Question

1. How do you think John Stuart Mill would view the most recent world-wide financial crisis? In terms of: What are the factors leading to it, what factors should be in place to prevent it happening again, and what should have been done to correct it?  

Answer 1

John Stuart Mill

John Stuart Mill was a British philosopher of 19th century. Also, he holds the posts of economist and political theorist. He wrote so many writings and books. A system of Logic, On Liberty, and Utilitarianism are the main books. In his writings, Of the Tendency of Profits to a Minimum contains so many investigations regarding financial crisis of the economy.

Financial Crisis

Financial crisis means financial assets lose its value immediately due to several reasons. Crisis theory had been laid down by so many economists. In their theory, they put up the reason and after effects of financial crisis.

How do you think John Stuart Mill would view the most recent world-wide financial crisis?

What are the factors leading to it?

According to John Stuart Mill:-

• when a large number of traders as well as merchants recognize that they have an issue in performing their contractual commitments, a financial crisis initiates in the economy.
• the long-run decrease in profit is due to certain restraining activities in economy such as :-
  • Wage depression
  • Rise in exploitation
  • Overproduction
  • Foreign trade
  • Decrease in values of capital stability

What factors should be in place to prevent it happening again?

Philosophical and economical disciplines should be hold together. Limits in a population should be determined and thus development of economy will slow down. This will rise the public goods and will be beneficial to the environment.