Economic Theories - Essay Example

Comments (0) Cite this document
Economic Theory Instructor Institution Date Economic Theory a) How Ricardo Criticized and refined Smith’s Theory Classical economic theories are believed to have begun with Adam Smith’s The Wealth of Nations in 1776. Adam Smith’s works were so influential in the 18th and early 19th century, before a group of other classical and neoclassical economic theorists, led by David Ricardo emerged to modify Smith’s theories…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.7% of users find it useful
Economic Theories
Read TextPreview

Extract of sample
"Economic Theories"

Download file to see previous pages His theories helped to establish the foundation to capitalism. Adam Smith postulated that markets were capable of regulating themselves without any external intervention. He introduced a new approach of measuring national wealth using income as opposed to the king’s treasury (Derek, & Steven, 2003). According to him, income was a product of land, labor and capital, and that the income is divided among capitalists, laborers and landlords, in form of interest, rent and wages. Smith’s theory had some limitations, despite helping to revolutionize the economic thought at the time. David Ricardo identified the weaknesses of Smith’s theory and opted to rectify them and incorporate them in his own theory. Among the things he agreed with Smith’s theory include the use of income to measure a country’s wealth. He also agreed with Smith’s view of free markets. He however built his economic thoughts on the three main factors of production; land, capital and labor, that had been identified by Smith (Derek, & Steven, 2003). Ricardo introduced other new ideas in his theory to build on Smith’s ideas. He for instance introduced the idea of international trade as the best way to help the local markets. He introduced the concept of comparative advantage in international trade. Comparative advantage suggests that countries only produce those products that they have a higher comparative advantage and import those which they cannot produce efficiently. b). Marx’s opposition to Capitalism Karl Marx was one of the most vocal thinkers to be opposed to Capitalism. He saw capitalism as just any other historical stage that would eventually end and be replaced by Socialism. According to Karl Marx, capitalism introduced classism in the society. The society was made up of the capitalists who were the land owners and owners of factories and the working class, whom provided labor in the lands and factories owned by the capitalists. He identified that these two main classes had differing interests that were the source of conflicts in the society. The capitalists’ main objective is to get profit and increase their wealth through minimizing their costs, including offering low wages to their workers (Derek, & Steven, 2003). The working class on the other hand strives to maximize their wages. These two compete g interests will lead to conflicts in the society that would eventually lead to a decline in the capitalist system and create ground for socialism. Marx was opposed to the capitalist system because of the instability it would create in the society where the working class would be left dependant on the capitalists who owned massive resources. According to Marx, leaving wealth to a few private individuals would create imbalance in the society and preferred socialism which would take the wealth from individuals and eradicate classes and ensure equality of all people in the community. The labor theory of valu ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Economic Theories Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from
(Economic Theories Essay Example | Topics and Well Written Essays - 750 Words)
“Economic Theories Essay Example | Topics and Well Written Essays - 750 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Economic Theories and the Music Industry
...?Economic Theories and the Music Industry XXXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXX The music industryis one of the most advanced sectors in numerous fields for the high role that it plays in the life of many. Music has been used ever since age old times to assist in the expression of emotions that a person may bear. Another role that music has played is in the relaying of information that affects the society in a particular manner. There is also the vast use of music for entertainment and pure relaxation. Musicians have made a living out of selling their music formats and thus the identification of the importance of the industry. However, of contemporary times, the sales of music formats have fallen...
8 Pages(2000 words)Essay
Adam Smith and Karl Marx Economic Theories
...? Topic: Lecturer: Presentation: Introduction Economic deals with study of human nature hence most theories ineconomic are based on the nature of humans. Adam Smith and Karl Marx are considered as the greatest economists of their time, in fact Smith is regarded as the father of modern economics (Skousen, 3). Most of the theories in economics today are based on the ideas of Smith as well as Marx and Keynes. These individuals have different ideas on how the economy works and the best economic system that would ensure the good of all people in the society. They also differ on the role the government is supposed to take to drive the economy...
4 Pages(1000 words)Essay
Economic Theories of Adam Smith
...? Economic Theories of Adam Smith Economic Theories of Adam Smith Introduction Economics in general can be defined as a social science concerned with allocation of resources among competing users in the society (Lipsey & Chrystal, 2011). Productive resources are scarce as they do not exist in a sufficient quantity to satisfy human wants. The scarcity imposes a variety of constraints on both the choices of the society and the opportunities open to members. Economists, therefore, examine the activities of consumers, producers, suppliers of resources and the actions of the government in an attempt to examine how resources will be allocated efficiently. This...
