Hume's contributions to Industrial Revolution:
(1)He points out the harm of mercantilism, which has a poor understanding of price system. What matters is the stuff that people produce and consume.
(2)He points out the advantages of trade.
Adam Smith (1723-1790)
He is not an anarchist because he advocates for a good government which can play a role in the market but doesn't control or regulate most economic affairs.
Roles of government:
(1)Provide police courts (protection and supervision)
(2)National defense
(3)Public infrastructures
What ensures that we won't face anarchy and chaos in the laissez-faire market.
(1)Rights to private property and pursue self-interest.
(2)Division of labor exists.
(3)Exchanges are peaceful and mutual, not by coercion.
(4)There is no social privilege.
Adam Smith thinks that the source of wealth is Production and Exchange
He argues that people still have moral obligation to produce more than to satisfy his own need.Even for people who rely on charity, the system works,too.
The essence of trade:Give me that which I want and you shall have this what you want.
Spontaneous order: It's not designed by anybody.
Ferguson (1767) Hayek :Man stumbled upon institutions that are indeed good is the result of our action but not of human design.
Competition works better than any other alternative system because it makes people adjust their own activities to the sort of changes in the society based on self-interest without somebody telling them what to do.
Elements for entering economic life: People are free to choose what, where, when and with whom they wanna trade.
Adam Smith's worry
(1)Public prejudice (Biases)
(2)Power of interest.(Conspiracy and favored groups)
Capitalism is not just the accumulation of capital, it also includes medical treatment, insurance ,technology,which increase people's living standard.
The capitalistic a country is, the smaller the fraction of income comes from capital, the more actually comes from tertiary industry.
Materialism isn't a necessary cost in human progress because capitalism leaves the less inequality than other alternative systems.
No comments:
Post a Comment