ECON 19 Lecture Notes - Lecture 5: Utopian Socialism
Document Summary
Approach to economics which rejects the abstract-deductive method of the classical economists. Emphasis on context of economic phenomena, changes in economy and. Economic phenomena inseparable from social phenomena structure are always explained by societal factors, therefore not every economic law is applicable to every country. Abstraction does not produce conclusion with universal validity. Laissez-faire policy also depends on the societal structure, it is not applicable to every country. In the historical school, there were conflicting opinions on the methods of political economy. Economic relationships can only be understood in their socio-historical context. Economics is an empirical (and not an abstract) science. Inductive method: facts as starting-point for discovery of interrelations. Builds from assumptions and essences to deduce conclusions. Capitalism has grave moral flaws (excesses, inequality of wealth, income, power) need for socio-economic reforms to remedy these flaws. Socialism as economic system: state property of means of production, directive control of investments, more equality.
