The Ordinary Business of Life - Essay Example

The book of Backhouse, “The Ordinary Business of Life” is helpful for those who already have an economic idea to fulfill the historical gap of economical concept. It is also helpful for those who have a doubt about the old school of thought related to economics and bridging the gap between past and present concepts. (Brittan, 202) in his book, Backhouse discussed how Homer and Hesiod’s writing educated the people of Greece and gave them the idea about how life should be lived. The story of society discussed in Iliad and the Odyssey was “hierarchical, based not on market relationships, but on the distribution of wealth through gifts, theft, prizes for winning competitions, plunder received in war, and tribute paid by defeated cities to their conqueror” (Backhouse, 11) Homer in his writing considered trading as a secondary and inferior way of acquiring wealth as according to him exchanging gift among same rank holders, winning prizes in the war was a better way of earning wealth. (Backhouse, 11) There was very little economic data available from the time of Xenophon (c. 430–354 BC) and Plato (c. 429–347 BC) but it is now a proven fact that the economy at that time was also based on agriculture. (Backhouse, 14) Later on, Aristotle in his concept also discussed the acquisition of wealth for people’s day-to-day activities. (Backhouse, 22) In Aristotle’s view, there were 2 ways of acquiring wealth, one was estate management and the other one was “getting wealth through an exchange”. (Backhouse, 22) People need money to live a good life-this this was the concept of Aristotle, and for him, hunger for excess money could bring about the difference of class and status in society. This was ancient Greek philosophy and it has a great influence on present western thoughts. If one analyzes the concept of neoclassical economics, then it is very clear that both Plato and Aristotle had some key opinions about economics. In Backhouse’s opinion, Plato argued for the subsistence of universals-ideal, pure forms which could only be understood in the course of abstract reasoning whereas Aristotle saw concrete facts as fundamental behind deriving any kind of principle for the society” (Backhouse, 27) These two fundamentals are still the basis behind many economic concepts.

Why Capitalism: Sources of Postwar progress:

Why capitalism is one of the well-known books of Allan H Meltzer. The book was published in the year of 2012. In this paper, the main focus is to analyze a specific part of the book of Meltzer, “Sources of Post War progress. After World War II, there was an argument among the economist of the world that which concept going to control the world economy-socialist or capitalist. With the fall of the Soviet Union, the concept of socialist planning also ends forever as various countries were able to control their economy more effectively with the help of the capitalist concept. (Meltzer, 85). In a capitalist economic system, there was freedom for innovation; various companies were protected by the support of the law, increasing competition also ensured that customer satisfaction started to become a key aspect of the modern generation. One of the key changes in the world economy after World War II was the opening up o the world market for free trade. Free and fair trade policies helped various countries to boost their economy, creating more jobs for people across the globe. (Meltzer, 88-89) several financial policies were implemented after World War II was designed and monitored by the US government, out of which one important one was the Bretton Woods agreement. Apart from that US government also encouraged the concept of IMF to support developing nations financially. But with the time, dependency of various countries on IMF reduced drastically over time, as from 2004-2007, the IMF total loam amount fall from US $ 102 billion to the US $15.82 billion only. (Meltzer, 92). To ensure more oil supply from other countries and to take over the control of world politics Us government invested more in oil import and other various fields which lead up to some financial problems and also increased issues like education and healthcare in the US society. However, it is very clear that to resolve the financial crisis US government could easily adopt various strategies like increasing tax, reducing various benefits, imposing a carbon tax, etc. (Meltzer, 103) But with their slow strategies, some important factors such as education and healthcare were neglected for a longer period of time. (Meltzer, 101-103) “The central problem in financial markets, Meltzer believes, is that policies that prevent failure – 'too big to fail' – give traders an incentive to increase risk. The incentives have to change, not by regulation, but motivated by self-interest – fear of failure.” (Ward, 2012) If one analyzes the points put forward by Meltzer it is very clear that this is a very comprehensible, to the point and useful analysis of the financial troubles that can be suffered by any government and free markets within a democratic system, alongside strong support of capitalism as a way of revival from the world catastrophe.