PHL295H1 Lecture Notes - Lecture 2: Mathematical Proof
Document Summary
Efficiency- based justification (ebj)- we should have a market because there are more efficient ways to have a market: committed to efficiency although freedom may be constricted, at least we wont undermine the total wealth. Liberty- based justification (lbj)- in a market economy people have a more liberties (less liberty constraints: opens a range of freedom, even though it doesn"t increase efficiency there will be still liberties. There are trade-offs- if we still keep giving liberties they are going to be negative impacts on efficiency and vice versa. Many people say liberty and wealth go together but economists like smith and freeman do not agree. Self-interest- important forces behind human behaviour in markets (main study): wealth of. Nations (books)- he wants to argue against mercantile policies- tended to have beauracuy tendencies- a how a nation can increase its wealth: Markets are more efficient then other form of organizations in institutions- creating a bigger market creates more wealth.
