Honors 102
Key Concepts for Exam 1
Fayazmanesh
Introduction (PowerPoint Presentation)
The relation between philosophy of science and economics
The “Marginal Revolution” and the “Keynesian Revolution”
The relation between history of economics and economic history
The object of economics and the object of physics
Scientific Revolution and Physiocracy (PowerPoint Presentation, handout & Hunt, Ch. 2)
Scientific revolution
Medieval and Copernican astronomy
The three “Laws” of Kepler
Galileo and Aristotle
The four “Laws” of Newton
Mechanistic view of the world
William Harvey and the circulation of blood
Rene Descartes and the Cartesian view of the world
Physiocracy: definition and period
Francois Qeusnay: Relation to Harvey and Descartes
Tableau Economique
Productive class, proprietor class, sterile class, net product
The impact of the Scientific Revolution on the Physiocrats: Analogy, concept of “science,” method of analysis
The concept of surplus
Corn as the value substance
Ancient and Medieval Thought, the Rise of Capitalism and Mercantilism (PowerPoint PresentationEkelund, Ch.2, Hunt, Chs. 1&2)
The economic structure of ancient slave societies
Plato and Aristotle on exchange and money
Quid pro quo and the substance theory of exchange
The economic structure of the feudal society: the manor, the landlord/serf relation, free peasants, the church, production of surplus, the guild system, etc.
Middle Ages: The “Dark Ages” and “Commercial Revolution”
Muslim expansion and its effect on the European economy
Transition from feudalism to capitalism: the growth of long-distance trade, class conflict, the enclosure movement, putting out system, discovery of precious metals
A working definition of capitalism
The rise of nation states: Unification of England, France, Spain, and the Dutch Republic
The symbiotic relation between the central government and the merchant capitalists
Mercantilism: the origin of the term
Mercantilism as a economic theory: wealth, favorable balance of payment, bullionsim, how to increase wealth
Critique of mercantilism, particularly by Hume
William Petty and the Classics (PowerPoint Presentation & handout)
Marx’s definition of “classical political economy”
William Petty’s biography and writings
Method of analysis in Political Arithmetic: Separation of science and morality, empiricism, rationalism, the influence of Francis Bacon, the ant and spider analogy, the influence of Galileo, “the chaotic conception of the whole,” abstraction, and the concept of natural law
Economic content of Political Arithmetic: Land and labor theory of value, rent and surplus value.
Adam Smith (PowerPoint PresentationHunt, Ch. 3)
Adam Smith’s biography and writings
Instructor’s observations about The Wealth of Nations
Smith’s assumptions in The Wealth of Nations: Four stages of history and human nature
“Invisible hand” and the system of natural liberty
The relation between human nature, exchange, and division of labor
Benefits from division of labor
“Universal opulence” or “wealth”
Relation between division of labor and money
Difficulties of barter
Value in exchange, value in use and the neoclassical “paradox of value”
Principles regulating exchangeable value
Real measure of exchangeable value
Three theories of value: labor bestowed, labor commanded and adding up theory of value
Exchange in the “rude state” of society
Exchange in the “civilized society”
Natural and market prices in the “civilized society”
Center of gravity concept of price
Effectual demand
Wage determination in the “original state” and the “civilized society”
Nature of rent
Productive and unproductive labor
Smith’s method of analysis Newton’s physics
Honors 102
Sample Essay Questions
Fayazmanesh
1. Is the object of economics similar to that of physics? If yes, in what sense are they similar? If not, why not?
2. There is some fundamental incongruity between the real market practices in the ancient and medieval world and the views about the market mechanism expressed by the Greek philosophers and the Scholastics. Explain the incongruity.
3. Discuss the methodological impact of the Scientific Revolution on Quesnay’s “Tableau Economique.”
4. Scholars of economic history have discussed at least four forces that might have led to the breakdown of feudalism and the emergence of capitalism. Classify and discuss these forces.
5. By looking at the transition from feudalism to capitalism one can develop a working definition of capitalism. Explain.
6. Discuss the most important methodological aspects of Petty’s Political Arithmetic.
7. Adam Smith had certain presuppositions concerning human nature and stages of history. Define and explain these presuppositions. Also, discuss how these presuppositions influenced his economic theory and method of analysis.
8. Explain the three distinct theories of value found in Smith’s The Wealth of Nations. Are these theories methodologically compatible?
9. Explain the distinction between “natural and market price” in Smith and why the market price may diverge from the natural price. How is Smith’s distinction related to Newton’s physics?