PO232 Lecture Notes - Lecture 3: Economic Liberalism, Invisible Hand, Comparative Advantage
Document Summary
From 19th century liberalism to world war ii. Adams smith principle is the idea of an invisible hand that would regulate the economy which essentially means letting the market control themselves. Leave people free to pursue their economic interests; free markets; laissez-faire. Reasoning for this idea or concept he argues that it would maximizes the wealth of the national economy, increases the division of labour/specialization. Countries (and people) should specialize on what they do best. Being able to specialize leads you to contribute to the world. Not about comparing from one country can do with another. They saw free trade as a divine law , that god had set specific resources within certain areas to trade with other nations. Is jesus christ is free trade and free trade is jesus christ. Although they wish to see no government involvement, there is still some little state involvement regarding the military defence, laws, weights and measures (public goods)
