Capitalist System

1097 Words 5 Pages
As the capitalist system came to fruition, the early classical economists of this time developed categories to analyze this system. Thomas Robert Malthus’ An Essay on the Principle of Population (1798), Adam Smith’s The Wealth of Nations, and David Ricardo’s On the Principles of Political Economy and Taxation attempt to explain the newly integrated world while criticising the mercantilist ideas that the European countries had adopted during this period of time. The contrast between mercantilism and classical economists focuses on wealth being tied to gold vs. exchanging goods of value through trade. These early economists were aware of the negative externalities of that the trade system had introduced into the lives of working people, but often …show more content…
Malthus describes that malnutrition ran rampant in the countryside as “sons of labourers are ... stunted in their growth and … Boys that you would guess to be fourteen or fifteen are, upon inquiry, frequently found to be eighteen or nineteen” (Medema 203). Laws in England were instituted to redistribute wealth from the rich to the poor to “remedy the frequent distress of the common people” (Medema 204). Malthus does not agree with intervention as he believes the redistribution of money to raise one class would depress the others by the same amount. He “[feels] no doubt whatever that the parish laws of England have contributed to raise the price of provisions and to lower the real price of labour. They have therefore contributed to impoverish that class of people whose only possession is their labour” (Medema 206). Although Malthus sees the hardships for the poor as justified, he does believe that the society as a whole can alleviate the problem through abolishment of parish laws and premiums for turning up fresh land. A movement towards the “freedom” of the lower class would encourage labors of agriculture over “institutions relating to corporations” (Medema 206). After reading and analyzing Malthus’ essay, I believe he failed to see human’s exceptional skill of adapting to situations as we have been able to sustain our …show more content…
There were three main contributors towards the improvement: The first is that when people spend their whole workdays only creating one product they become very good at it. The second being, there is no loss in time from switching tasks, either mental or physical, as you only do one task and hand production to the next individual. And the third is that individuals often develop more efficient techniques to their work of production, ones that would not have been discovered without separation of work. Division of labor, in turn, makes the society more well off as they are producing more goods all together. But the richer society can only take place in a large population, where a demand for specialized services is abundant. This increased production capacity does allow individuals to acquire a variety of goods without producing everything on their own, but comes with consequences and externalities to the working

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