Net Economics #Classical Economists and their work# Economic theory

 Net Economics #Classical Economists and their work# Economic theory Pls follow , like and share Classical economics, also known as classical political economy, is a school of economic thought that emerged in the late 18th and early 19th centuries. It laid the foundation for modern economics and was dominant until the late 19th century. Classical economists focused on understanding the mechanisms of economic growth, production, and distribution of goods and services in market economies significant contributions and the years in which they were active: Adam Smith (1723-1790): Major Work: "The Wealth of Nations" (1776) Contributions: Smith is often referred to as the father of economics. In "The Wealth of Nations," he introduced the concept of the invisible hand, arguing that individuals pursuing their own self-interest in a free market economy unintentionally promote the general welfare. He also discussed the division of labor, productivity, and the role of markets i

Mercantile theory

Mercantile theory 

 Mercantilism was an economic theory prevalent from the 16th to the 18th centuries, emphasizing the importance of a nation's wealth in terms of accumulating precious metals, especially gold and silver. Here are key aspects of the mercantile theory:

  1. Bullionism: Mercantilists believed that a nation's wealth was determined by the amount of precious metals it possessed. The goal was to export more goods than import, ensuring a surplus that could be settled in gold or silver.

  2. Balance of Trade: Mercantilists emphasized maintaining a positive balance of trade, where a nation exports more goods than it imports. This would lead to a flow of gold and silver into the country, increasing its wealth.

  3. Colonialism and Imperialism: Mercantilism often justified colonial expansion as a means to secure valuable resources and markets. Colonies were viewed as sources of raw materials and as captive markets for the mother country's finished goods.

  4. Protectionism: Mercantilist policies included protective tariffs and trade barriers to shield domestic industries from foreign competition. The idea was to promote self-sufficiency and reduce dependence on other nations.

  5. Government Intervention: Mercantilists advocated for strong government involvement in the economy. Governments were expected to regulate and control economic activities to achieve the desired balance of trade and accumulation of wealth.

  6. Navigation Acts: In countries like England, mercantilist policies were implemented through Navigation Acts, which restricted colonial trade to benefit the mother country. These laws aimed to ensure that colonial goods were primarily exported to the mother country.

  7. Mercantile Policies in Practice: Governments stockpiled precious metals, regulated the prices of goods, and often subsidized industries. The emphasis was on building up a strong navy and fostering a favorable trade balance.

  8. Critiques and Decline: Over time, critics argued that the focus on accumulating precious metals was simplistic and that real wealth should be measured by a nation's overall economic productivity. As economic thought evolved, mercantilism gradually gave way to more liberal economic theories, such as classical economics.


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