Markets and Civil Society: The European Experience in Comparative Perspective - Essay Example

Market and society Introduction The market and society interlink so that trade business would occur. Von, (2009) s that both the society and the market influence each other in the sense that if the market domain is low then the impact on the welfare is much higher and vice versa. In order to fully understand economics from the perspective of David Hume it is primarily very important to understand who David Hume was. Understanding the historical period in which David Hume lived is pivotal in unde3rstanding exactly what motivated his frame of thought as far as economics is concerned and what factors informed his insight and ideas. David Hume was born in 1711.he was born in Edinburg in Scotland. His place of birth is very significant in understanding the man and by extension the thinking of the man into economics and his contribution to the school of economic thought. The time period in which David Hume lived was the time of the agrarian and industrial revolutions. This means that economics was an integral part of mainstream society at the time. The impact of the industrial revolution was highest in Europe where Hume was born. This means that if there was an individual who could fully understand the economy and come up with revolutionary economic ideas back at the time the person had to most definitely come from Europe. Thus David Hume was placed just perfectly in terms of proximity to economic action which would fuel his interests in economics and make him one of the leading and highest esteemed economists of all time. David Hume attended the University of Edinburgh at the unique and unusual tender age of twelve. At the onset of his higher learning David Hume considered a career in law. Later in life he changed his interests and aspirations from inclinations towards law to inclinations towards philosophy and especially towards economics. This is because economics are a very large part of philosophy. A good understanding of the economy can lead to a philosophical revelation and enlightenment about a given society. Matters economy can also act towards shaping the philosophical ideas of a given people in a given place. Thus the close relationship that exists between economics and philosophy drove David Hume to pursue both and stand out among his peers as the foremost intellectual in the two fields with expertise unmatched by anyone who lived at the time and very few who came afterwards (Hume, 2005). In the historical period when David Hume lived demand was very high. This demand was the demand of a stable economic system that would bring balance and stability to the continent of Europe and to the world at the height of the industrial revolution. People needed a stable system of economics that would leave them at ease with concern to the state of their investments as well as the state of their assets. The time in which David Hume lived was also a time of heated political thought and political insight. Politics was becoming an integral part of society as a whole and people became more and more interested in politics. The interesting thing about politics is that it is directly related to matters economics. The two topics are intertwined. Politics always affects economics and the reverse is also true in that more often than not economics has a more than mild effect on politics.in fact economics is one of the main aspects or rather factors that affect politics directly and dictate the political direction which a given society will take in relation to given issues that are directly under the influence of the economics of the place. Society therefore needed someone to draw the line between politics and economics. There was a demand by the general public for an individual who would clearly outline the role that politics plays in economics and the roles that economics plays in politics. This time period also saw a great rise and increase in militarization all over Europe. There was a growing demand by the general public for an individual or rather a class of individuals who would explain to the people the effect that militarization has on the economics of their country and how it affects their personal finances either directly or indirectly. With increasing militarization there was also increased worry in terms of economic stability and the future state of the economy. Thus there was a demand by the public for the breakdown of the state of safety of the economy in light of the increasing militarization and how this militarization would affect the economy right from the state level all the way down to the very grass root level to the local citizens. David Hume was a close friend to his economic partner Adam Smith. Ideas thoughts and theories of David Hume According to Zhong, (2010) David Hume was a great economist and came up with the monetary theory that states that the major purpose of money is exchange whatsoever the quantity in a given country. This means that an increase of currency in a country will lead to increase in the prices of commodities within the country then it would later result to less impact on the neighboring countries market. This is because more money in the country will drop the prices of the products that lead to a less impact on the other market. David Hume came up with the monetary theory. This theory is very important as far as money and by extension economics is concerned. This theory is especially important because it outlines the importance of money and the significance of money both at the time of the formulation of the theory by David Hume and at current times where money is beyond the shadow of a doubt the main driving force of world economies. The theory states the main purpose of money. According to the theory the primary purpose of money is exchange. This purpose stands out irrespective of value. This means that irrespective of the value of a given form of money or a given form of currency the primary role of money is exchange. This is the bottom line as far as money is concerned.an example I current times would be the currency of first world countries and the currencies of third world countries. The currencies of first world countries far outweigh the currencies of third world countries in terms of value. Irrespective of these very large disparities in terms of value all currencies are still used for exchange. This means that currencies in third world countries and currencies in first world countries are all used for exchange irrespective of their value or the disparities in value when compared to other world currencies.as a result of this fact currency has direct effects on the prices of commodities be they basic or otherwise in a given country. Increase in currency in a given country would lead to increase in the prices of commodities within the country. As prices of commodities increase within a given country this would have little effects on neighboring markets and neighboring countries. This is because more money in the country will drop the prices of the products that lead to a less impact on the other markets in neighboring countries o in locations under a different financial jurisdiction from the country in play (Marshall, 2004). In general Hume talks about market stability with reference to imports and exports and the role that money or rather currency plays in all this. Hume asserts that any surplus with reference to exports that might be encountered or in other words achieved would in turn be paid for by imports mainly imports involving gold and silver. This would greatly affect the supply of money and as a result it would cause prices of commodities to rise. The rise in prices of commodities would be inversely proportional to exports. This means that as the prices of basic commodities rise the exports would reduce until such a time that there is a perfect balance between the imports and the exports. Impacts of the theories on the modern world The increase of the quantity of money in a country would lead to collapsing of internal markets that leads to collapsing of the exporting sector while promoting importation of cheap goods from neighboring country (Von, 2009). These ideologies affect the economy, the markets and politics in the sense that currency runs everything in the country. These ideas by David Hume are very relevant especially in the current markets. This is because the current markets are more inclined towards globalization. Globalization means that there is more interaction between countries in terms of trade. International markets are thus an integral part of mainstream economics and commerce. The increase in the quantity of money in one country could lead to the collapse of international markets because it would lead to collapsing of the exportation sector and encourage the importation of much cheaper goods from neighboring countries. The importation of cheaper goods will also affect the quality of goods and material being brought into a particular country.as result citizens of this given country might end up mot getting their money’s worth in terms of imported goods which their country may be unable to produce or manufacture. This will in turn affect the economy of the given country very negatively and might lead to wastage of a lot of money. Socially, Hume’s thoughts in relation to the trade and currency trends might lead to collapsing of the markets, discourage investors, and contribute to poor living standards in the country. Investor interest is one of the major driving forces for economies all over the world.it is therefore imperative for any economic system to entice as many investors as possible into its quarters. Anything that repels investors from a given economic setting is tantamount to economic suicide. Thus if investors lose their interest in a given economic setting the economic setting will collapse and cease to have any significance at all as far as world markets are concerned. Politically this would lead to slow development of facilities, institutions and growing of vices such as corruption. This could also lead to the collapse of a political system. This is because as the economy loses its grip the people will more often than not tend to lose all confidence they had in their government. This could lead could lead to anarchy and lawlessness running rampant in the streets and the rule of law being ignored because it is the economy that is the building block of any social setting. Currently, the world relates the currency to the currencies in the leading countries that are capable of maintaining their economy such as the dollar or the pound (Zhong, 2010). This helps regulate the effects of the local currency on countries economy. Thus these major currencies are used to keep check on other world currencies. Thus all world currencies have a measuring bar which they must keep up with in terms of value of money. These major world currencies can also be used to upset the balance in a situation where some currencies are losing their value and leading to the collapse of the economic system in which they are used. Major world currencies thus act as bail outs for the minor world currencies if need be. References Von, P.-D. V. (2009). 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