Bus 1050 1st Edition Lecture 9 Outline of Last Lecture I Chen Huan Chang Laissez Faire Policy from The Economic Principles of Confucius and His School A Laissez Faire B Inequality of wealth II Smith from An Inquiry into the Nature and Causes of the Wealth of Nations A Investing closer to home B Tariffs C Invisible hand Outline of Current Lecture III Ruskin the Veins of Wealth from Unto This Last and Other Essays A Nature of wealth B Mercantile wealth C National wealth IV Tawney The Social Organism from Religion and the Rise of Capitalism A Traders B Wealth and labor Current Lecture Ruskin He was the first person to suggest the idea of public school and retirement plans that were established through the government A What is the Nature of wealth Wealth is measured at the individual level The mercantile economy Wealth is measured at the national level The political economy These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute What makes us rich There needs to be poor people in order for there to be rich people We can t have rich without poor B Sources of riches Men are rich because they have power over the labor of others However there is more than one way to exercise power We need others to help create value and make something productive C Wealth v Riches Wealth is a function of how men treat one antoher There are no set rules that lead to wealth It depends on the moral sign attached to it By just looking at inequalities of wealth you can t see its source In other words you can t see whether it s evil or good The extent of one s power depends on the authority one has over the labor of others This is how people get rich By simply seeing an inequality of wealth you can t tell whether it s just or unjust First Story In the first story there are two men on an island Each man s individual wealth is their mercantile wealth and their wealth combined is their political wealth As time passes one man get sick and asks the healthy man to work on his land while he s sick In the long run the healthy man becomes wealthy become once the sick man gets better the man who never got sick can do as he pleases while the other man works his land as a way to pay him back Ruskin argues this inequality of wealth was established unjustly Second Story In the second story there are three men One produces one product the other produces a second product and the third one takes the products to the two middleman This is because one product depends on the other product Person 1 Person 2 Person 3 The second person person 2 is the only individual who has knowledge about the compete economy He is the merchant Person 1 and person 3 have no knowledge about what each other do Person 3 tells person 1 and 3 that they are having production problems but this is a lie As a result the mercantile wealth of person 3 increases unjustly because he cheats the other two This is an example of inequality of wealth unjustly established and the political economy is constrained as a result The political economy is the combined wealth of the three individuals Profiting off other people s suffering is not good for the nation as a whole Maybe it s more about how we treat each other that determines wealth rather than material goods Tawney A Economic Conditions in Europe 13th 16th century Clogged system where most economic activity was limited to the area In other words they were confined to the European continent There was not that much commercial trade How you got your class designation is different from how we get it now Nowadays class is determined on the amount of wealth you have but back then it was designated by God It was not economic B Traders Traders in the middle class were getting rich because the upper class were buying things off of them The belief used to be that wealth in the hands of a small number of people in the middle class in particular was dangerous Doctrine described society as an organism Society was viewed as a body composed of different members and each must operate properly for the body in order for it not to suffer But there must be a line drawn between upper middle and lower class Crossing classes puts society at risk There was no upward mobility but no downward mobility either This was how the classes were protected According to the schoolmen the most important thing is salvation not economic gains When people get rich it threatens society and the people s salvation so the schoolmen wrote doctrine against it One should not seek more than what is provided for at their station Pecuniary Related to money It was thought that the more you focus on pecuniary interests the more dangerous it become and puts your salvation at risk The most honorable position was labor in between was trade and the most dangerous was finance in terms of salvation Profit cannot be more than the wage of labor but it is for traders with profit The amount of wealth obtained should be a reflection of one s labor