The Contribution to Economics of Each of the Following

numerous Economists perk up tested to establish why the prudence performs as it does and want to have a stand for predicting how the economy ordain perform when circumstances change. (Nagel, S pg 1 1999) Economists ar just the great unwashed after all, who have lived by opposite eons and experiences in their lives, thus ahead(p) to diffe allow stinting nourishs and views. George Bernard Shaw once say that If all economists were laid cobblers last to end they would not reach a shutdown,(cited in Mankin, Taylor 2006) In this essay we allow for look at what contributions each of the higher up economists have made, keeping in beware the era in which they lived .Re fix uped to be the grow of The clean School of political economy, the Scottish born(p)(p) go smith (1772-1790) was a submit side economist. He attributed stinting elaboration to expanding intersection pointion and share with expanding pick out as a by-product and consequence(Jacobs, J 1985 p12) He pro moted the invisible hand of give up enterp spring, which showed that individuals in pursuing their own egocentric interest could benefit society. In different words, if pile wish to sell, they mustiness say what others require at a legal injury that they are prepared to pay. (Palmer. N, 1990).He in any case supportd the Laissez-faire approach, which means that the g all everyplacenment should just now get twisting in the economy in aim to raise monies for the keep of infrastructure, to sustain the legal system and to keep up the country. In Smiths view as An inquiry into the nature and causes of the wealth of nations which was produce in 1776, he covered the previous(prenominal) ii creations as well as the division of labour and the function of markets. function of labour was not a young idea but Smith reckond it to be very important as a way of increasing wealth.According to Delaney, Smith established the 4 canons of taxation. Firstly, the tax levied on each person should be think to the persons ability to pay. Secondly, the fare of tax which a person must pay should be certain and clear. Thirdly, the air and timing of payment of taxes should have believe to the convenience of the tax payer. Finally, the cost of parade should be small relative to the riposte. (2008) Another belief of Smiths was the Labour possible action of Value, which means the value of a product is equal to the value of the labour involved in its production. Delaney. N 2008).Smith believed that on that point was a distinction between fruitful and non-productive labour. Teachers, engineers and people with similar professions were considered to be non-productive as they did not produce practiceds for resale or give find funds for reinvestment. Smith also introduced the value in use and the value in exchange of a product (the puzzle of value). Twenty years after Smiths demolition his writings and theories were embraced by the next genesis of writers and e conomists who established Smith as the dampen of economic science.It has been said that before Adam Smith there had been often economic discussion, but with him it reached the stage of discussing economics. (Palmer, N) The classical develop of thought was later actual and lithe by Thomas Robert Malthus (1766-1834) and David Ricardo (1772-1823). Both were position born and were followers of Smiths theories. Malthus is know for his famous Essay on the Principles of Population as it affects the Future Improvements of union published in 1798.At this time in history the Industrial regeneration was taking place which meant to a greater extent people were moving from rural areas into urban areas. Malthus dictum many slums being created with food, water and cloaca becoming a huge problem. In his essay, he laid out how the universe of discourse would grow by a geometrical progression, while food submit would only if grow by an arithmetic progression. He identified that there sho uld be a check on the growth of the population. These checks include positive checks which involved death through war and disease or hindrance checks which meant people should have fewer children.He advocated the wages fund hypothesis. The idea shadow this theory was that payment to doers in overabundance of the subsistence direct would lead to an increase in the size of the workers families thus cavictimization the worker to be brought down to a absolution level of existence. (Palmer) This idea dominated for over a century. It was very popular with employers as it allowed them to pay lower wages and to olfactory property justified in doing so. He is think with the theory of the Paradox of Thrift pith that if people save consumption decreases, lede to over-production.To counteract this problem, he advised the authorities to spend monies on non-productive areas such as the building of parks in order to create the circulation of m unityy and therefore reach choose. (Dela ney) Malthusian theories are still pertinent today in close to areas of the liquid crystal displays (lower developed countries) Like Malthus, Ricardo excessively accepted the wages theory and introduced the concept of economic rent. The idea coffin nail this rent was any payment to a factor of production above its offer price(Delaney) For example during the Napoleonic wars, europium turned to Britain for its food supply.This created huge gather up and it became very profitable to produce food. In order to produce as much food as possible, landowners were now using less fertile land which had not been used before for food production. This change magnitude the inquire for land thus driving up the rent, especially the rent for the much fertile land. He thought that kitchen-gardening was very important and industry depended on it. Ricardo inspired by Sutters books developed the legal philosophy of comparative advantage. This formed the basis of inter subject trade.He beli eved in superfluous international trade as it gets the utmost out of resources thus increasing in make do (Nagel) Karl Marx was born in Germany in 1818. He verbalised his revolutionary socialist ideas in his two important publications the Communist Manifesto and rabbit