-
Mercantilist
School of Europe
Began at the 16th century until 18th, and their main idea was the intervention of the State in the economy.
The wealth and prosperity of a nation was founded and depended on the capital it might have.
They considered the commercial trade was unalterable, and main fount of economic development
Mercantilist theorists believed that the amount of wealth in the world was static
In the same way the cumulative capital, the precious metals (gold) might represent a rich state -
Thomas Mun
This British economist is considered the most important represent of mercantilism.
He was one of the first economist in identify the importance of export intangibles goods and he defended the first ideas of capitalism.
Thomas Mun thought the interest rates depended on the conditions of each country.
He founded the bases of foreign trade, with most importance the exports. -
Jean-Baptiste Colbert
He was a French economist of Louis XIV´s court of France, his work allowed to France being a potency of Europe in the second half of 17th century, through a program of economic reconstruction.
He stimulated the entry of foreign hand of work, like Germans, Hollands and Italians.
He supported the trade, through the creation of commercial enterprises and the development of a merchant naval force. -
William Petty
He was the founder of the Theory of Value, for Petty all economic exchange has natural rules, he always thought the prices comeback at its natural level.
The origin of the value is the work, Petty differenced 2 types of values in every product. First: Is the natural value and refers to the internal value of every product. Second: The policy value, it refers to the value of the market, depends of other factors non-natural. -
PHYSIOCRATS
School of French thought, founded by François Quesnay.
The thought the existence of a natural law that will be strong without the intervention of the State.
The intervention of intermediaries in different stages of production process and distribution of goods should reduce the total level of prosperity and production.
Principles: Laissez-faire, faissez passear : “Let do and let pass”
Work of the first Physiocrat “Le tableque economique” -
David Hume
For Hume, the private property is not a natural right, but it justifies by the existence of limited goods. If all the good will be limited and available, the private property it has no sense.
He believed in the non-equality distribution, because the idea of perfect equality will have destroyed the ideas of industry and saving, and it means impoverishment
He was development the theory of money-species flow -
Jacques Claude Marie Vincent de Gournay
He is the responsible of the phrase “laissez faire, laissez passer”.
He was one of the leaders or physiocrats -
François Quesnay
He was a French economist, founder of the Physiocratic school, with his work “Tableau économique” published in 1758
He founded a model of economic reproduction that analyzed the circulation of the rent in society divided in three types:
• 1st: Producer (farmers, and agricultural workers, promoters of net product)
The land is the only wealth and the agriculture let their increase.
• 2nd: Owners
• 3rd: Sterile class -
Anne Robert Jacques Turgot
He was the first in founded the law of decreasing marginal in agriculture.
He published the work “Réflexions sur la formation et la distribution de richnesses” in 1766, at this book it was developing the Quesnay´s theory that says “the land is the only fount of wealth”
Turgot divided the society in 3 classes: Agriculture or producer and the class of entries (stipendiée) or worker and the owner of lands (available). He development the theory of interests. -
Pierre-Paul Mercier de la Rivière
His most known work “ The natural and essential order of policy societies” (1767) considered one of the most completes works about physiocracy.
His work talks the economic and policy aspects, and postulate the social order its possible through the creation of 3 powers: The law, and judicial power, and the power of one institution like government and public institutes. -
CLASSICS
The beginning of the Classic School starts by the Adam Smiths´ work “An investigation about nature and causes of the national wealth”
Classic Model: Basic assumptions: It let understand the reality of an easy way
Perfect competence: It established a general market, that all the enterprises have participation without a monopoly.
Flexible prices and entries (salaries): If the price is higher the demand is smaller, until have a balance it is achieved when the price is defined. -
Adam Smith
He is considered the founder of Classic School
He justified the distribution of wealth between the proletariat and bourgeoisie, because the two social classes are the creators or wealth.
For Smith the capital accumulation is possible by the work differences in equal conditions, so the bourgeoisie had right of the biggest part of wealth.
The State must have the less possible intervention and let the offer and demand forces act free. -
David Ricardo
Ricardo thoughts the population growth means an economic expansion and that increase the aliment needs, that could be satisfy through with prices higher.
