“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
Adam Smith begins his analysis of the market society with a look at the division of labor. He elaborates on the idea that the division of labor is essential for the growth of a civilization. Smith explains how for example, the production of pins can be done more efficiently with the breaking down and deconstruction of
Adam Smith was a philosopher whose political philosophies was based off of economics. He believed to some extent that there should be a redistribution of wealth, but at the same time there should be a limit to government interference in economy. He wanted the state to end politics that favor industry over agriculture or vice versa, and that business should be left to the business people. He also believed that the government cannot make people virtuous with laws, and that the state should not promote religion or
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 Karl Marx’s Capital he analyses the intricacies of capitalism and its effects on the social relations between people and products. Marx’s chapters “Commodity of Fetishism” and “Working Days” in particular parse through and deconstruct the complex model of a commodity and its crucial role in capitalism. In order to do this, Marx introduces the notion of a use-value as the base foundation of a commodity. Marx then further relates this idea to exchange-value of a commodity. The exchange-value is incredibly important, as it is the driving force behind capitalism. In the first chapter Marx examines how commodities, once in the marketplace seemingly adopt innate value wherein the consumer does not equate the objects value with the human labour expended, but rather that the item
Gaynor Ellis, Elisabeth, and Anthony Esler. ""New Economic Thinking"" World History: The Modern Era. Prentice Hall. 186. Print.
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
Mercantile capitalism and mercantilist thought started off in the early times, specifically the 16th century to the 18th century. Trade was very much known among countries. As the years progressed, merchants, financiers, public administrators and the kings wanted to unify the country and end the opposition of nobles and landlords. To make sure the state’s power was effective internally, the security and stronghold of the Church and feudal aristocracy was implemented. As a result, the monarch seized the lands owned by the Church and tried to integrate feudal aristocracy into the system and at the same time provided the Church with economic opportunities within the world of trade. As time passed, the new mercantile system allied itself with the
The pivotal second chapter of Adam Smith's Wealth of Nations, "Of the Principle which gives occasion to the Division of Labour," opens with the oft-cited claim that the foundation of modern political economy is the human "propensity to truck, barter, and exchange one thing for another."1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith's understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities. Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy designed to come to terms with the emergence of a novel object of investigation: economic production and exchange as a distinct, separate, independent sphere of human action. Moreover, it is this domain, the source of wealth, which had become the main organizational principle of modern societies, displacing the once-ascendant positions of theology, morality, and political philosophy.
This video can also be used to teach and distinguish among Marx's notions of use-value and exchange-value, as well as his concept of surplus-value, which is the surplus or profit earned by the capitalist, above and beyond the use-value (labour power) required to produce the
Throughout time, the human knowledge of economics has evolved and expanded. The discovery of this knowledge has been expedited, in many cases, due to a handful of brilliant minds. The work that these minds have contributed has helped to progress the human race, and helped further our understanding of economics. William Petty is one of those minds. Sir William Petty was an English economist, physician, and surveyor whose resume would impress even the most qualified. Petty began his life at the bottom of the barrel and worked up to the top, even becoming a knight along the way. William Petty’s influences were rooted in the teachings of Thomas Hobbes and Francis Bacon, and his views on natural law are clearly reflected in his work. Sir William
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 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.
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.
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.