Example Of Essay On Macroeconomic “Worldview” Of David Ricardo, Karl Marx, And John Stuart Mill
Classical economics is broadly regarded as the origin of the modern economic school of thought. Virtually, traditional economics describes the work of a group of economists in the 18th century and 19th century. The core developers of the classical school of thought include David Ricardo, Adam Smith, John Stuart Mill and Thomas Malthus. Classical economic theory is a principal contribution to the philosophical shift; classical liberalism. Technically, classical liberalism came as a philosophical movement in the mid-1700s. The concept emerged as the anti-feudalist ideology and advocated that freedom and rights are embedded in the individualistic state. Centering on individual freedom of citizens owning land over fealty to the monarch liberalism was an evaluation of feudalism that started already to undo well before democratic governments began to emerge.
As such, the classical liberal philosophy argued that state governments are only legitimate when grounded on the consent of the governed. Much of the work done by these classical economists was to develop theories concerning the manner in which markets and market economics work. The worldview of classical economics describes the school of thought that emerged in Great Britain. Mostly, these economists came at a time when Mercantilism held sway, stressing on the maximization of exports and minimizing imports, thus classical economists sort to follow a different approach. They perceived the economy to be in the capacity to maintain its equilibrium through market forces. In addition, they these economists assumed that the government’s intervention in the form of artificial tariffs or sometimes existence of other barriers that altered the free flow of goods and services had severe harms to the economy. In this respect, classical economics was an essential intellectual achievement.
While new approaches of analysis focused to address new issues, advances in technology and rise in mathematical formulations of the neo-classical, social changes tend to transform the economic landscape. In the contemporary world, economic theory is depicted to be still resting in many areas such as trade and monetary theory. The primary principle of the classical theory is that the economy is self-regulating.
It was the work of Adam Smith that has remained to as a foundation of economics as a separate academic discipline. In essence, other classical economists concurred with most ideologies put forth by Smith. The central focus of most of these economists was the virtues of the free market, competition, and specialization. The concept of a free market was based on the secure property, widening markets, capital accumulation as well as division of labor. Contrarily, the mercantilist seemed to advocate for the regulation of all evil human actions. Contrary to Keynesian economics, classical economists advocates for flexible prices both in the context of goods and wages.
In most cases, these economists concurred with the approach that places total reliance on markets as well as anything that hampers with the markets clearing properly. The former belief that agriculture was the primary basis of economic health was overruled in favor of the significance of labor productivity and development of manufacturing. Overall, the economic models put forth by classical economists still impact on economics in the present world. The classical economists relatively believed that the government should not alter to correct this as it will make things worse. In this respect, the only way to enhance growth was to open up the free trade and free markets.
David Ricardo (1772-1823) is considered as the father of free trade theory. This economist proved that the Smith’s free model is just one of the particular cases of free trade theory. Additionally, Ricardo influenced the principles of political taxation and economy; a school of thought which Marx drew the label of classical economics. Critically analyzing these theories are just the same. In essence, it is not possible for one to support free markets and, on the other hand, reject a free trade. Just like the other classical economists, Ricardo looked at Adam Smith’s notion of their analytical paradigm and inspiration of how to do political economy in an all-inclusive sense. According to Ricardo, the government intervention in any of the private operations will minimize the benefits gained by the practitioners involved in the private sector. It is clear that Ricardo’s full proof is a far more refined, but it reflects the fundamental essence of various theories.
John Stuart Mill (1808-1973) on the other hand, is the developer of social welfare economics. As such, this is a body of economic theory that outlines that a prosperous economy has the responsibility, ability, and self-interest to make sure that everyone in the community shares in the profits of the economy. The significance of this perspective is that the economy should produce the greatest importance for free markets. Stuart argued that the government’s intervention could be considered justified if it were in the interest of the entire society (Berthoud & O'Brien, 1976). Precisely, if created more benefits to more people. Therefore, Stuart concurred with progressive taxation, universal suffrage, an end to slavery, public education, and women’s equality. Stuart’s contributed to the social welfare that became the foundation for both the welfare state and the social democratic economies of Northern Europe.
Karl Marx (1818-1883) is regarded as the principal contributor to communist and socialist theory. Despite the fact that Marx was anti-capitalist, he is considered as a classical theorist (Kurz, 2010). This is because Marx was relatively impacted by Ricardo and Smith, thus, he regards himself as their student. Virtually, Marx provided the most comprehensive and structural analysis of capitalism. Nonetheless, most people misrepresent or misunderstand Marx’s economic analysis and confuse it with his politics.
At one point of his life, Marx declared himself not a Marxist rather a scientific socialist. To him, in order for one to be scientific socialist they had to master Ricardo and Smith’s work (Svaglic, 1980). Basing on the arguments put forth by Marx, Ricardo and Smith had developed a science of economics. According to Marx, capitalism is the most progressive economic system and can be more productive than socialism. Marx concurred with Smith and Ricardo acknowledged that no system is better linked personal incentive with productivity and efficiency, and hence he argued that capitalism would change the world’s face.
In conclusion, the classical economist argues that free markets control themselves, when there is no intervention. The three economists; John Stuart Mill, Karl Marx, and David Ricardo subscribe to almost the same school of thought. Nevertheless, Mill contributed to the creation of social welfare economic, Marx played a crucial role in the structural analysis of capitalism and emphasized on the progressive nature of capitalism as well as its generation of internal contradictions. On the other hand, Ricardo introduced the concept of mathematical analysis and he also developed the theory of free trade.
Berthoud, A., & O'Brien, D. P. (1976). The Classical Economists. Revue Economique. doi:10.2307/3500839
Kurz, H. D. (2010). Technical progress, capital accumulation and income distribution in Classical economics: Adam Smith, David Ricardo and Karl Marx. European Journal of The History of Economic Thought. doi:10.1080/09672567.2010.522242
Svaglic, M. J. (1980). Book Review: Collected Works of John Stuart Mill. Vols. 18 and 19: Essays on Politics and Society J. M. Robson; Collected Works of John Stuart Mill. Vol. 11: Essays on Philosophy and the Classics J. M. Robson. Modern Philology. doi:10.1086/391017