The Dismal Science of Economics Adam Smith Thomas

The Dismal Science of Economics Adam Smith, Thomas Malthus and David Ricardo

Adam Smith Economic liberalism Believed in the trickle-down theory If the lot of the producer/business owner improves, so will the lot of the people working for him No real governmental intervention to the markets Laissez-faire or “hands” off approach

Thomas Malthus Reverend and economist Believed that food production would be outstripped by population growth Many believed in the Maltusian prediction Yet, with agricultural and industrial innovations, food production increased fivefold after his prediction.

David Ricardo Business owners set prices and wages in order to increase profit. Increasing prices increases profit Increasing wages does not increase profit, so why do it? Wages are determined by a variety of factors – a boss should base their wages offered on the environment around the worker – how much will it cost to provide for themselves/their familty? Wages are determined by the MARKET in which they’re in Labor is something else to be bought and sold, just like any other product Laws like a minimum wage law not only degrade the poor, but also the rich

Rostow’s Development Model What are the 5 stages of Rostow’s Development Model? What does each stage look like? 1. Traditional Society – high percentage of farmers , a lot of $$ to non-productive sectors like religion 2. Preconditions for Takeoff – Educated, elite group initiates economic activity through investment in new technology and infrastructure. 3. Takeoff – Rapid growth to limited activities like textiles or heavy industry. 4. Drive to Maturity – Modern technology diffuses, workers become more skilled 5. Age of Mass Consumption – Economy shifts from heavy industry to service sector and consumer goods

Rostow’s Model and Types of Jobs Traditional Society Primary sector – harvesting raw materials Preconditions for takeoff/Takeoff Drive to Maturity/Age of Mass Consumption Secondary sector – heavy industry and a few other industries like textiles Tertiary sector – exchange of goods and ideas

Reactions to the Industrial Revolution Socialism and Romanticism

Early Socialism Classical liberalism stressed equal treatment under the law and representative government The idea of economic equality was not in play. Economic equality was not the goal under a classically liberal government Challenged the order of society as well Women should be fully emancipated from men Marriage and the middle class family unit was stifling to women and men Openness of human nature/reaction to the rigidity of bourgeois society

Karl Marx (1818 - 1883) “…history of all previously existing society is the history of class struggles. ” Taking cues from the French utopian socialists Thought the proletariat (modern industrial worker) would rise up in violent revolution against the new ruling class, the bourgeoisie For Marx, the bourgeoisie had overthrown the old order of landed aristocracy and absolute rule that went along with feudalism and replaced it with a system that was favorable to their needs as business owners The common worker still had no rights

Marx’s Influences French Socialists Ricardo – more in a negative sense though. He takes Ricardo’s argument and says that profits are actually stolen from the workers’ wages Georg Hegel – German philosopher – basic tenet of his belief was that everything is moving to an absolute point – 2 forces are opposed, but they eventually synthesize into one point. There is always a dichotomy of forces/ideas. For Marx it boiled down to - Humans need something to react to in order to change. The bourgeoisie reacted to the aristocratic oppression, created an industrial society. The workers will react to the economic oppression and create

Classicism Typified by the Enlightenment: the Rational, the Observable, Empiricism and focus on REASON. In the Arts – taking a cue from the clean lines of the Greek and Roman artists. Symmetry, Nature as an idyllic and passive backdrop.

Jacques-Louis David, Oath of the Horatii, 1784

Louis XIV, King of France and Navarre by Hyacinthe Rigaud , 1791

Romanticism A reaction to the reason and order of the Enlightenment Desire for unbridled human emotion and experience Nature seen as an awesomely powerful force Seen in music, literature and fine art of the era Pre. Raphaelites: Art and literature society in England that was trying to return to a style akin to the early Renaissance before everyone started copying the masters like Michelangelo and Raphael

Ophelia, by John Everett Millais

Proserpine, by Dante Gabriel Rossetti

"Thor in Hymir's boat battling the Midgard Serpent" (1788) by Henry Fuseli

Henry Fuseli The Nightmare (Incubus) 178182

Luddites 19 th century Violent reactions to the mechanization of the textile industry in particular Burned down factories and performed “industrial sabotage” Modern usage to refer to people like Mr. Waltz and Ron Swanson who eschew most forms of technology