The classical economists - Essay Example

ical Economists Affiliation ical economists In the book teaching from the Worldly History by Robert, chapter three does explain about the classical economic theories. Smith expresses of the various economic perspectives with closes reference to various parts of the world. He develops an argument while making a close glance to the origin and use of money, trade blocks, and other economic changes that did happen in the colonies located in America. He clearly exhorts economic laws that are much relevant to the economic patterns.
Adam Smith argues that a society cannot depend entirely on capitalism. Capitalism is a representation of the market system that is not regulated. He does make a clear explanation of how the market system does dictate the nature of the prices to maintain the competition. When the demands of any product are high, the price will always escalate. The tight competition nature of any partaker in the market prevents any society from being exploited by the sellers, as they have to maintain a relatively reasonable price.
Market laws also provide a clear regulation of the producers’ incomes. A business that is fetching immense profits will tend to attract a large number of people. When there is an overproduction of the same product, the cost goes down. Adam also did foresee two critical laws that act to curb greed in the market, the law of accumulation and the law of productivity. Accumulating profits are useful in purchasing new labor and machinery. Profits may subside due to labor and machinery demands. Increasing the population of the workers again is likely to lead to shoot out of the profits again. All these laws were illustrative of the kind of life that did exist in England in 1776 (Heilbroner, 1997).
Reference
Heilbroner, R. (1997). Teachings from the worldly philosophy. New York [u.a.: Norton. Read More