Thursday, 2 December 2010

Lecture 6 - Raw Notes

Adam Smith

Subject of economics, about rationing scarce resources, empiricist activity

An objective way of measuring human behaviour e.g. money is a clear, objective measure of people. Adam Smith - often said to be the founder of economics

Smith knew Hume, published Hume's book after he died.

James Watt - Inventor of the steam engine, without it no urbanisation. Smith was Scottish. Prior to Adam Smith, dominant economic theory was mercantilism. - Medieval thinkers, state control of the economy, they would says it's Gods will to make some countries rather than others.

Smith was a liberal - Thinks the point of economic activity is to enrich yourself, to further your own wealth.

British Isles was economically undeveloped until trading took full effect. English Civil War - 1641 to 1651

Before the war, every merchant had to pay a 'ship tax'. Furthermore, every merchant involved in the slave trade had to use the King's ships. State manufactured ships - Merchants hated this! Preferred Dutch ships. The war was fought from free trade.

Free trade - Each person set free to enrich themselves as best they could.

1651 - The Navigation Acts (war with the Dutch merchants) lasts almost 100 years. Locke - Life, liberty, property. Liberty also relates to religious freedom.

Battle of the Boyne - Last Catholic uprising on British soil. 1698 - Royal Africa Company chartered (Slave/penal labour trade "privatised")

The theme of economy can be related to the Royal Exchange.

Darien Scheme (Mercantile Scottish colony - bankruptcy)

1729 - Irish famine - Swift, a Modest Proposal
1745 - Battle of Culloden (failed Jacobite revolt - end of tribal society in Great Britain)

'The Wealth of Nations'

'The Zong Case' - 1783 - English law holds that slaves are not people, but livestock. Judge ruled it wasn't murder after slaves were thrown overboard.

1815 - Waterloo - Defeat of Napoleon. After this, England becomes a dominant world power.

Parliamentary Reform Bill - Political power shifts to the manufacturing towns, the North. Votes given to the middle class. Vote is also extended to merchants as well as landlords.

1846 - The end of the mercantile system. Repeal of the corn laws. Cheap bread, complete ruin of British agriculture

Smith's 1st book was on morality - He's a pure empiricist - There's no good, no evil, only desire.

Nations are wealthy when government doesn't prevent people selling to one another. Smith thinks that if people are left to trade, the hidden hand of the market will force them to sell what they specialise in. Everybody left to their own devices will do something to fend for themselves

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