The economy is a mechanism that allocates scarce resources among competing uses. One of the most crucial parts of any country which can make it powerful and outstanding is economic. Economic activity is what people do to cope with scarcity. It is obvious that any of us deals with things which are related to the economy every day. From a long time ago economist try to analyse the economy of each situation, to predict the future economics and to describe the function and working parts of an economy. The three most famous economists whose theories were studied in this course were Adam Smith, David Ricardo and Robert Malthus. When we read these three economist's theories we recognize that Adam smith was optimistic while David Ricardo and Malthus were approximately pessimistic.
In 1776, new technologies were being invented and applied to the manufacture of cotton, wool, Iron, transportation and agriculture in what came to be called the "industrial revolution". Adam smith was keenly interested in these events .he wrote the treatise that founded economic science, An inquiry into the nature and causes of the Wealth of nations. Adam smith who is called the father of economy believed in capitalist's system which contains market regulat
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His treatment is more technical, setting out to solve problems of limited scope, and following a deductive method which gives his work the tone of a scientific treatise. But he failed to consider that the process of urbanization wouldreak havoc on the labor market, and his optimism about growth seemingly ignored the possibility that capitalists might disproportionately consume the benefits of expansion. At the same time, the growing demand for food and other provisions would surely raise the cost of survival. The inability of growth to substantially increase general living conditions became the primary concern of Smith's intellectual descendants. Curiously, Malthus offers no explanation as to how he determined these figures. Focusing exclusively on the birth rates of economically thriving communities, he failed to consider that part of his projected "population explosion" would come from a reduction in death rates. Because of these scientific breakthroughs the theories of Malthus have had little relevance in regards to Western society. Many underdeveloped nations, however, never adopted improved farming techniques or new methods of contraception. Smith's belief that competition, the market's invisible hand, would lead to proper pricing played a large role in his economic policy recommendations.
Robert Malthus, classical economists who followed in the footsteps of Adam Smith did not enjoy his widespread popularity. " Originally, Malthus wrote the piece in response to utopian utilitarians who suggested that population growth constituted an unmitigated blessing.
In comparison to the today's world we can understand that most of his idea match the today's world economy but contrary to his idea that by expanding the machines, the need for labor would increase, the demand of labor has decreased and as the wages go up the rate of population reduces. The latter adapting it into a doctrine that insisted on the necessary breakdown of capitalism. These events constitute an unhappy vindication of many of Malthusian doctrine. In Britain war and crop failure stymied economy development.
Approximate Word count =
1776
Approximate Pages =
7 (250 words per page double spaced)
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