Economics

In the 18th/19th Century, economics was a popular subject amongst philosophers such as Nietzsche, Freud, Smith, Ricardo and Malthus. Economics claims to be a science and came about in the anti- enlightenment time. Popper would have argued that this idea was not falsifiable as people would maximise utility.

Kant believed that you don't do to others what you wouldn't like them to do to you.  An idea is the 'train story', where a train driver has the decision weather to brake and kill 100 passengers on the train to save 1 person on the track, or weather to kill that one person to save all of the passengers. The utilitarian way would be to save the passengers and kill the one person on the track.

Adam Smith
His book 'The wealth of nations' tries to describe why one country is richer than another. He also wrote a book on moral philosophy which takes a similar view point as Hume. He believes that some people have more money than sense. He came up with the idea that people are like calculating machines and need to decide what will maximise your pleasure and minimise your pain. The law of 'invented pleasure' where we give money to the poor is damaging them he decided. The hidden hand of the market allows people to be given money without having to work which means they have no intention of finding a job. He believes that by not giving them money they will have to find a job or a way to get money in order to survive. All value comes from trade so we need everyone to be working in order to make money. 

He was a classical economist who believed that money had no affect on people. He thought that instead it was simply a way of keeping track of things. He decided that money must have a value and that gold is just a superstition. 

The moderns on the other hand believed that money does affect people and has a large impact on the real world. If people have money in their pocket they feel good and need it to be there even if it is only £20. 

Ricardo 
Ricardo took an opposite view to Smith as he takes a more of an conventional view. He believed in the spirit of things and that there is no value in a natural object until humans apply conscious effort to it which brings it value. He uses the idea of coal in the ground to explain his theory as in the ground it is worthless, until it is dug up by humans when it can be used. The labour theory of value explains how diamonds are expensive as more labour is put into getting it. Water in England is basically free whereas if you go to the dessert its rare and can be expensive to find as a reservoir needs to be built to get the water to you. Ricardo also came up with the 'Labour theory of value' which was century to Smith and the physiocrats.

Thomas Malthus
Malthus was a economist and had a gloomy outlook on life. He was introspective and believed that gloom took over western civilisation when the French Revolution didn't turn out as well as expected. The 'iron law of population' explained how humans will always starve to death. We are like bacteria and eat everything to the maximum amount but then we are constantly on the brink of starvation. Darwin later on in the century had a similar view to Malthus where he also said that humanity will one day become extinct. When it comes to agricultural you don't know where your food comes from or how to find it. If the food system broke down we would starve to death but this could happen in our life time. The climate change and running out of petrol to import and get the food to us are factors as to why this could happen soon.

He decided that marriage was the answer to preventing people from starving to death as without marriage people didn't have sex. People didn't know about contraception so having babies was common. People in the past had lots of children who went around eating lots of food. In the 19th century the UK and Ireland were nearly driven to extinction but nowadays the birth rate has dropped again. In Victorian Times, women didn't work as they were too busy having babies. However people only had sex when they were married and the men only married women when they owned a farm. This was in the agricultural times when the children could then help out on the farm. Poor people wouldn't have children unless they did so illegally which made the child legitimate but were then seen as gypsies and scum.

The moderns laughed at Malthus and said he was a typical romantic. They said that every mouth brings a pair of hands who can go out to work as a scientist. They can invent things for society which makes up for the large population. In regards to climate change they agreed that people do think mass starvation can happen and to some extent is happening now in third world countries such as Africa.

Karl Marx
Marx was also an economist who's analysis was useful as he came up with the verification and falsification test. He thinks that labour is the only source of value and wages that people are paid will reduce the amount of people wanting a specific job. Profit and need of capitalists wont make anything as there is a fatal floor in this explanation. People grow food and cant afford the agricultural value of it. 

This is known as the 'iron law of wages' where the way a factory works is explained. The owner of the factory takes the profit from its products whereas the labour comes from the workers. The products are produced so that the workers earn less than the overall value of the widget. The workers then take home their money and go to the shop to find that they cannot buy a widget. As the price of a widget is £10 for example however their wages meant they only took home £5 as they cant buy it the product remains unsold. This then means that the owners profit is also reduced so he then reduces the owners wage. The product still doesn't sell so eventually becomes abolished altogether. Wages are always reduced in a system based on profit which is a vicious circle and a crisis of Capitalism.

Marx always tries to find a way to cure the problems whereas Capitalism creates a world of culture. He was also similar to Ricardo in terms of the 'value theory' and followed the Malthusian 'iron law of wages'. This explained the inability of the system to socialise where value leads to crisis and revolution. Essentially a recurring crisis of over production under consumption.

In 1844 Sir Robert Peel created a machine so that the Bank of England could print paper money. Before this time there was no centralised currency at all in the world. Peel nationalised the money supply and lead to the expansion of paper money. The worlds first central bank had money that was determined by the amount of gold. This allowed people to borrow money from the bank which would allow those factory workers to borrow money and buy their widgets. The superstition about gold came from the Greeks who had a weird superstition that came from greek mythology. Whereas the Chinese people valued silver and believed it was worth a lot.

In 1848 Marx lead to the communist manifesto. Where institutions started to break down as there were underlying contradictions. Factory workers were made redundant because the factories collapsed.

In 1849 the Gold Rush started out. This was when gold was discovered for the first time by America and Australia. People started to follow the gold and move to these countries which meant they could then work again. New suppliers of gold kept the supply of money efficient. The thing to question was the fact that Karl Marx decided to stay in London at this time and not go where the money was. 

Keynes
Keynes solved the Marxist problem of not being able to pay by printing more money. This was known as the 'trade cycle' and explained that the wages are low so people could be employed again. But this meant that all wealth from the Industrial Revolution was in danger of being destroyed. 

The great depression of the 1930's was solved by WW2 as men went into the army and allowed women to work in factories. Everyone then stopped worrying about the superstition of gold as now people were able to use money. This was the time when people moved off the gold stone and started to use paper money.

 The 1950's, 1960's and 1970's were the golden age and seen as the retro period. During this time lots of money was printed and there were lots of jobs created. This was seen as the Keynesianism period in time.

Institutions such as the NHS were giving money to people for no reason. Prison was like a place people went to if they couldn't keep a job. It was almost like they had a job in a job as they were used for people to write statistics about. These are also examples of Keynesian ideas. The question arose as to why we couldn't just print more money. The answer to this was inflation and the fact that we could lose the value of money.

Interest Rates
How are interest rates set? The nominal value of government bonds. The more issues, the higher the rate of interest. Ability to issue bonds out all depends on legitimacy. 

How can you abolish employment?
This idea came from the military Keynesian that used taxes as an example. The budget for the military defence is 60 billion a year! A large amount of this money comes into Hampshire because of our military bases we have everywhere. The taxation on products is to try and manipulate people's behaviour. For example cigarette prices are high to try and get people to stop smoking because they cant afford it. Keynes system is to try and control spending so he agrees with the idea of tax. However critics such as Thatcher and Hayak argued that high levels of inflation causes unemployment. This then increases the roll of the state (bureaucratic) and makes them inefficient which means other countries will beat us.

The destruction of profability means that medicine is hard to make profit from. This lead to the collapse of rational expectation due to the NHS giving out medicine for free. Wages are prolonged and this can lead to unemployment as we are not making enough money like other countries do. Immigration is controlled then we would save money this way. The idea of cheap credit lead to the credit crunch and the credit shortage which is possibly why there was a currency collapse in countries like Greece and Ireland.