HCJ - Lecture Three

Adam Smith believed in the wealth of nature, he explored the relation to why one country is wealthier than the other.
He concluded that underprivileged countries have free individuals and trades.

In the 18th and 19th century, China became a third world country. Adam Smith believed that this happened due to government intervention. Like Newton, Smith believed in moral philosophy, depicting in his book how people self obsess about themselves and how people who give to charity are ultimately doing it for self satisfaction purposes. Wealthier individuals who give to charity are just as bad, giving themselves so much self satisfaction it outweighs the amount of money that they are losing. This idea is similar to that of Hume, who also believed that people want to maximise pleasure and reduce pain. Consequently living off others does no good but making others happy ends up causing pain.
The law of unattended consequence - trying to help people but then you end up damaging them in the process. An example of this is taking away benefits so people have to go out and do something, e.g. get a job.

David Ricardo was the opposite of Smith who believed that value comes from trade. This idea is much more metaphysical. He thinks that there is a spiritual value in things e.g. coal has no value but when humans apply concious effort, it then acquires a value. This also relates to the labour theory. This theory analyses the effects of applying more labour to something, it is more likely the value will increase at the end of it.

Thomas Malfus (1820) is linked to the Victorian era where basically everyone was miserable. Malfus believed that humans will always starve to death and they will always eat everything. He thinks that to be man is to constantly be on the brink of extinction. Ultimately, the ways of thinking I have just described can portray his depressive and very much 'I hate life and everyone' tendencies. Malfus thought that by being married and not having sex will stop people from dying. In the 19th Century, we almost bred to extinction. The modern people would laugh at Malfus and his ideas, however some have said that Malfus is back 'in fashion' due to climate change and malnutrition. In general the price of expensive and decent food is so high that malnutrition is quite common in many third world countries.

Karl Marx thought that economic analysis is useful. Yet also politics are questionable. Labour is the only source of value, that was evidently concluded by Marx. Because of profit and capitalism, people who grow the food will not be able to buy it at the end, which ends up as a large fatal flaw in the system.