Kapital. Marx basic economic beliefs were very similar the Classical economists, in that he support a labour theory of value but his approach was completely different. Marx cute things to change in such a way that would dish out to improve working conditions for the working classes.He did not believe in the invisible Hand and was more concerned with change and evolution passim society. He believed communism would replace capitalism and that workers would have full throw over all means of production preeminent to a more even assignation of wealth. He believed that the value of a good was the value of the amount of labour incumbent to produce it. Therefore the value of goods produced by the worker was mor e than the wages paid to the worker, the deflexion being a exorbitance or profit to the employer.Marx argued that this was exploitation of the workers by their capitalistic employers. Believing that the capitalists were profit hungry, Marx utter that the demand for labour would amplify which would in turn cause wages to rise. The rise in wages above subsistence level would lower the capitalists dough therefore causing them to look for ship canal in which to lower their wage costs. many employers would start introducing new labour speech machines in order to save money.As the machines would replace labourers this would lead to a rise in unemployment thus leading to omit in demand for goods produced. As more workers became deskilled and redundant their bargaining power for best(p) wages weakened leading to a two tiered society videlicet the proletariat (working classes) and the capitalists classes. Marx believed that the working classes would rise up and overthrow the capital ists regime. The workers would then be in control of the factors of production. He predicted the emergence of oligopolies and trade cycles. Marx died in London in 1883.The foot of maths to illustrate economic theory or as it is better known now as econometrics was introduced by the position born Alfred Marshall (1842-1924). He introduced the law of diminishing marginal utility and coined the name elasticity to describe the response of demand to the small changes in price. He put anterior the well-know scissors grip analogy, handlening the demand and supply to the two blades of a scissors interdependent on each other. He pointed out that there was a difference between the pine moderate and the picayune run for production purposes.Recognising that in the trivial run at least one factor of production would be stubborn in contrast to the long run where all factors of production were changeable. Marshall came up with the concept of quasi rent, which was economic rent earned by labour in the short run and which disappeared in the long run by the increase in the supply of that labour. He believed in a free enterprise economy with some political sympathies discourse for example the knowledgeability of government controls and consumer education.Marshalls theories were tremendously influential in fact his book the Principles of economics (1890) was the main textbook for students of economics up to the great depression of the 1930s. (Delaney) can buoy Maynard Keynes (1883-1946) was an Englishman who became one of the most influential economists of the twentieth century. His influence on economics was so great that the boom the Western industrial countries experienced between 1945 and 1975 has been termed the Age of Keynes. (123HelpMe. com) Keynesian theory advocated the exact opposite to the Classical Laissez-faire approach.According to Delaney,R 2008, Keynes was a demand side economist, who in a bad way(p) that economies could be set by government fis cal insurance. He believed that budgetary policy should be the main economic instrument used in the control of the economy. During the Great depression, Keynes became the life deliverer of the American economy. His main objective was to come up with a solution for the rush unemployment during this terrible time. In his book The oecumenic Theory of Employment, Interest, and Money (1936), Keynes put forward that there could be equilibrium at less than full employment.He stressed that by increasing government disbursement in areas like public works, this could help increase total spending thereby helping to train economic body process to the full employment level. (Palmer,N. 1990). Keynes also introduced the multiplier effect, which means the National Income would rise by some multiple of the initial blastoff of government expenditure. (Nagle, S 1999) Keynes developed the liquidity preference theory of interest rank and also explained that savings and investments were not une ndingly equal to each other. (Delaney, R 2008).Keynes theories are still relevant to this day. Milton Friedman was born in American in 1912. He tried to make economics more user friendly to the layperson. His theories were in direct underground to Keynes. He wrote many books but his main publications were Inflation, Causes and Consequences and A Monetary History of the linked States 1867-1960. His theories first attracted national attention in the 1970s, when the combination of inflation and stagnant economic growth stagflation undercut the dominant Keynesian policies of the post-war decades.Friedman was a monetarist and he argued that monetary policy quite a than fiscal policy should be the main tool used to control the economy. Monetarists believe that increases in the money supply results in an increase in prices rather than an increase in the level of output. They argue, like the classical approach, for no government intervention in the economy, that free-market forces shou ld be relied on to bring the economy into equilibrium.He promoted privatisation of all government-owned or controlled businesses. Removal of inflation is a greater priority to the monetarists rather than the removal of unemployment. (Delaney) In 1976 Friedman won the 1976 Nobel Prize in economics. An advocate of personal liberty, free markets, deregulation, and reduced government intervention in the economy, he has seen his ideas on issues as Social Security privatization, eudaemonia reform, and school vouchers become part of national political debate.