POL101Y1 Lecture : How the West Got Rich-Political Economy[Jan30].doc

• School: UTSG
• Department: Political Science
• Course: POL101Y1
• Professor: Jeffrey Kopstein

Document Summary

How the west got rich - political economy 101. Capitalism and democracy have found each other and belong ultimately together. Decline of spanish dominance end of 16th century. Multicultural everyone lived together in the name of commerce. Modern finance raised capital from public sources. Economic hub first stock exchange and first central bank willing to invest. Assuming demand is constant, consumption is a function of price the lower the price the better buffalo. An increase in supply increases price increase consumption. A decrease in supply increases price decrease in consumption. Adam smith the wealth of the nations (1776) Universal division of labour exports and imports. Adam smith says no the invisible hand of the market for productive efficiency should not be manipulated. Fredrick list and alexander hamilton say yes the visible hand of the government for national power should and can be manipulated. Visible hand of the government can alter prices can distort the market.