The role of Adam Smith in the History of Economic Thought.

     Adam Smith (1723-1790) is the central figure of the classical school. He was born in Scotland in the family customs official and was encyclopedic educated man. Smith at 14 years he studied at the University of Glasgow, and then for six years - at Oxford University. Subsequently, he became a professor of philosophy, taught rhetoric and literature, logic, moral philosophy. Last fourteen years, Smith worked for a customs official.

     The role of Smith in the history of economic thought in the fact that he has compiled, streamlined the economic views of his predecessors and developed them. As a result of political economy has become a science, has become a system of economic knowledge. Its fundamental theoretical and methodological developments allowed to justify economic policies of many countries and to identify areas of scientific research for several generations of economists.

     Philosophical basis of Smith's philosophy is materialism, which in theory allowed him to compile the actual practice of commodity production and move from the problems of free small business, equivalent to the creation, distribution and appropriation of surplus value, to consider equity as a system.

       Smith expressed the idea of objective economic laws, but also introduced his concept in the form of "invisible hand" that directs people to the best results, benefits.

     Central to the methodology of Smith takes the concept of economic liberalism, which is based on the ideas of "natural order" and "economic man".

The Living Wage

In Fall 2006 a small group of students at St Mary’s College of Maryland where Author teaches took over the office of the college’s president and refused to leave until the college’s administration agreed to consider giving its lowest paid workers a living wage.
This book consists of five chapters. According to me the most interesting chapters are:

Chapter 2. Sustainability: subsistence, necessities and unions;

Chapter 3. Capability: work and wages, virtue and skill;

Chapter 4. Externality, community and wages;

"Sustainability: subsistence, necessities and unions"

This is such a basic concept, that a person must work in order to survive, that one must wonder why it has not been a burning question for every person who ever wrote a book on economics. From the beginning of their existence humans have had to work to survive. What is more recent is the mediation of wages into the work/survival equation. We now take that mediation for granted but it was not always so. Consequently we will start our investigation of sustainability with philosophers in ancient Greece, where wages were not at all common.

One of the wold economics like Robert Malthus and his thoughts about "THE USES OF HIGH WAGES" Malthus agreed that economic growth could increase wages, but identified several countering affects. First, the additional money earned by businessmen through economic growth might not be used to hire workers, being spent instead on other things such as luxuries. Second, if the additional funds were spent on hiring workers, nominal wages would increase but unless those workers produced additional items of subsistence, the price of necessities – especially food – would rise and the real wage of workers might not increase. Third, if real wages did rise workers would have larger families and the population growth that followed would erode those increased wages (Malthus, 1959: 3–5). Population growth would threaten the sustainability of the workforce.

"Capability: work and wages, virtue and skill"

The capability approach takes seriously the idea that society should set a number of objectives for its members. It wants them to be effective producers and effective citizens. In the language of modern economics, this requires that workers develop their human capital and their social capital if they are to participate in life in a meaningful way. In using these terms, however, modern economists are dressing up old concepts – virtue and skill – in their particular jargon. The early economists, while their jargon was not so specific, were also concerned with capability.

John Stuart Mill added the potential for a broader social interest to the standard of behaviour for Utilitarianism, writing: That standard is not the agent’s own greatest happiness, but the greatest amount of happiness altogether; and if it may possibly be doubted whether a noble character is always the happier for its nobleness, there can be no doubt that it makes other people happier, and that the world in general is immensely a gainer by it. Utilitarianism, therefore, could only attain its end by the general cultivation of nobleness of character, even if each individual were only benefited by the nobleness of others.

"Externality, community and wages"

An externality exists when a person or a business takes an action that harms or helps another person or the community at large without the payment of any compensation. We will see in this chapter, however, that economic thinkers argued that low wages and poor working conditions did spill over and affect not only the workers involved but the community as well. Those cases usually involved consideration of how reduced levels of labour force sustainability or capability due to low wages imposed a cost on society.

In this chapter also I can give idea of John Stuart Mill about "Externality, community and wages" He did not want government intervention to remedy the negative affects of low wages but preferred that the government take steps to legalize the formation of unions. Consequently, we might categorize him as seeing unions as a way for private activities to take care of a negative externality from low wages. To him, unions were communities of self-interested individuals who could gain the moral character to recognize the community interest. Mill saw unions as another way to develop a voluntary approach for resolving the externality problem of low wage.

