Question

According to the table of contents of the Heilbroner book entitled "The Wordly Philosophers: The Lives, the Times, and Ideas of the Great Economic Thinkers", the chapter covering Adam Smith is called "The Wonderful World of Adam Smith", and the following chapter is called "The Gloomy World of Parson Malthus and David Ricardo". Those adjectives pertain to the content of the works by those economic philosophers. Explain why Heilbroner might have chosen those titles.

2. All of the economic thinkers that we have covered so far, including the mercantilists, the physiocrats, Adam Smith, Malthus, and Ricardo, have dealt with the topic of international trade as well as international trade policy. With the exception of Malthus, discuss the evolution of their ideas regarding those topics. You should mention their ideological leanings as well as the substance of their views. Do not forget to mention their policy recommendations.

Answer 1

1. Adam Smith had challenged mercantalist theory that International trade is a zero sum game. In this theory the mercantalists used to believe that exporting country only benefits and importing only suffers as gold(at that time prominent commodity) used to come to exporter.

They had there own version that gold will adjust itself but trade argely remains zero sum game.

Adam Smith in his book :The wealth Of nations" in 1776 proposed and showed the mathematical model in which trade was a positive sum game.

Smith was also proponent of free trade and advised countries not to put barriers and hoped that international trade will create a better world. In short he was hopeful about the world and his theory was romantic and hence the title" "The Wonderful World of Adam Smith" .

However, Malthus theory had predicted gloomy picture for earths residents by stating that food production to increase in algebric progression and population to increase by geometric progression will create famines and hence positive and preventive checks are necessary. Hence he was a bit pessimistic.

Ricardo had proposed even when a country has comparative advantage and has less opportunity cost trade is still possible. However, It had neglected the poor condition of less developed countries. Hence we can say that as compared to Adam Smith there theories mainly talked about problems.