Classical Economists :: essays research papers

As a coherent economic theory, classical economics start with Smith, continues with the BritishEconomists doubting Thomas Robert Malthus and David Ricardo. Although differences of opinion were numerous among the classical economists in the time span between Smiths riches of Nations (1776) and Ricardos Principles of Political Economy and Taxation (1817), they only mainly agreed on major principles. All believed in private property, free markets, and, in Smiths words, The individual pursuit of private urinate to increase the public good. They shared Smiths strong suspicion of government and his enthusiastic confidence in the power of self-interest represented by his famous invisible hand, which reconciled public benefit with personal quest of private gain. From Ricardo, classicists derived the notion of diminishing returns, which held that as more labor and capital were utilise to land yields after a certain and not very advanced stage in the progress of agriculture steadily dimi nished. The central thesis of The Wealth of Nations is that capital is outdo employed for the production and distribution of wealth under conditions of governmental noninterference, or laissez-faire, and free trade. In Smiths view, the production and qualify of goods can be stimulated, and a consequent rise in the general standard of living attained, only through the efficient operations of private industrial and commercial entrepreneurs acting with a minimum of regulation and control by the governments. To explain this concept of government maintaining laissez-faire attitude toward the commercial endeavors, Smith entitle the principle of the invisible hand Every individual in pursuing his or her own good is led, as if by an invisible hand, to achieve the best good for all. Therefore any interference with free competition by government is almost certain to be injurious.Although this view has undergone considerable modification by economists in the light of historical developments since Smiths time, many sections of The Wealth of Nations notably those relating to the sources of income and the nature of capital, have continued to form the basis of theoretical guide of the field of political economy. The Wealth of Nations has also served as a guide to the formulation of governmental economic policies.Malthus, on the other hand, in his book An evidence on the Principle of Population (1798) imparted a tone of dreariness. Malthuss main contribution to economics was his theory that a population tends to increase faster than the picture of food available for its needs.