Economic Thought And Practice: Quiz 2/20/14

Front 1

According to Malthus what are the two ‘powers’ that determine general economic well-being, and which is greater? How are these powers expressed mathematically?

Back 1

The power of population and the power of the earths production of substance for man. The power of population is far greater. Population is expressed as a geometrical ratio, earth is expressed as a arithmetical ratio.

Front 2

Malthus. What are the preventive checks on population growth, and how have they been expressed in various times and places—notably England in Malthus’s time?

Back 2

Preventative checks are the potential burdens that come with raising a family. For the poor, fear of not providing; the wealthy, lowering their condition in life. In the rudest state of man, hunting was the only means of growth. In Mal.'s time, these are seen in the labourer who just makes enough for himself thinking of raising a family.

Front 3

Malthus. What “positive” checks on population growth come into play when preventive checks are insufficient?

Back 3

The negative effects (death) on families that rear families but cannot provide for themselves. The poor families.

Front 4

Malthus. What were the effects of the poor-laws on the condition of the poor? Why?
Also, explain how the poor-laws caused the price of provisions to rise.

Back 4

The poor's distresses are not removed but actually made worse. When a man is given money that he did not earn, the quantity of goods that would naturally rise with increased labor do no change. This means that producers will just raise the prices of their goods to leave the poor man spending the same percentage of his money before the poor laws.

Front 5

Malthus. What would be the benefits of eliminating the poor-laws?

Back 5

Men would be induced to marry not based on an illusion of being able to provide but by actually having the means to provide for his family. Causing less damage from "positive" checks. Also, eliminating the poor-laws will give liberty and freedom of action to the peasantry of England.

Front 6

Malthus. What was the rate of population increase in the North American colonies and the early United States? Why was this rate higher than in Europe? (Can you see what Malthus is leaving out in his statistical analysis of North America?)

Back 6

Doubling itself in 25 years. They had plenty of room and food. He seems to be forgetting the process of creating a new civilization from scratch.

Front 7

Malthus. When do epidemics tend to happen?

Back 7

Lack of attention to cleanliness and a crowded population that is cramped together and lacks sufficient food.

Front 8

Malthus. What ultimately determines a country’s population? How might local customs cause some variation in this ultimate population?

Back 8

Country's are populous according to the quantity of human food which they produce. If country's all raised potatoes instead of food that they are accustomed to (corn and rice) they would become more populous.

Front 9

Malthus. What was the problem with Prime Minister William Pitt’s proposed poor-law amendment?

Back 9

It does not increase the produce of a nation in proportion to it's population increase.

Front 10

Malthus. What would be the effect of Godwin’s proposal to replace self-love with benevolence as the moving principle of society?

Back 10

It will cause society to waste their strength of body and mind trying to achieve an impossible goal and will lead to overall distress over the inevitable frequent failures trying to achieve benevolence.

Front 11

Malthus. What would be the practical effects of the rich relating to the poor only by giving them gifts, rather than by employing them? Why?

Back 11

It would cause people to be idle vice ridden because they are gaining more for doing less. It will also lead to diminishing the produce of land for the same reason above.

Front 12

Malthus. What is the proper relationship between benevolence and self-love?

Back 12

Benevolence is to soften the partial evils arising from self-love. It can never be substituted in its place.

Front 13

Mill. In the ‘progress of wealth and industry’, particularly when population is also increasing, what goods tend to decline in value and cost of production, and what goods tend to increase in value and cost of production. Why?

Back 13

The cost and value of production of the fruits of the earth increase because an increase in population increasing the demand for consistent food.
The cost and value of manufactured good falls because the larger the scale on which manufacturing operations are carried on, the more cheaply they can be performed.

Front 14

Mill. In the ‘progress of wealth and industry’, particularly when population is also increasing, do wages, profits, and rents tend to rise or fall? Why? [Note: These are the two large, overarching questions of Book IV, so try to grasp the whole analysis.]

Back 14

Stationary Capital, Rising Population (vice versa)
Wages: fall (rise)
Profits: rise (fall)
Rent: rise (fall)

Front 15

Why does Mill consider whether ‘sinking’ capital into machinery could reduce wages?
Why does Mill say that there is no problem.
(Think: Does Mill’s concern even make sense in the first place?)

Back 15

Because it produces upon the immediate and ultimate interests of the laboring class. There is no problem because the unproductive expenditure of capital does diminish the aggregate amount of the wages fund and is profitable in the long run. Not really, any educated person would have known that machinery pays itself off in the long run.

Front 16

Mill. When long-run developments in capital, profits, and wages and wages eventually lead to a “stationary state,” is this a problem or an opportunity? Explain.

Back 16

It is an opportunity because it promotes growth without being destructive to the nation. It promotes the best state of human nature where no one is poor, no one desires to be richer, nor has any reason to fear being thrust back by the efforts of others to push themselves forward.