Five Modern Economists

Five Modern Economists

The purpose of this research is to provide thumbnail sketches on five premodern economists, and their contributions to economic theory. The economists included are David Hume, Adam Smith, David Ricardo, Karl Marx, and Alfred Marshall.

David Hume was a Scot, who lived from 1711 to 1776. His principal contribution to economics was his criticism of mercantilist principles. Mercantilism was a body of economic thought which developed in the sixteenth and seventeenth centuries. To a great extent, it was concerned with the relationship between the welath of a country, and that country’s balance of international trade (Baxter, 1985). Mercantilists also tended to equate national wealth with a country’s gold bullion stock (Baxter, 1985).

Hume (1752) held two principal disagreements with mercantilist ideas. First, he disagreed, at least in part, with the mercantilist view that low wages were necessary to combat indolence among the working classes. While he thought that moderate taxes might be used appropriately, he thought the excessive taxes proposed by the mercantilists would destroy initiative.

A more important disagreement Hume had with mercantilism concerned the effect of specie accumulation on domestic prices, and international trade balances (Ekelund, and Hebert, 1983). Hume’s quantity of money theory linked chnages in a country’s gold stock (or silver stock) to (1) prices, (2) price changes, and (3) international trade balances, and, in turn, domestic employment levels. The qualtity of money theory demonstrated that the mercantilist preoccupation with specie accumulation would, through relative price changes between countries, lead to significant changes in international trade balances.

Adam Smith was a Scot who lived from 1723 to 1790. One of the many theories with which he is associated in the labor theory of value. The labor theory approach to the analysis of value postulates that value reflects the …

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