Ricardo and Malthus were two economists in the early 19th Century, who participated in academic discussions...

Ricardo and Malthus were two economists in the early 19th Century, who participated in academic discussions on various subjects. One subject they disagreed on was, the most likely way, the profit rate may go down in a capitalist economy, which would potentially end the growth of the output level within the system. According to Ricardo, the profit squeeze is the most likely way. For Malthus, growth rates are likely to go down because of a demand shortage. How do Ricardo and Malthus describe their views? Compare Ricardian and Malthusian Models described above. Do you think one of these two potential problems, mentioned by Ricardo and Malthus is more critical than the other? Do you think both are critical, or none of them is critical? Explain your answer.

Solutions

Expert Solution

The views of both Ricardo and Malthus are entirely different. Where Ricardo advocates capitalism and Malthus has a more socialistic view.

Ricardo emphasizes on profit maximization and Malthus on increasing the per capita income which will led to the well being of the working classes.

According to Ricardo if two strong nations help each other in exporting those goods which are produced in abundance in each country can help each other. Malthus debate was increase in output will help increase in the population.

Ricardo's theory has a major assumption that capital and labor cannot be moved internationally. Which kills the purpose of being a capitalist country. Capitalist economies are always ready to move capital outside the country to maximize profits;

Capitalist economies focus on profit maximization. These countries are in abundance of cash flow, due to which the interest rates are less compared to the developing countries. As such, these economies try to invest in other developing economies to increase the returns and maximize profits. It will not decrease the profit rates.

There are ideological differences between Ricardo and Malthus. Capitalist society does not provide opportunity for equal distribution of wealth among all the classes of the society. Socialist believe that distribution of wealth is necessary for an economy to grow.

Both the theories are critical one is based on increasing output and returns and the other is focused on how to prevent growth of population so that the output and demand are in place. Profit maximization is important so is population control.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

The United States, as it began its long and successful growth in the early 19th century,...

The United States, as it began its long and successful growth in the early 19th century, consciously promoted domestic production through such activities as tariffs, Clay's American System, and many direct subsidies to railroads, canal companies, farmers (free land) etc. Today we view this blatant example of large scale and extensive import-substitution industrialization as having been very successful. Comment fully on this statement.

Evaluate the argument between Ricardo and Malthus concerning the stability of a market system?. What were...

Evaluate the argument between Ricardo and Malthus concerning the stability of a market system?. What were J. S Mill's views on this issue? How relevant are the views to today's world?

In the 19th century, cavalries were still an import- ant part of the European military complex....

In the 19th century, cavalries were still an import- ant part of the European military complex. While horses have many wonderful qualities, they can be dangerous beasts, especially if poorly treated. The Prussian army kept track of the number of fatal- ities caused by horse kicks to members of 10 of their cavalry regiments over a 20-year time span. If these fatalities occurred independently and with equal probability for each regiment, then the number of deaths by horse kick per...

1. In the 19th Century British trading patterns were countries from distant locations such as North...

1. In the 19th Century British trading patterns were countries from distant locations such as North America, Latin America, Africa and Asia. Today, most British trade patterns are European countries. Examine the causes of the British changing trade pattern with reference to the Gravity Model.

2.Frederich List, an-early 19th-century German economist, is famous for making the so-called “infant industry” argument. He...

2.Frederich List, an-early 19th-century German economist, is famous for making the so-called “infant industry” argument. He wrote:Had the English left everything to itself—'Laissez faire, laissez aller', as the popular economical school recommends—the [German] merchants of the Steelyard would be still carrying on their trade in London, the Belgians would be still manufacturing cloth for the English, England would have still continued to be the sheep-farm of the Hansards, just as Portugal became the vineyard of England, and has remained so...

Unions were tremendously successful in the late 19th and early 20th centuries because many manufacturing workers...

Unions were tremendously successful in the late 19th and early 20th centuries because many manufacturing workers were low-skilled and spent most if not all of their working lives in a single manufacturing plant and with the same company. Today, the American economy is far more knowledge-based. Think about what compensation strategy would prove more effective today: the incentive-based, more knowledgeable worker, or the lower wage-base with more self-service? Based on what approach you choose, how would organized labor be affected?...

What were the main social, political, and economic factors in the early nineteenth century that encouraged...

What were the main social, political, and economic factors in the early nineteenth century that encouraged the massive physical expansion of the United States?

Who were 5 scientists that contributed to the early development of microbiology?

1-) Who were the major proponents of Keynesian Theory? Touch on both the economists and political...

1-) Who were the major proponents of Keynesian Theory? Touch on both the economists and political figures that promoted the theory. (Write two paragraphs) 2-) Was the theory successful at the time? (Write two paragraphs) 3-) Is it still successful today? Why or why not? (Write two paragraphs)

Dependent Sample T-Test Researchers were interested in studying whether seniors who participated in Silver Sneakers had...

Dependent Sample T-Test Researchers were interested in studying whether seniors who participated in Silver Sneakers had a significant weight loss over a 10 week period. Given the above information, answer the questions below (assume a level of significance of .05). State the null and alternate hypotheses. What is the independent variable? What is the dependent variable? Complete the table below: Paired Samples Statistics Mean N Std. Deviation Std. Error Mean Pair 1 preweight Weight before the diet (kg) 72.53 78...

Subjects