ECON 102 Lecture Notes - Lecture 4: Methodological Individualism, Mercantilism, Social Order

• School: University of Illinois
• Department: Economics
• Course: ECON 102
• Professor: Isaac Di Ianni

Document Summary

A zero-sum game is: a situation in which for one party to gain, A mutually beneficial exchange is: an exchange that benefits another must lose both parties: you expect to benefit from engaging in trade. Money constitutes real wealth for a nation. There is a public interest separate from the interests of actual individuals. Methological individualism if we always think back to individual people, we can avoid making certain mistakes. Methodological individualism is the requirement that causal accounts of social phenomena explain how they result from the motivations and actions of individual agents, at least in principle. Adam smith wrote book to attack mercantilist ideas. Classical school of thought foundation of economic study. Advocated idea of social order is natural result of individual self- interest believe this: wrote in wealth of nations . Most would assume self-interest leads to chaos but smith didn"t: thought self-interest promoted order.