Propensity to trademarketsDOLproductive labournational
propensity to better condition->capital accumulation->%productive workers
pg. 432/3: productive labour.. "the prodigal (waster) perverts capital by not
confining his expense within his income…" Smith compares the noble as church robs
i.e. ppl that steals from the most important thing in society?
Why does money exist?
Limits of non-monetary exchanges/ BARTER
-Money is any commodity that everybody will accept as valuable.
Money is an abstract quality; however, some things work better than
others as money.
-Money must be able to a) lasts and b) its divisible: divided into
-Use value vs. exchange value. Pg. 41. Use value: value you get out of
using something. Major aspect of commercial society: it creates the
possibility of the market price will differ from its real value. That
difference (market v and real) creates the gravitational forces of
market?? How the market regulates the distribution?
How does our lives get coordinated
Natural price: is how ever much it costs to bring products to the market.
Paying wages to worker, rent, and profit.
Real price: the labour time to complete product
Market price: how ever much you sell something for. Differs from natural
price. ppl adjust their behavior.
Effective demand: are the ppl's wants effective meaning: are they able to
purchase it. How? Through the law of supply and the law of demand; law of
demand: there is an inverse relationship between the price of the good and
the amount that buyers are willing to purchase. The relationship between
prices and behavior. Law of supply there is a direct relationship between the
price of a good and the amount of it that will be offered for sale. Supplier will
be more inclined to sell more of it if higher price. behaviour here is not
coordinated by plan but by how prices are… that's why it is a sociological
The liberty of motion: restricts the effective operation of the market
Freedom to change jobs:
Market also works if there is good information
What creates the above conditions?
1) When people conceal profits; GIVES BAD INFORMATION 2) Trade secrets
3) Scarcity; this keeps prices high
5) Certifications; licensees
Perverse consequence when the natural price and market price are too out of
whack> if the market isn't allowed to adjust you end up rewarding ppl with high
profits for which they shouldn't; unnatural reward. their talents should be used
How is it that the market model helps us understand inequality and conflict?
Wage inequality> why some jobs earn a higher price than others
Original State: pg. 91; living in a world without rent, profit, and wages.
No such thing as private property, no stock pile of stuff thus cant start selling
surplus. Everything you produce is yours. You don’t have to take wages form a boss.
Still be unequal, much harder to apply division of labour to agriculture they will be
poorer. Even if we start in this state because the natural human condition leans
toward inequality as we try to better ourselves. in a world where there is private
property, you have to pay rent. Original source of rent is private propert