00:01
What realization about economic efficiency occurred in the mid -18th century? how did this influence economic decision -making? in the mid -18th century, if we were to summarize in one word, the realization was the benefits of trade.
00:26
During this time, there were the discovery of new sea routes, which allowed trade to occur between distant places.
00:45
Notably columbus discovered the americas, and therefore this opened the opportunity for trade between two distant areas.
01:09
There was also a shift from feudism to capitalism.
01:23
This led to the formation of the factory system.
01:36
This was a period of renaissance in which people objective, stereotypical trade principles, and they supported the concept of free trade.
01:59
The start of the colonies in mid -east asia by europeans led to an economic boom in european countries.
02:14
Now let's look at these historical economists.
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Adam smith is the founder of modern economics.
02:33
He supported the lazy's fair, approach.
02:41
Lazy's fair means free market or leave it alone.
02:49
This is the idea that we shouldn't have government intervention and we should just let market forces dictate how the market operates.
02:59
Adam smith was the author of the wealth of nations and he also coined the concept of gdp and also the idea that individuals in the economy should act in their own.
03:33
Self -interest, which would then lead to the best outcome for the interest of society as a whole.
03:52
Now let's talk about thomas malthus.
04:00
So malthus came up with the idea that if the human population grows unchecked, then there will be not enough living space and food for everybody.
04:31
So he introduced this darwinian idea in his essay on the principle of population.
05:02
Essentially, people have to produce more offspring than can survive, and the population is growing faster than the earth can support.
05:14
Essentially, we are all participating in survival of the fittest when it comes to living space and food.
05:30
Next, we have david, david ricardo is a classical economist as well as a politician.
06:03
So he wrote the book principles of political economy and taxation.
06:37
In this book, he detailed the series of comparative advantage, which states that nations can gain through international trade when they focus on producing goods with the lowest opportunity costs compared to other nations...