The Contribution to Economics of Each of the Following: • Adam Smith • Thomas Malthus • David Ricardo • Karl Marx • Alfred Marshall • John Maynard Keynes • Milton Friedman

2173 Words Jan 30th, 2011 9 Pages
Write an essay describing the contribution to economics of each of the following:
• Adam Smith
• Thomas Malthus
• David Ricardo
• Karl Marx
• Alfred Marshall
• John Maynard Keynes
• Milton Friedman

“Many Economists have tried to establish why the economy performs as it does and want to have a basis for predicting how the economy will perform when circumstances change”. (Nagel, S pg 1 1999) Economists are just people after all, who have lived through different times and experiences in their lives, thus leading to different values and views. George Bernard Shaw once said that “If all economists were laid end to end they would not reach a conclusion”,(cited in Mankin, Taylor 2006) In this essay we will look at what contributions
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(Palmer) He advocated the wages fund theory. The idea behind this theory was that payment to workers in excess of the subsistence level would lead to an increase in the size of the workers families thus causing the worker to be brought down to a subsidence level of existence.(Palmer) This idea dominated for over a century. It was very popular with employers as it allowed them to pay lower wages and to feel justified in doing so. He is linked with the theory of the “Paradox of Thrift” meaning that if people save consumption decreases, leading to over-production. To counteract this problem, he advised the government to spend monies on non-productive areas such as the building of parks in order to create the circulation of money and therefore stimulate demand.(Delaney) Malthusian theories are still relevant today in some areas of the LCD’s (lower developed countries)
Like Malthus, Ricardo too accepted the wages theory and introduced the concept of “economic rent”. The idea behind this rent was “any payment to a factor of production above its supply price”(Delaney) For example during the Napoleonic wars, Europe turned to Britain for its food supply. This created huge demand and it became very profitable to produce food. In order to produce as much food as possible, landowners were now using less fertile land which had not been used before for food production. This increased the demand for

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