POL208Y1 Lecture Notes - Lecture 15: International Political Economy, Complex Number, David Landes
Document Summary
The creation of a free market or why there were no economists prior to adam. The nature and causes of the wealth of nations. To this day, that basic observation that the wealth of nations is determined by how much it can produce and therefore consumes prevails. The only measure that counted for adam smith was consumption. Wealth = how much a society can produce and thus consume. Wealth of nation is a reference to how much a society can produce and therefore how much it can consume. Causes: division of labor: of pin factories. Societies need to encourage a complex division of labor, for specialization. Adam smith invented the idea of the modern market. Markets were under the control of political authorities, who can determined who can trade and what to trade, had to get permission from the political parties/royal houses which usually did this through a system of gilts.