5 Pages(1250 words)Research Paper
Adam Smiths economic theories
...?Adam Smith’s economic theories According to some ical economists the most important economic factors are capital accumulation and growth, and this concept has originated from Adam Smith’s Nature and Causes of the Wealth of Nations. In his book, Smith has argued that it is the interaction between various economic forces that is responsible for the dynamic progress of economic system in a nation. Smith has emphasized that a historical perspective is necessary to study the science of man and society, and only with this study it is possible to establish an efficient social science system. He has said that in any society it is the collective contribution of...
5 Pages(1250 words)Research Paper
Economic Theories. Explain the key theories of Adam Smith relating to the free market the 'invisible hand' non-intervention
...?Economic theories Adam smith and the concept of free markets Adam Smith argued that in free market, there are many sellers and buyers and there no one cares about their personal staffs. All they care in the free market is about the prices, sales, and the goods that have been sold. Moreover, the important things in the free market is the different types of free market philosophy which include the concept of unrestricted free market philosophy, and the competitive free market philosophy. The Philosophy of the unrestricted free market means that the market of the goods does not need permissions of importations from other parties even from the ministry of the commerce. In addition, the philosophy of the...
4 Pages(1000 words)Essay
Economic Theories the "means test" given by Adam Smith. He noted that with an increase in productive capacity the "capitalists themselves, together with the landlords and other rich persons" might "save from their revenue and add to their capital," in effect, withholding money and decreasing "effectual demand" (Malthus, 1836: 314-22) (Hodgeson, p.3). Malthus influenced Keynes significantly with his arguments, even though Malthus's reasoning is considered week and mutually inconsistent in comparison with Keynes' valid denial of Say's Law. Malthus's critique ignored Say's unreal assumption that economic analysis deals with a barter economy. Keynes criticized Malthus for overlooking this fact in chapters 3 and 23 of The General...
9 Pages(2250 words)Essay
Macroeconomics- comparing classical economic theories and keynesian economic theories
...A Comparison between ical and Keynesian Economic Theories Introduction Economic theories have been developed over the years on the basis of thechanges in the economies and circumstances in the economy. These theories have been bifurcated into various categories such as classical, neo-classical, Keynesian and so on. Classical economic theories refer to those theories and beliefs that have been propounded by experts in the 18th and 19th centuries (Peet, 2009). Keynesian economists represent those economists who support and advocate the work of John Maynard Keynes. Majority of Keynes’s work happened during...
3 Pages(750 words)Essay
Economic Theories
...Economic Theories Economic theories are important to our society as these depict the exact living conditions of the people, the manner in which they interact with the different yet significant factors and elements that are present and the essential basis of gaining the finances from the public and private domains. Thus the basis of gaining a good insight into these economic theories comes from the way the people conduct themselves in line with the ethical codes, moral procedures, legal obligations and so on, that are generally governed by any society. A case in point is the distribution of the most basic needs for the sake of the people and the way in which these are deemed as sufficient or not from the general standpoint... . The...
1 Pages(250 words)Essay
Using Economic Theories to Analysis a Company
...from the competitors now. Its marketing strategies are believed to be ineffective compared to that of the competitors’. This report analyses the effectiveness of Apple Inc.’s marketing strategies in recent times with the help of its 2013 annual report. Table of Contents Executive Summary 2 1.0 Introduction 4 1.1 Introduction the report 4 1.2 Introduction the report 4 1.3 Introduction the report 5 1.4 Data collection methods 5 2.0 Case study of Apple Inc. based on different economic theories 6 2.1 Endogenous theory 6 2.2 The AD-AS or aggregate demand- aggregate supply model 8 3.0 Conclusions 10 References 11 Appendix 12 1.1 Introduction 1.1 Introduction to the report The recent recession...
10 Pages(2500 words)Essay
Using Economic Theories to Analysis Apple Inc
...Economic Analysis of Apple Inc Contents Introduction 3 Rational of the Study 3 Research Aim 3 Research Objectives 4 Company Profile 4 Data Collection Process 5 Economic Theories 5 Economic Application Analysis 9 Recommendations 19 Conclusion 20 Reference List 21 Introduction The state of business affairs has become highly competitive and complex in the contemporary era. At this juncture, firms need to analyze their market position and commercial success in terms of subjective theories. Apart from the theories of strategic management and marketing, commercial proficiency of a contemporary business firm can be judged in terms of...
10 Pages(2500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Essay on topic Economic Theories for FREE!
logo footer
Contact us:
Contact Us Now
FREE Mobile Apps:
  • StudentShare App Store
  • StudentShare Google play
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • Miscellaneous
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us