Luis de Molina (1535-1600)

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Luis de Molina (1535-1600)

• Underlying Molinas social thinking is an
  unwavering beliefshared by many of the early
  Jesuit thinkersin the free choice of the human
  person.
• In essence, the human person, Molina asserts, is
  an active agent of the divine will

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Luis de Molina

• An active agent of the divine will is a concept
  that finds concrete expression in Molinas
  writings on economics, in which he affirms the
  importance of individual liberty in free-market
  exchanges, opposes government regulation of
  prices and markets, condemns the slave trade as
  immoral, and upholds private-property rights
  theory

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Luis de Molina

• Many are the circumstances that cause the price
  of things to move upward or downward. Thus, for
  example, a shortage of goods caused by a bad
  harvest or similar factors provokes a rise in the
  just price. Plenty on the other hand bring it
  down. The number of buyers who come to the market
  is greater at some times than at others, and
  their keener desire to buy also causes a rise in
  prices. Likewise, the greater the need that
  people for some special things at a certain
  moment,

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Luis de Molina

• assuming that the quality of the things is
  unchanged, causes an increase in its price, as
  happens in the case of horses, which are worth
  more when war is is imminent than in times of
  peace. Similarly, lack of money in a place
  causes the price of other things to fall, and the
  abundance of money makes it rise. The less money
  that circulates in a place the more it is worth,
  and therefore, caeteris paribus, with the same
  amount of money we can buy more things

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Martin de Azpilcueta Navarrus (1493-1586)

• Spanish Dominican priest and leading scholar of
  Salamanca. Early expositor of the Quantity
  Theory of Money.
• Goes on to argue that "all merchandise becomes
  dearer when it is in strong demand and short
  supply" , i.e. general scarcity theory of value.

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William Petty

• 1623-1687

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Pettys Main Contribution

• His book Political Arithmetic written in 1676 but
  published in 1690
• He discussed the need to obtain measurements for
  what to day we call macroeconomic and
  demographics variables
• He is considered one of the first economist to
  use statistical methods
• Wrote five book but only one appeared while he
  was alive

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Richard Cantillion

• 1680?-1734
• Essay on the Nature of Commerce in General

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Cantillion

• He was a broker in Paris
• influenced by Francois Quesnay
• He was killed by a servant he discharged who then
  try to burn the house to cover the his
  assassination
• He is best remember not necessarily by his point
  of view but by the topics he considered important
  in the discussion of the economy

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Points Introduced to the Economic Debate

• Tract Population data as integral part of the
  economic process
• Develop and explanation of the location of cities
  
• Distinction between Market Price and Intrinsic
  Price
• Analyze economic flows between major sectors in
  the economy

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Points Introduced to the Economic Debate (Cont.)

• Change in money supply had an impact of the
  economic level
• Private property essential for the development of
  the market

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David Hume (1711-1776) Political Discourses
(1752)

• Overall intellectual with contributions in
  Economics, History, Philosophy, and Politics
• In Economics his understanding of political
  economy lead him to the Equation of exchange
  (along with John Locke)
• MV PQ

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David Hume (1711-1776) Cont.

• HUMES DICTUM What ought to be (normative
  statement) CANNOT be derived from what is
  (positive statement)
• A Continuos Favorable Balance of Trade is
  Impossible to Maintain
• Because as gold Prices while other
  countries would have Balance of Trade so their
  Prices so they would export and we would import

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Bernard Mandeville November 30, 1670 - February
1, 1733

• The Fable of the Bees (1714)
• Believed in INNATE selfishness and lack of
  goodness in humans
• Human Wickedness could only be turned to public
  benefit by skillful politicians

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Bernard Mandeville (cont.)

• VIEW OF LABOR
• Production, not consumption is the goal of the
  society
• advocated large population, child labor, high
  labor force participation and low wages
• IN OTHER WORDS HE BELIEVED IN A DOWNWARD SLOPING
  LABOR SUPPLY CURVE (i.e. wages participation

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Thomas Robert Malthus

• 1766-1834

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BIO

• His father knew David Hume and Jean-Jacques
  Rousseau who apparently spend time with Malthus
  when he was a kid
• He went into the ministry but remained at
  Cambridge with a scholarship until he married (so
  he had to give up the scholarship)
• Known for ONE ESSAY

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Population

• An essay on the Principle of Population as It
  Affects the Future Improvement of Society, with
  Remarks on the Speculations of Mr. Godwin, M.
  Condorcet, and Other Writers 1798 (Anonymous)
• However, after impact of book he put his name on
  it and produced a total of 6 editions and
  concluded then with
• A Summary View of the Principle of Population
  1830

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About the Book

• Disagreed with the optimism that the French
  Revolution had permeated to authors such as
  Godwin and Condorcet
• First edition strictly a theoretical essay
• Later editions attempts to find data to support
  position though does not always succeed

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Main Points

• Two Main Propositions
• Population, when unchecked, increases in a
  geometrical progression of such a nature that it
  doubles itself every twenty five years
• Under even the most favorable circumstances, the
  means of subsistence (i.e. the food supply)
  cannot possibly increase faster than in
  arithmetic progression

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Population Dilemma

• Positive vs. Preventive Checks
• POSITIVE factors increasing the death rate
• War, Famine, Pestilence
• PREVENTIVE factors reducing birth rate
• Contraception, Moral Restrain (Abstinence ),
  Abortion
• Finally, he wrote some on monetary policy but he
  is remembered for his population essay (more
  during the David Ricardo Lecture)