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Mercantilism Vs Utilitarianism

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Mercantilists believed money was equal to power, and that wealth was strongly correlated to political or state power. But over all, their entire goal was to advance the country’s interest through regulation. They defined wealth through the country’s supply of precious metals (e.g. gold and silver). All goods needed to be produced in the country itself to be able to decrease imports and increase exports, so that there would be a surplus on the balance of trade. A positive balance of trade was a key player as it insinuates advancements in wealth. B) The Physiocrats concept of wealth was that of commodities. They were the first to state the idea of an economy as a natural integrated system of production, distribution and consumption. As land, …show more content…

Natural prices are prices corresponding to long-term costs, whereas market prices are short-term prices and can deviate from long-term prices. There are two circumstances when market prices do not correspond with its natural prices, in an upward and downward direction. When demand is less than supply, the market price drops below the natural price, this is because of an increased in competition within the group of sellers, which cause the market price to be lower than the natural price. The second circumstance is when demand is more than supply, the market price is obviously higher than the natural price, this is due to the increase in competition with the buyers, since the demand is higher, and the market price increases as …show more content…

Adam Smith identified three different classes in society. The first class is of landlords or landed gentry, the second class is of merchants and manufacturers and the lastly, the class of wage labourers. The class of landlords is very simple to understand, they control and deal with land. The class of merchants and manufacturers also known as capitalist class, they acquire their income through the profit of stocks. According to Smith, “The working class, or the class of wage labourers, makes up the vast majority of the members of a commercial society.” (Paul Alexander Rækstad, 2011, pg 47) They are the people who work for the landlords or merchants/ manufacturers. Whereas, in Quesnay’s eyes, there are also three different classes, which are: the productive class, the class of proprietors and the sterile (or unproductive) class. The people working in the productive class are involved in agriculture. The people working in the proprietor class are those who are an owner of a business or a holder of a property. And lastly, those in the sterile class do not work within the agriculture field. (Iwanami Shoten,

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