Show:
The Role of Government
Labor and Mercantilist Policy
Economic Policy
Vocabulary
Miscellaneous
100
What is the function of government according to Smith?
Government should provide for the common defense.
100
What is mercantilism?
Mercantilism: a term that comes from merchants who founded trading companies and formed the policies established by monarchs to promote economic growth by aiding the merchants to corner domestic and international markets. (accepted: monopolistic trading companies control economy)
100
What is "laissez-faire," and what form of this did Smith advocate for?
Laissez-faire: abstention by governments from interfering in the workings of the free market. Smith argued for a system of limited laissez-faire.
100
What is endogenous?
Endogenous: advancements within the workplace
100
Name one of Smith's two most famous written works.
"The Theory of Moral Sentiments" or "An Inquiry Into the Nature and Causes of the Wealth of Nations" (accepted: "Wealth of Nations")
200
What is the role of government for public goods?
The government should provide, maintain and operate certain unprofitable institutions.
200
What is Smith's view of business regulation?
Smith identifies regulation of business enterprises as another tool of mercantilist policy that slowed the growth of wealth and wellbeing.
200
During Smith's time, how was poverty measured?
Poverty was measured by the rate of child mortality.
200
What is exogenous?
Exogenous: advancements outside the workplace
200
Describe the economic policy of Smith's time.
Smith lived with a mercantilist economic policy where the wealthy elites benefitted at public expense.
300
How does the public good operate under the government?
Public goods should be constructed and operated by the government of unprofitable domestic infrastructure institutions on the grounds that they will enable business firms to generate economic activity.
300
What is the nascent theory?
The nascent theory of class conflict, developed and extended significantly by Marx, is based on the fundamental premise that the interests of a business owner are often in opposition to the interests of workers.
300
In Smith's opinion, what type of entrepreneurial function is innovation?
Revolutionary
300
What is invention?
Invention: technological evolution
300
What was Smith's primary concern with the economic system?
Smith was concerned with the welfare of all citizens. The alleviation of the poor was his central priority.
400
What is natural liberty?
Natural liberty: freedom of trade should be restored only by slow gradations, and the private sector is supported by the institutions in the public sector.
400
What is at the center of the economy according to smith?
Human labor is central to the economy.
400
Name at least 5 of the 8 steps within the cycle of innovation
Undertakers save profits, purchase new machinery from investors, installation and operation of new machinery, extraordinary profits, imitation, increase in supply, [decrease in market price, higher demand for labor, higher wages, profits fall back to a normal level], undertakers need to find new innovations to recapture extraordinary profits.
400
Explain Smith's concept of the "invisible hand."
The invisible hand is a metaphor used by Adam Smith to describe unintended social benefits resulting from individual actions.
400
Name at least two short-falls of Smith's ideas.
Smith envisioned small businesses, an adequate supply of labor, a neutral government, and a traditional, simple interpretation of limited laissez-faire.
500
What is the role of philosophers in the government?
Philosophers improve the education of the typical worker enough to spark a renewed increase in endogenous innovation from the workforce.
500
What is productive labor? Name all of the participants in the productive process.
“Productive” labor is the inclusion of all the participants in the productive process from the beginning to finish: inventors, innovators, undertakers and ordinary workers.
500
How, specifically, does competitive capitalism equalize all citizens?
Through innovation, Smith saw competitive capitalism gradually raising the incomes of workers by increasing the demand for labor and limiting the incomes of the rich by forcing them to purchase new machinery.
500
What is "surplus," and how is it necessary to the process of innovation?
Surplus: revenues minus wages. This money can be saved for the purchase of new machinery which, in turn, increases revenues.
500
When, within 3 years before or after, was Smith born?
June 05, 1723 (accepted: 1720-1726)