Joseph A.Schumpeter, Historian of Eeconomics

hi, Dears

On Monday I'm going to present for you "JOSEPH A.SCHUMPETER, HISTORIAN OF ECONOMICS".

A little about book....

Joseph A.Schumpeter was one of the greatest economists of the twentieth century. His History of Economic Analysis is perhaps the greatest contribution to the history of economics, providing a magisterial account of the development of the subject from Ancient Greece to the mid-twentieth century.

Schumpeter’s views on his predecessors have proved to be a constant source of controversy. Here individual chapters examine such disparate questions as Schumpeter’s apparent disregard for the American Institutionalises, his grudging respect for Adam Smith, the perspicacity of his views on Quesnay, and his preference for Walras over Pareto. Four chapters are devoted to the early medieval schools, neglected in all of his writings. Schumpeter’s magnum opus is related to the rest of his economic output, especially his views on money and on methodology.

According to Mark Perlman “The Flaw in Schumpeter’s Vision”:

          Schumpeter rejected the paradigm of individualism utilitarianism (and personal liberty). He did not seriously consider the paradigm of uncertainty. But, in the absence of any other specification, it seems to me he was groping for some paradigm of fundamental social morality. He was easily sidetracked, and spent too much effort decrying ideology (although he never decried theology). 

The “GREAT GAP” thesis revisited 

         In his classic History of Economic Analysis (1954), Joseph A. Schumpeter proposed that economic analysis begins only with the Greeks and was not reestablished until the rise of European scholasticism in the hands of St. Thomas Aquinas (1225–74). This “Great Gap” in economic thought, then, coincides with the Islamic golden age, when various Muslim writers made substantial contributions in various fields of inquiry, including economic matters. The Schumpeterian “Great Gap” thesis has been deeply entrenched as part of the accepted tradition in economics and is reflected in almost all relevant literature in our discipline (Mirakhor; Ghazanfar.) As a result of this thesis, whose prevalence in economics literature dates long before 1954, Western historians of economic thought have ignored the contributions of medieval Islamic scholars, or at least have reduced them to footnotes (Hosseini 1995).

A Concise History of Economic Thought From Mercantilism to Monetarism

hi, Dears
Tomorrow I'm going to present for you "A Concise History of Economic Thought From Mercantilism to Monetarism". This book is written by Gianni Vaggi and Peter Groenewegen and published in 2003 & 2006.

A little about the book...

      In first part of the book you can read about - examines the process of formation of classical political economy, or the evolution of the ‘theories of surplus’. The reason for using either of these two terms will emerge from the contents of the book. As for the meaning of classical political economy itself, no further specific definition needs to be provided at this stage...
     
      The second half of this book is history of economics is called modern developments because it covers the period during which the foundations were laid for much of the contemporary mainstream theory of economics, both in its micro-, and in its macro-parts.

       And also you can get information about Milton Friedman was born in New York in 1912, in decidedly humble circumstances. He studied economics at Rutgers, Chicago and Columbia, worked in various research capacities, much of them statistically oriented (including work at the National Bureau of Economic Research) before turning to an academic career (at Chicago from 1946). He won his first academic laurels by writing on positive economics and the Marshallian demand curve (Friedman, 1953).

       In short, the outline history of economics here concluded cannot be the final word on the subject. What it has attempted is to provide a useful sketch on the development of economics from mercantilism to monetarism. Most strikingly, it has provided an overview of the variety of that development while the guides for further reading which accompany each chapter indicate the variety of interpretation to which this epilogue draws attention.

Russian Economic Thoughts

Hi my dear Friends. Now I have started to write my blog about book of Russian Economic Thought which was written by B. Barnet.

This book for me is very interesting and you can easily get information about Russian Economic Thought. First of all I want to start my blog with word one of the most famous writer of World Literature Alexander Pushkin wrote that it is respect for the past distinguishes civilization from barbarism.

Around about the same writing and B. Barnett at the beginning of his book, which is an attempt to "resurrect some thoughts and experience of the Russian economists XIX-XX centuries, has long been forgotten. ... It helps primarily to the fact that the institute and do more prevalent in the West, interest in the history of Russian economic ideas ... to recreate a sense of the context in which they appeared "...

History of Economic Thoughts

The History of Economic Thought deals with changed thinkers and theories in the topic that became political economy and economics from the ancient world to the current day. It encompasses many disparate schools of economic thought. Greek writers such as the philosopher Aristotle examined ideas about the "art" of wealth acquisition and questioned whether property is best left in private or public hands. In medieval times, scholars such as Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price.