The two primary advocates for the Mercantilist school of thought discussed in class are Bernard Mandeville and Thomas Mun. Mun seems to be the clear advocate of Mercantilism, as he established the main principle of the school, i.e., “the overriding need [for a country]…to pursue a positive balance of trade – that is, to export more than it imports” (T, 25). Mandeville on the other hand, provided a framework in which Mun could eventually operate within. He did this by advocating for a separate worldview from which to view economic activity from. This worldview was to be severed from moral and social worldviews. To this end, Mandeville also argued that self-interest produces socially and economically beneficial outcomes. These views of Mun and
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This claim is the main point of Mandeville’s poem The Grumbling Hive, but what do Post Keynesians think of this argument? To my approximation, their response to this argument is much the same as their response to the argument from Mun. Provided the self-interest is aimed toward increasing the propensity to consume and subsequently the effective demand, then it does seem to provide economically and socially beneficial outcomes. On the other hand, if Mandeville’s idea of self-interest is saving-focused instead of spending-focused, it runs into the Paradox of Thrift. The Paradox of Thrift, which is what Mun’s argument also runs into, states that an increase in saving lowers growth, the rate of profit, and the profit share. Moreover, the self-interest of Mandeville could also play into the Post Keynesian Paradox of Cost, which states that a redistribution from profits to wages increases the profit share. This paradox is in no way obvious, and is at surface wholly counter-intuitive. This makes it easy for a self-interested capitalist to play into, thus reducing their profit and reaching an outcome that is not economically beneficial. Therefore, if the self-interest is meant for saving rather than spending, it does not create beneficial outcomes according to the Post …show more content…
This appears to be the main claim of Mandeville, who believed that such a separation led to more prosperity, as it allowed more individuals to act in self-interested manners. For a modern economist to wholly disagree with this argument is for them to reduce their own field of study to nothing more than a branch of ethics (T, 22-3). Thus, most modern economists seem to agree with Mandeville to an extent. That said, Post-Keynesians, like Institutionalists, see the need for studying social, conventional, and institutional factors (Arestis, 114). This need is considered in Post Keynesian thought because they believe that individual behavior is determined by social, conventional, and institutional factors (Arestis, 114). Therefore, the Post Keynesians seem to agree with Mandeville over the importance of economic analysis, but believe that this analysis should be informed by non-economic and social
This claim is the main point of Mandeville’s poem The Grumbling Hive, but what do Post Keynesians think of this argument? To my approximation, their response to this argument is much the same as their response to the argument from Mun. Provided the self-interest is aimed toward increasing the propensity to consume and subsequently the effective demand, then it does seem to provide economically and socially beneficial outcomes. On the other hand, if Mandeville’s idea of self-interest is saving-focused instead of spending-focused, it runs into the Paradox of Thrift. The Paradox of Thrift, which is what Mun’s argument also runs into, states that an increase in saving lowers growth, the rate of profit, and the profit share. Moreover, the self-interest of Mandeville could also play into the Post Keynesian Paradox of Cost, which states that a redistribution from profits to wages increases the profit share. This paradox is in no way obvious, and is at surface wholly counter-intuitive. This makes it easy for a self-interested capitalist to play into, thus reducing their profit and reaching an outcome that is not economically beneficial. Therefore, if the self-interest is meant for saving rather than spending, it does not create beneficial outcomes according to the Post …show more content…
This appears to be the main claim of Mandeville, who believed that such a separation led to more prosperity, as it allowed more individuals to act in self-interested manners. For a modern economist to wholly disagree with this argument is for them to reduce their own field of study to nothing more than a branch of ethics (T, 22-3). Thus, most modern economists seem to agree with Mandeville to an extent. That said, Post-Keynesians, like Institutionalists, see the need for studying social, conventional, and institutional factors (Arestis, 114). This need is considered in Post Keynesian thought because they believe that individual behavior is determined by social, conventional, and institutional factors (Arestis, 114). Therefore, the Post Keynesians seem to agree with Mandeville over the importance of economic analysis, but believe that this analysis should be informed by non-economic and social