Economics - HCJ Lecture Three

Adam Smith - The wealth of nature - relating to why one country is wealthier than the other.
Unwealthy countries have free individuals and trades.
In the 18th - 19th century, China became a third world country. Adam Smith believed that this happened due to government intervention. Like Newton, Smith believed in moral philosophy, in his book Smith spoke of how people are all about the number one, people who give to charity are ultimately doing it for self satisfaction purposes. Rich people who give to charity, get so much self satisfaction it outweighs the amount of money that they are loosing. This idea is similar to that of Hume, who also believed that people want to maximise pleasure and get less pain. Trying to live off others does one no good. Making others happy ends up causing pain.
The law of unattended consequence - trying to help people but then you end up damaging them in the process. An example of this is taking away benefits so people HAVE to go out and do something, e.g. get a job.

David Ricardo was the opposite of Smith who believed that value comes from trade. This idea is much more metaphysical. He thinks that there is a spirit value in things e.g. coal has no value but when humans apply concious effort to it, it then gets value. This also relates to the labour theory. This theory describes the way the more labour that is put in to something, the more value something has at the end of it.

Thomas Malfus (1820) is related to the Victorian era where basically everyone was grumpy. Malfus believed that humans will always starve to death and they will always eat everything. He thinks that to be man is to constantly be on the brink of extinction. Ultimately, the ways of thinking I have just described can portray his moody and very much 'i hate life and everyone' tendencies. Malfus thought that by being married and not having sex will stop people from dying. In the 19th Century, we almost bread to extinction. The moderns would laugh at Malfus and his ideas, however some have said that Malfus is back 'in fashion' due to climate change and malnutrition. In general the price of expensive and decent food is so high that malnutrition is quite common in many third world countries.

Karl Marx thought that economic analysis is useful. Yet also politics are questionable. Labour is the onlu source of value, thought Marx. Because of profit and capitalism, people who grow the food won't be able to buy it in the end, which ends up as a large fatal flaw in the system.