Question

1- Identify SIMILARITIES & DIFFERENCES between the classical and mercantilist school of thought?

2- Identify SIMILARITIES & DIFFERENCES between the classical and physiocratic school of thought?

3- Identify SIMILARITIES & DIFFERENCES between the physiocratic and mercantilist school of thought?

Answer 1

Classical School of thought : Market works best when left alone. Best Government is that government which shows least interference in the working of the market.

Mercantilist School of thought: Economic system of trade that existed during 16th to 18th century.

Physiocratic School of thought: Productive work is the source of National wealth

1. Similatities between Classical School of thought and Mercantilist School of thought.

a. Both classical school and mercantilist school saw the importance of economic activities like trade, industry and commerce.

b. Both were of the view that labour of the nation is the real strength of the nation.

Differences between Classical School of thought and Mercantilist School of thought

a. Classical school believed in least interference from Government while Mercantilist School gave ultimate authority to the government.

b. Classical school believed in self development and interest while Mercantilist believed in development of the nation.

2.Similatities between Classical School of thought and Physiocratic School of thought.

a. Both were against government intervention in the work of the economy.

b. Both believed in the concept of private property.

Differences between Classical School of thought and Physiocratic School of thought

a. Classical school gave importance to all labour while physiocrats believed that only the farmers are productive.

b. Classical school believed that if individual will develop, nation will develop without extra effort but physiocratic school thought tax should be levied on land.

3.Similatities between Mercantilist School of thought and Physiocratic School of thought.

a. Both mercantalist and Physiocrats believed that the functioning of the economy can be studied.

Differences between Mercantilist School of thought and Physiocratic School of thought

a. Mercantilist School gave power to the government but Physiocratic School believed in the law of nature.

b. According to Mercantilists trade was the source of income while Agriculture was regarded as source of income by the Physiocrats

c. Mercantalism was well spread in Europe but Physiocrats were rooted in France.