Main Theories In Economics: MAIN THEORIES

By MAURICIO ENRIQUE FAU

The "Main Theories" collection analyzes and develops the essential schools of thought in each discipline.

The volumes include summaries of essential texts by key authors and typical exam questions with answers.

 

The present volume covers the central axes of this discipline.
Among them, the reader will find an analysis of the following: Mercantilism, The Psysiocrats, Liberalism: Smith And Ricardo, Keynesianism, among others.

• Language: English
• Publisher: LA BISAGRA STUDY SKILLS
• Release date: Sep 29, 2021
• ISBN: 9798201828851

MAURICIO ENRIQUE FAU

Mauricio Enrique Fau nació en Buenos Aires en 1965. Se recibió de Licenciado en Ciencia Política en la Universidad de Buenos Aires. Cursó también Derecho en la UBA y Periodismo en la Universidad de Morón. Realizó estudios en FLACSO Argentina. Docente de la UBA y AUTOR DE MÁS DE 3.000 RESÚMENES de Psicología, Sociología, Ciencia Política, Antropología, Derecho, Historia, Epistemología, Lógica, Filosofía, Economía, Semiología, Educación y demás disciplinas de las Ciencias Sociales. Desde 2005 dirige La Bisagra Editorial, especializada en técnicas de estudio y materiales que facilitan la transición desde la escuela secundaria a la universidad. Por intermedio de La Bisagra publicó 38 libros. Participa en diversas ferias del libro, entre ellas la Feria Internacional del Libro de Buenos Aires y la FIL Guadalajara.

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Main Theories In Economics

MAIN THEORIES

MAURICIO ENRIQUE FAU

Published by LA BISAGRA STUDY SKILLS, 2021.

MAIN THEORIES IN ECONOMICS

––––––––

MAURICIO FAU

Copyright © 2021 Mauricio Enrique Fau

All rights reserved.

ISBN: 9798722290854

DEDICATION

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To my children Elías, Selva, Greta, Ciro and Yaco.

To my life's daughter Emma.

To my wife Cecilia.

Table of Contents

Title Page

Copyright Page

INTRODUCTION | Contents

Tools

MAIN ECONOMIC THEORIES | MERCANTILISM

Historical conditions for the emergence of mercantilism

Methodology and main ideas

Stages of mercantilism

THE PRE-CLASSICS | WILLIAM PETTY

THE PHYSIOCRATS

The economy: a system of laws

Net proceeds

Division of society into classes

The economic table

CLASSICAL POLITICAL ECONOMY

COMMON ELEMENTS OF CLASSICAL POLITICAL ECONOMY THEORISTS:

LIBERALISM: SMITH AND RICARDO

ADAM SMITH

DAVID RICARDO

Smith, Adam | INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS (1776). | CHAPTER 1  DIVISION OF LABOR

CHAPTER 2  THE PRINCIPLE UNDERLYING THE DIVISION OF LABOR

CHAPTER 3  DIVISION OF LABOR IS LIMITED BY MARKET EXTENSION

CHAPTER 5  OF THE REAL AND NOMINAL PRICE OF GOODS, OR OF THEIR PRICE IN LABOR AND THEIR PRICE IN CURRENCY

CHAPTER 6  ON THE COMPONENT ELEMENTS OF THE PRICE OF GOODS

CHAPTER 7  THE NATURAL PRICE AND MARKET PRICE OF GOODS

CHAPTER 8  LABOR WAGES

CHAPTER 9  OF THE BENEFITS OF CAPITAL

CHAPTER 11  LAND RENT

BOOK FOUR | CHAPTER 2  RESTRICTIONS IMPOSED ON THE INTRODUCTION OF FOREIGN GOODS THAT MAY BE PRODUCED IN THE COUNTRY

Ricardo, David | PRINCIPLES OF POLITICAL ECONOMY AND TAXATION (1817) | CHAPTER 1 | Section 1

Section 2

Section 3

Section 4

Section 5

Section 6

CHAPTER 2

CHAPTER 7

PROTECTIONISM AND NATIONALISM: LIST

THE PRIVATE ECONOMY AND THE NATIONAL ECONOMY | CHAPTER 14  THE PRIVATE ECONOMY AND THE NATIONAL ECONOMY

CHAPTER 15  NATIONALITY AND THE ECONOMY OF THE NATION

CHAPTER 16  THE PEOPLE'S ECONOMY AND THAT OF THE STATE | Political economy and national economy

COMMUNISM: MARX | KARL MARX

Methodology and main ideas

Marx, Karl | CONTRIBUTION TO THE CRITIQUE OF POLITICAL ECONOMY | SECTION ONE  CAPITAL IN GENERAL | CHAPTER 1  THE MERCHANDISE

Historical considerations on commodity analysis.

