Political Science 2211E Lecture Notes - Vilfredo Pareto, Carl Menger, Pareto Efficiency
15 Dec 2013
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Document Summary
Political economy of canada neoliberal approach to economic policy. Theorists associated with the classical school: adam smith, david ricardo, thomas malthus, James mill and his son james stuart mill. The liberal theory originally focused on the supply, not demand, side of economics. Income is a function of whether an individual owns labour, land, or capital: the implication was that profit was theft by another name, classical economist recognized the unfairness income distribution but didn"t oppose it. Theory of competitive advantage: david richardo: free international trade benefits both countries involved, aka heckscher-ohlin-samuelson model. Stanley jevons, carl menger, leon walras marked the beginning of marginalism in liberal political economy. Marginalism: people receive utility (satisfaction) from consuming commodities. However the consumption of each unit gives increasingly less utility until a point of marginal utility" is reached. Prices are determined at a point at which demand = supply. Higher prices: supply increases + demand decreases = surplus.
