3. Smith & Keynes
1. an insatiable, dynamic, disembedded Two-edged Sword
2. Adam Smith, Mercantilism & The Wealth of Nations
3. The Society of Perfect (Economic) Liberty & The Disembedded, Self-Correctin Free Market Economy
4. The Keynesian Challenge to Orthodoxy
5. The Keynesian Welfare State
6. The Attack on Keynesian ism (Right & Left)
7. Marilyn Waring versus Economic Orthodoxy: UN System of National Accounts
Economists are unhappy when they have to examine variables that are not easily measured by
something like a price…-Ernest Schusky
Heilbroner, Twenty First Century Capitalism
Capitalism is insatiable, human beings are creatures of greed, we want more & more
life is about accumulation, accumulate more more more
Capitalism is dynamic, it’s all about change
Nothing has ever produced wealth like capitalism
All that is solid melts into air, all that is holy is profaned
Capitalism is all about creative destruction
Adam Smith wrote in the wealth of nations that the division of labour locks the…the productivity
of labour goes through the roof
Creative destruction (always something new)
Capitalism is Disembedded: the economy becomes disembedded from society
Economic life was embedded within society: it was viewed with distrust with most of the mocers
and shakers of society
There is no economics in traditional societies; only with the arrival of the economy is something
Capitalism simultaneously produces wealth and misery (Karl Marx)
Capitalism produces the good like nothing we have ever seen before, but at the same time it is
Gut wrenching misery as society is transformed
Aristotle is not a fan of Economics
There are limits to acquisition, lending money is a sin, if a person is in debt, they are lacking in moral
fiber In futile society, the Aristrocracy, political life dominates economic life.
The economy was embedded in society, it was limited, local
Mercantilism is the target that Adam smith is aiming at. He is not a fan of Mercantilism.
Mercantilism is the early stage of capitalism. Mercantilism is the target in the Wealth of Nations.
Karl Mar’s work is mostly comprised of Adam Smith’s work.
Adam Smith: society of perfect liberty to maximize the wealth of nations but at the same time
limiting the power of large corporations and big governments.
Governments should pursue economic policies which include free trade and comparative advantage.
1760: Free trade between Scotland and England.
1776: Adam Smith is writing during this time and sees