He focused the economic analysis from production to distribution, this was one of the most contributions of value-price theory -
MARXISTS
The Marxist school was constituted from the writings and reflections of Karl Marx and Friedrich Engels, as an institution that deepened in the study, development and propagation of the communist doctrine.
The goal is to identify and describe the objective laws that govern the relations of production that arise within capitalism.
A single social class
All people are the same. The distinction of people according to their economic situation is not admitted. -
Karl Marx
He was the founder of this doctrine with Frederick Engels, when he made a critical review of the history of capitalism and raised.
He considered that human society was determined by its material conditions or personal relationships. He discovered the law of the evolution of human history.
Of all the classes that face the capitalist class, only the working class is the revolutionary class. -
Frederick Engels
He founded, in collaboration with Karl Marx, Marxist theory, the theory of scientific socialism, modern communism, the philosophy of dialectical and historical materialism and political economy.
In 1844 he led with Marx the revolutionary workers movement and created the new revolutionary doctrine. -
Stuart Mill (CLASSICS)
Theorist of utilitarianism that is known like “Principle of the most happiness”, it says the individual should act with the purpose of happiness to the most possible people.
Mill believed in the existence of social laws of distribution, influenced by values, customs, social philosophies and changing tastes. -
NEOCLASSICS
They focused in the utility, and is based on the marginalist analysis and the balance of offer and demand.
They considered the determination of demand and prices.
They examined the importance of money, in situations like monopolies, duopolies, perfect and non-perfect competence
They explained the formation of prices, not in function of work quantity to produce goods.
It could have founded by the ideas of Karl Marx, and the workers influence and the social revolution -
Carl Menger
He analyzed an alternative price determination, with offer and demand balance
Menger described how the humans conduce the goods to the best satisfaction
He divided the goods in two types: Economics and non-economics
The determinant fact is not the quantity of work and supplies to produce, in that case is the importance to the satisfy the need. -
William Stanley Jevons
He focused his work at the satisfaction of the consumer (marginal)
He introduced the mathematic aspect at the economy.
He considered the utility can be measured in ordinal terms and that the utility provided by a good is inversely proportional to the quantity of that previously possessed good. -
Alfred Marshall
In 1879 he published “The Pure Theory of Foreign Trade” a recompilation of articles about international trade
He was origin the concept of surplus consumer.
Introduced the idea of 3 periods
1.Market period: The amount of tie for which the action of a subject is fixed.
2.Short term: is the time from which the source can be increased by adding labor and other entries but not adding a capital.
3.Long term: is the amount of time taken for capital will be increased. -
KEYNESIANS
It focused the process of macroeconomics policies in the demand aspect.
It is an economy theory proposed by John Maynard Keynes, based in his work “General theory of employment, interest and money” published in 1936 after the Great Depression.
It focused in the analysis of causes and consequences of the add demand y their relation with the employment level and entries.
The final interest of Keynes was give power to government´s institutions to avoid crisis in the economy. -
John Maynard Keynes
At his main work “General theory of employment, interest and money” he was against to the classic school.
The real cause or unemployment is the insufficient investment expense.
He thought the decrease of work is caused by the real salaries.
He said the saving and investment of money are independents and determined.
The predisposition to consume is changing depend to the entry, and the investment is determinant to the relation in return and interest rates. -
MONETARISTS
Theory formulated by Milton Friedman in the '60s (University of Chicago), based on liberalism and a reaction to Keynesianism.
To avoid that there is more money circulating than reserves, he proposes that the money supply grow a fixed, constant and immovable percentage that is low to avoid inflation but that adjusts to the long-term growth of the country.
Monetarism argues that the public deficit should be eliminated. -
Friedrich A. Hayek
For Hayek, the economic system is explained by the individual actions that in his opinion are rational
Hayek reviewed the marginalist analysis, especially the part dedicated to equilibrium. The balance was defined as the set of individual plans that are compatible with each other
Hayek said that prices in the markets spread information, with prices being one of the signals issued -
Milton Friedman
He was a monetarist.
He proposed to solve the inflation problems by limiting the growth of the money supply at a constant and moderate rate. Empirical economist, was a specialist in statistics and econometrics.
He published his work “Capitalism and Freedom” at 1962.
