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Lecture 2

IDSB01H3 Lecture Notes - Lecture 2: Epidemiology, Consumerism, Creative Destruction


Department
International Development Studies
Course Code
IDSB01H3
Professor
Ryan Isakson
Lecture
2

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IDSB01 Lecture 2 Jan 15, 2014
Schools of Economic Thought & Forms of Economic Provisioning
Theorizing Economic Provisioning
Three properties of a theory:
oObject (objective of the theory) – what the theory is trying to understand
oEntry point – the means through which the theorist is trying to understand, where
he begins. A somewhat arbitrary point, will be shaped by theorist’s
preconceptions, which could be culturally shaped, common practice, political
values…
oLogic – explanation of how one gets from the entry point to the objective.
Ex. Why are people sick?
oDifferent scientists employ different entry points:
oA nutritionist will begin by looking at diet, a biologist will look at genes, an
epidemiologist will look at their environment, psychiatrist may look at mental
wellbeing, a religious leader may look at their faith and spiritual wellbeing.
oThe logic and the explanation is going to vary based on the entry point.
5 Schools of Economic Thought
Classical
Marxian
Neo-classical
Institutional
Keynesian
All are Western schools of thought
All share common object of study: understanding capitalism
Try to understand Western experience – particularly with capitalism
All based on classical P.E

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IDSB01 Lecture 2 Jan 15, 2014
Is it appropriate to try to understand the dev’t process in the Global South through the
lenses that we use in the North?
Classical Political Economy
Objective:
oCapitalism (Is it good for society?)
“Born” 250 years ago – emergence of capitalism
Adam Smith – philosopher, concerned with the moral implication of this new form of
economic provisioning (capitalism)
Society coming out of feudalism where there were lords and serfs. Serfs were excluded
from cultivating their common land; instead began to sell their labour.
Entry Point:
oIndividuals (Smith); Class (Ricardo, Malthus)
Thomas Hobbes’ “Leviathan” (17th centrury) made 3 assumptions about humans:
oAre self-interested, only care about ourselves, care about others if they have
something to offer us
oHave unlimited, insatiable wants
oHumans are aggressive
What would happen if we gave them freedom to do what they wanted?
CHAOS. The strong would beat up the weak and take their stuff.
Argued that what is needed for the betterment of humankind was a strong
state, a feudal lord, who may extract taxes in return for social order. A
strong church to instil morals.
Smith was writing the Wealth of Nation (1776), doesn’t question Hobbes’ assumptions,
but wonders if freedom can be had without having chaos.
oIndividuals had freedom, could go find employment in a factory, not confined to a
particular manor.
oHow can this freedom be had in a way that would maximize social wellbeing?
Logic:
oWe don’t really need a strong state, just need:
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IDSB01 Lecture 2 Jan 15, 2014
Private property rights – individual rights to sources of wealth. Utilize
their property as they choose.
Competitive markets – goods and services are sold, with many buyers
and many sellers
oThese 2 institutions will guide these individuals, as if by the “invisible hand” to
maximize national wealth
oCONCERNS: Smith said there could be potential drawbacks: people might not
care about the workers coming into their factories. Will handle them in a way that
maximizes profit but not individual’s well-being. Division of labour is not
intellectually stimulating and often does not require much skill -> nothing stopping
owner from hiring unskilled children.
Could lead to dumbing down of humans
Alienation of labour -> no relationship/collaboration between workers.
Marxian Political Economy RADICAL
Objective:
oCapitalism (Why does it generate suffering?)
oMarx, like Smith, recognized capitalism’s productive potential – produced a lot of
wealth
oBut Marx was writing in the 19th century, saw a society full of suffering,
powerlessness
oEven though workers technically had the choice to not sell their labour or not
work for a particular employer, they didn’t really have any other options  wage
slavery.
Entry Point:
oClass – socioeconomic
Land-lord class, former feudal lords
Labouring class, working class –sell their labour power
Capitalists - those who own means of production
Logic
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