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Lecture 2

POLSCI 2J03 Lecture Notes - Lecture 2: Malthusian Trap, Classical Liberalism, Corn Laws

Political Science
Course Code
Richard Mc Master

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Political Science 2j03 Week 1 Lecture 2
Varieties of liberalism
o Classical
o Neoclassical
o Embedded
o Neoliberalism
Classical Liberalism
o Adam smith founder of classical liberalism
Moral philosophy
An inquiry into the wealth of nations
Late 18th century = time of revolutionary change
1776 year of US independence
Decade later = French revolution
US revolution influenced by taxes
Time of bankrupt empires (therefore they tax
everything) (ex. British)
Invisible hand of the market place
Market allocates resources in an efficient way
Efficiency = morally good
Market not to be controlled or manipulated by a
monarch (ex. king john the third)
Sellers and buyers can negotiate values amongst
themselves = greater freedom of society
Determining exchange values:
o In use” vs in exchange
In use = something that has intrinsic
value; instrumental for human society;
In exchange = high desirability; high
exchange rate; diamonds
o Labor theory of value
Products that have greater labor input
(more ppl more time) will necessarily
allow for this product to have a larger
value (intrinsic value of labor)
o Natural price for goods and services
o Classes 3 types (Ricardo)

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Ability of landowners to extract
rent will compromise ability of
capitalist to gain profit and in turn
the workers to receive a wage
Malthusian Trap
Worried about workers to improve their wages to
actually change their wages and quality of life
If wages can go up, capitalist makes more
and workers get paid more
This changes lifestyles of workers
(larger families; healthcare; longer
lifespan) what will emerge is a
reserve army of labor entering the
Capitalist therefore cannot sustain
this amount; competition for
wages and therefore wages will be
pulled down
Division of labor
o Specialized tasks labor force specialize in its
operation focusing on one aspect and this will act
as a virtuous cycle of efficiency
o Virtuous cycle
Produce more on a cheaper level and
these capitalist can use their profits to
reinvest into the industry
o Assumption that wealth has little intrinsic value
on its own, point not to gain profit but to
reinvest in industry so it is a virtuous cycle
Expansion of trade (international aspect)
o Comparative advantage (chapter four example)
(focus on steel because their comparative
advantage was greater)
Not only good for your own country but
good for others because they can expand
their trade by focusing on their
commodity; even if they cant do better
than their countries
By allowing another country to sell
their products they will have more
money to buy your products
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