SOSC 1000 Chapter Notes - Chapter 1-3: Price Fixing, Mercantilism, Market Economy

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Considered a moral philosopher as opposed to an economist. Mercantilism: futile era to modern era, where capitalism becomes modern form of economisation. Under mercantilist period, labour is not free. Restriction on workers, when they can work etc. Motivated to write because of opposition to mercantilism. Espousing fundamental change for benefit of large numbers of people who are not economically well off and are limited in their ability to be engaged in economy. Smith advocated free market economy to enhance wealth of nations and economic liberty of individuals, while limiting political power of bourgeoisie. Believed in a fair trade and self balancing economy. When there is excess aggregate demand (too many goods, not enough 22613$ to purchase), government must step in to correct economy. If below 4 conditions are met, economy will self correct. When there is a bust, forces will kick in and lead economy to equilibrium: the distribution of income must be relatively equal.

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