Mr. Bertrandt
Industrial Revolution 1750 Great Depression 1933
Pioneer and founder of classical economic thought. *(1776)
Wrote book of economic theories called “Wealth of Nations”
Most well known theory is “Laissez Faire”. Theory that government stays out of business, it allows buyers and sellers to meet in an “open market”, and supply and demand will regulate prices.
Theory that profit motivation would result in an economic society obtaining the best goods and services, essentially competition forces producers to turn out the highest quality goods and services.
Classical Economic Thinker *(1796)
Theory that the population increases more rapidly than its food supply. Population = 2 – 4 – 8 – 16 – 32 – etc. Food Supply = 2 – 4 – 6 – 8 – 10 – etc.
This means that the earth cannot produce enough food to supply all of the people that inhabit it.
Malthus concluded that unless some factor intervened, the human race faced a “pessimistic future”. 1.War 2.Famine 3.Disease 4.Natural Disaster
Theory that the food supply would hit a point where it could no longer increase even with the help of science or fertilizer.
Malthus concluded that the “Passion of the Sexes” should be limited through late marriage and abstinence.
As a result of Malthus’ findings and theories Economics was deemed a “Dismal Science.”
Classical Economist Philosopher (1817)
Theory that workers should receive no more than a subsistence wage, that way entrepreneurs can control all of the wealth.
Ricardo believed that the entrepreneur should control wealth because it would result in progress and a better society.
Classical Economic Philosopher (1820)
Most famous for developing the “circular flow model.” The exchange of resources and money for goods and services and money between businesses and households. Believed that the model was self-correcting based on supply and demand (wants and needs) and scarcity.
3 Things all 4 Classical Economists Agreed On. 1. Limited Government 2. People’s right to private property. 3. Market will regulate itself.