Marx, Karl | THE CAPITAL | CHAPTER 4  TRANSFORMATION OF MONEY INTO CAPITAL | The general capital formula

Contradictions of the general formula

Purchase and sale of labor force

CHAPTER 14  ABSOLUTE AND RELATIVE SURPLUS VALUE

THE NEOCLASSICALS | MARGINALIST OR NEOCLASSICAL SCHOOL

Methodology and main ideas

Main currents

Marshall, Alfred

ECONOMIC PRINCIPLES | CHAPTER 3  GRADATIONS OF CONSUMER DEMAND

CHAPTER 4  ELASTICITY OF REQUIREMENTS

Menger, Karl

PRINCIPLES OF POLITICAL ECONOMY | CHAPTER 1  THE GENERAL THEORY OF GOOD | On the essence of goods

CHAPTER 2  ECONOMICS AND ECONOMIC WELFARE | 3. The origin of the human economy and of economic goods. | a) Economic assets

b) Non-economic assets

c) Relationship between economic and non-economic goods

d) The laws regulating the economic nature of assets

CHAPTER 3  THE THEORY OF VALUE | 1. On the essence and origin of the value of the goods

2. The most primary measure of the value of assets.

a) Differences in the magnitude of the significance of each of the need satisfactions (subjective element).

b) Dependence between specific needs satisfaction and specific goods (objective element).

c) Influence of the quality of the goods on their value

d) Subjective character of the measure of value. Work and value. Error

KEYNESIANISM

JOHN MAYNARD KEYNES

Keynes, John Maynard | GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY | BOOK III  THE PROPENSITY TO CONSUME | CHAPTER 10  THE MARGINAL PROPENSITY TO CONSUME AND THE MULTIPLIER

I

II

III

IV

V

VI

BOOK IV  THE INCENTIVE TO INVEST | CHAPTER 11  THE MARGINAL EFFICIENCY OF CAPITAL

II

III

IV

V

CHAPTER 13  THE GENERAL THEORY OF THE INTEREST RATE | I

II

III

CHAPTER 18  GENERAL OCCUPANCY THEORY | I

II

III

SOME SAMPLE EXAM QUESTIONS | Explain why there may be a difference between the market price and the natural price of products according to classical economic thought.

What is Say's law and is it applicable to reality? Justify your point of view

Why is surplus value produced according to Marx? What is absolute surplus value and relative surplus value?

Indicate which concept of wealth was considered by the mercantilists. Did Adam Smith share the same vision?

According to your criteria, explain and list the differences between classical economists (Smith, Ricardo and Marx) and neoclassical economists.

What is the commodity that according to Marx has more value than it actually possesses? How does it relate to the production process (surplus value, surplus labor)?

Keynes claimed that he was not a socialist, so why did he care about unemployment? How does he differ from the neoclassicals?

BIBLIOGRAPHY | In all cases, the year of the edition consulted is given, which does not necessarily coincide with the first edition of the work or with the year in which it was written. | BOOKS

ARTICLES

ENCYCLOPEDIAS, DICTIONARIES AND GLOSSARIES

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Further Reading: Main Theories In Sociology

Also By MAURICIO ENRIQUE FAU

About the Author

About the Publisher

INTRODUCTION

Contents

This book is especially designed for all those who want to become familiar with the main theories, fundamental topics and essential authors in economics.

It deals with the essential issues of economic theory, a subject that is studied by all the chairs of the subject.

If the reader wants to go deeper into other topics, such as Macroeconomics and Microeconomics, he/she can consult us for other materials from our editorial collection.

This book is an indispensable reference tool both for high school students who want to learn what is studied in the entrance to the University, as well as for teachers and the general public.

Tools

The book consists of very useful tools, namely:

A general explanation of each school, with the historical context in which it was developed.

A summary of the fundamental chapters of the different authors, selected according to their use in the CBC.

Boxes and synoptic tables

Tables highlighting central concepts

CAPITAL-lowercase system, which allows for double reading (in full or by reading only the text in uppercase).

The biography of the main authors of the discipline

Exercise questions and/or multiple choices, with typical model exams.

A complete bibliography containing the most important texts in the discipline.

The reader also has the opportunity to delve deeper into the meaning of basic terms using our Basic Dictionary Collection.

