GLBL 210 Lecture Notes - Lecture 2: Commodity Fetishism, Primitive Accumulation Of Capital, Invisible Hand
Document Summary
The economy is the large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated. This is also known as an economic system. Originally, oikos, which is how one manages a household. An approach to economics that relates supply and demand to an individual"s rationality and his/her ability to maximize utility or profit. Price is the intersection b/w supply and demand. Assumptions: people have rational preferences and outcomes can be associated with a value. Externality- the effect a transaction b/w 2 parties has on a 3rd party. Smith wanted competitive markets and favored their pivotal role, while marx said that these markets only propagated greed and dishonesty. Invisible hand, classical economics (div. of labor market econ. Smith was never an economist; he was a philosopher. In a world without god, this is how morals and societies are propagated. Therefore, it is through trade that harmony and order are achieved.
