Economic Philosophies I: Classical Liberalism

• 15th - 18th century
  • Mercantilism (an absolutist monarch's goal)
    • Wanted colonies for more money
    • More money = More military
    • More military = More Wars = Conquering/Power
• 18th century
  • Physiocrats
    • Enlightenment thinker and economists
    • They think mercantilism is inefficient
• Adam Smith (1723-1790)
  • Wrote Wealth of Nations
    • Answers the questions:
      • "Is mercantilism efficient?"
      • "What is the goal of economic policy?"
      • "What's the role of self-interest?"
  • Kinda like the granddad of the "right side"
• "The Invisible Hand"
  • Describes a supply and demand curve graph based off of low/high prices v.s. high/low demand
  • There will be a stable amount of stuff bought at a stable price. It happens naturally based off of the natural hand traits:
    • Self-interest
    • Competition
    • Efficient
    • If you have a good share of self-interest and competition, it'll result in an efficient market
    • Government should gtfo - Origin of laissez-faire
• For Consumers
  • Self interest
    • They will choose the best products
• For Businesses
  • Self interest
    • They will MAKE the best products with the most of their ability/utilities
    • They want to sell more and make more money, so even making it addicting is something they will do for it.
• The Role of the Government
  • National Defense
    • Military
  • Resolve disputes
    • Lawyers, court, justice system
  • Provide "public" goods
    • Roads, bridges, anything used to assist in social/marketing purposes
  • Otherwise they gtfo #laissezfaire