Classical Economists

Classical Economists

Adam Smith, David Ricardo, Thomas Robert Malthus and John Stuart Mill are the most famous classical economists. Adam Smith was an important spokesman for the Scottish Enlightenment. His father was a lawyer - civil servant and died when he was six months old. At the age of four he was kidnapped by gypsies. He started University studies when he was fourteen and later became a professor of moral philosophy in Glasgow, when he was twenty-eight years old. David Hume was a close friend and colleague.

He introduced him to Charles Townsend who suggested that he teaches his step-son Henry Scott. He would pay him twice what he was making. Smith resigned in the middle of the year. He wanted to return  tuition fees to students but they refused. With his student, Henry Scott, he traveled to many European cities. In Geneva he met Voltaire and in Paris  Benjamin Franklin and François Quesnay. At Smith’s time, Mercantilism was the dominant economic theory.

In “The Wealth of Nations”, Smith argued that the wealth of a nation is the goods available to citizens and that dependents on labor. It was written in such a way that it was understood by the average literate reader and marked the beginning of the Industrial Revolution. It is divided into five books and two volumes. It is considered the first comprehensive work in Economics and that is why Adam Smith is considered the "father of Economics".

Smith was influenced by Physiocrats’ ideas and wanted to dedicate the book to François Quesnay. The full title of the book is "A Survey of the Nature and Causes of the Wealth of Nations". Margaret Thatcher often carried a copy with her. Self-interest and competition can lead to economic prosperity. As the individual is pushed for self-interest, an invisible hand promotes the good of society. By the invisible hand and meant the market mechanism. Competition is helping to reduce prices.

Smith considered another book of his, “The Theory of Moral Emotions”, superior. It contained material from his lectures. Many scholars believe that Smith's two works are contradictory. While one focuses on sympathy, the other is characterized by self-interest. Others view them as complementary because they simply look at different aspects of human nature.

It is a theory of psychology in which people seek the approval and understanding of unbiased external observers. The basis of moral emotions is the mutual sympathy, the ability of someone to understand feelings expressed by others. People have a tendency for self-interest by their nature. Moral consciousness emerges through social relationships. Through social relationships people observe the behavior of others and in this way, they draw conclusions about what ethical behavior is and apply it to themselves.

Physiocrats gave more value to labor than Mercantilists who considered more important the value created in the transaction, where products were sold for much more than they previously were worth. Smith viewed Merchandilism as a conspiracy of industrialists and traders against consumers. He was on  consumers' side. He was very skeptical of businessmen and believed they could plot or use other tricks to raise prices. When the political system is dominated by business people, they will plot against consumers to influence policies and legislation. Their interests are always opposed to those of consumers. There must be great reservation and suspicion about any proposal made by this class.

Where there is great wealth, there is inequality. For the welfare of the few, many are led to poverty. The greed of the rich and the disgust of the poor for work cause it. Due to pauperization, envy and indignation, the poor invade the wealth of the rich who need the protection of laws, law enforcement and judges. When there is not a great deal of wealth there is no need for public administration. Public administration requires submission. As the wealth gap grows, the need for public administration grows and so does freedom. Public administration does not protect wealth but the rich from the poor.

David Ricardo stopped school at the age of fourteen and worked in the Stock Exchange for nearly thirty years where he created a big fortune. He made a lot of money in the Battle of Waterloo by speculating on the outcome. Initially, he gave the impression that the French had won by selling English securities. There was panic and falling prices. Ricardo then bought the securities at degrading prices. He made too much money and after a while retired.

When he was on vacation with his wife, he bought and studied "The wealth of nations". As a result, he wrote many articles that were part of his economic theory. He later acquired a seat in the British Parliament to further promote his views. Ricardo was in favor of slavery abolition and strongly supported the Greek Revolution. His most  important theories are "The labor theory of value" and "The theory of comparative advantage". Marx relied on Ricardo's work in “The Principles of Political Economy and Taxation" to write "The Capital".

Thomas Malthus was a priest and the first professor of political economy in Britain. His father was a Jacobin’s fan and had contacts with Voltaire, Rousseau and David Hume. Malthus was a contemporary of Ricardo. The rivalry between Malthus and Ricardo is historical. Their differences were more in details than in general ideas. Both agreed with Adam Smith's views. Malthus had more conservative views. It is believed that Ricardo had won the debate.

Adam Smith believed that the industrial revolution would bring prosperity, while Malthus argued that a disproportionate increase in population relative to increased production would cause poverty. His theory influenced Darwin in Biology and Spencer in Social Sciences and referred to the struggle for survival, survival of the fittest and natural selection. Malthus was against contraception and advised abstinence and celibacy for the good of humanity. He had three children. His attitude contrasts with that of his father and his associates such as Rousseau.

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