MERCANTILISM

THE PRECLASSICS

THE PHYSIOCRATS

LIBERALISM: SMITH AND RICARDO

PROTECTIONISM AND NATIONALISM: LIST

COMMUNISM: MARX

THE NEOCLASSICALS

KEYNESIANISM

SOME SAMPLE EXAM QUESTIONS

BIBLIOGRAPHY

MAIN ECONOMIC THEORIES

MERCANTILISM

Mercantilism (Europe , mid-15th to mid-18th century): A set of economic ideas that argued that a country is richer the more precious metals it has. M arose in the context of the disintegration of feudalism , the emergence of national states and the colonial expansion of the European commercial bourgeoisie , in the context of geographical discoveries and the emergence of new sources of raw materials and deposits of gold and silver, which greatly accelerated the expansion of world trade. It was the economic theory of monarchical absolutism . Some characteristics of M: objective of positive balance of trade , non-existence of trade taxes , promotion of the circulation of goods within the territory controlled by an intervening State (no more customs or internal limitations), promotion of exports of goods, encouragement of national production , reduction of imports (by means of various ordinances and levies ) , prohibition of outflow of gold, silver and coins. In mercantile capitalism , the State granted privileges to certain commercial companies for the extraction of precious metals and the commercialization of tropical products. The best known motto of M is " sell high and buy low ". Some authors distinguish between two types of M: bullionism ( bull on metal ) in the 15th and 16th centuries - which identifies metal with wealth - is a reductionist and dogmatic M. It is based on: not importing goods, not importing goods that are not of the highest quality, and not importing goods that are not of the highest quality. It is based on: not importing luxury goods , not exporting precious metals, good administration of the currency , exchange control , etc. In this phase wealth is equivalent to the amount of precious metals that a country treasures, closing as much as possible the outflow of money and taking into account that the origin of profit is in foreign trade . Its formula: D-M-D' (money-mercantile-money-increased money). With the depletion of gold and silver reserves in America, in the 17th century the developed M appears, which abandons the identification of metal-wealth and focuses on obtaining a trade surplus -favorable trade balance- through a protectionist and industrialist policy. Here wealth is achieved and increased through the production of those goods whose export will generate profits in foreign trade ( manufactures ). That is, although foreign trade is maintained as a source of wealth, production appears as a novelty. Its formula: D-M...P...M-D' (money-merchandise-production-merchandise-increased money). The cruder M developed especially in Spain -with a weak bourgeoisie- while the more advanced versions were centered in England and France (the latter with agricultural protectionism ). M went into decline with the emergence of liberal thought, a stage in which capitalism definitively shifted its axis from circulation to commodity production. Among the mercantilist thinkers Jean B. Colbert , Thomas Mun, Antonio Serra and Antoine Montchrétien stand out.

Historical conditions for the emergence of mercantilism

When at the end of the 14th century the English King Richard II asked the merchants of London what he should do to save England from financial collapse, they told him: SELL MORE TO FOREIGNERS THAN WE BUY FROM THEM.

MERCANTILISM DEVELOPED BETWEEN 1450-1750, its MAIN THINKERS being the British Thomas Mun, the Italian Antonio Serra and the French Antoine Montchrétien, and its most developed period was the 17th century.

THE CONTEXT OF ARISING was marked by:

✓  The collapse of feudalism

✓  The emergence of capitalism

✓  The thirst for gold that led to great geographical discoveries

Methodology and main ideas

COMMERCIAL OR MERCANTILE CAPITAL WAS THE FIRST FORM OF CAPITAL. In turn, mercantilism was the first theoretical attempt to understand the capitalist mode of production. Its METHOD was based on EMPIRISM and PRACTICISM, and ITS OBJECT OF INVESTIGATION WAS THE PROCESS OF CIRCULATION.

His CONCEPT OF WEALTH was identified with the QUANTITY OF PRECIOUS METALS existing in a country, plus the amount of subjects or cheap labor (mainly coming from the colonies).

STATE INTERVENTION was central to this trend, in order to ACCUMULATE METALS BY INCREASING EXPORTS AND DECREASING IMPORTS. To this end, the State implemented ordinances and levies.

With these measures, mercantilism managed to increase the amount of money available, which increased the price of goods. Later Hume criticized this aspect of mercantilism with the quantitative theory of money (the more money circulating, the higher prices and vice versa), arguing that a reduction of gold and silver would lower prices which, in turn, would increase exports and decrease imports.

Marx strongly criticized this approach, arguing that it is absurd to believe that commodities come into the circulation process without price and that money comes without value.

Stages of mercantilism

1- INITIAL STAGE OR MONETARY SYSTEM (XV-XVI centuries) ⇨in this phase wealth is equivalent to the amount of precious metals that a country treasures, closing as much as possible the outflow of money and taking into account that the origin of profit is in foreign trade. Its formula: D-M-D' (money-merchandise-increased money).

2- DEVELOPED STAGE OR MANUFACTURING OR COMMERCIAL SYSTEM (late sixteenth century to mid-seventeenth century) here⇨wealth is achieved and increased through the production of those goods whose export will generate profits in foreign trade. That is, although foreign trade is maintained as a source of wealth, production appears as a novelty.

Its formula: D-M...P...M-D'

(money-merchandise-production-commodity-increased money).

In summary, the CORE ASPECTS OF MERCANTILISM are the following:

✓  Favorable balance of trade objective (exports exceeding imports)

✓  State protectionism to promote trade

✓  The importance of Customs in promoting exports and discouraging imports is paramount.

✓  Consequent development of