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 SchoolA. Laissez-FaireB. Inequality of wealth II.Smith, from An Inquiry into the Nature and Causes of the Wealth of NationsA.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 EssaysA. Nature of wealth B. Mercantile wealth C. National wealth IV.Tawney, The Social Organism from Religion and the Rise of CapitalismA. Traders B. Wealth and labor Current LectureRuskin 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 StoryIn 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 StoryIn 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 isa 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