RSM100Y1 Lecture Notes - Invisible Hand, Liberty And Refoundation, Scientific Management
Document Summary
Foundation doc for k, free enterprise, free trade . K: a legal system that safeguards private property and permits free trade in competitive markets; production and consumption are not controlled. Free enterprise will maximize productivity because the invisible hand of self- interest motivates individuals to work hard. Invisible hand: individual desire (free market, no gov, no control over market) The individual desire to maximize self-interest will max productivity. The rich get richer, the poor will also be better off as eco grows. Specialization : demand and supply control market ! Unrestrained k would result in concentrations of wealth and power. Gov must regulate k so that rich and powerful cannot affect political and social policy for their own gain. How does gov regulate us: taxes (fiscal policy) interest rates laws (environment, employment ) enforcement. So should be controlled in some ways . The wealth of a nation depends on its ability to trade freely with other nations.
