pdf.