Markets,valuepricesMalthus,Bentham,Senior,andabit文件材料.ppt

* * * * * * * * * * * * * * * * Markets, value prices 15 Malthus, Bentham, Senior, and a bit of J.B. Say Ch 7 8 Plus other ideas Thomas Malthus ---- a minister --- most of his discussion on economics is in political economy and the macroeconomics areasbut he has a few things to contribute in markets and operation of markets MALTHUS DEVELOPS A THEORY OF DIMINISHING RETURNS IN AGRICULTURE – apply more input and total production decreases --- marginal productivity decreases as more input is applied MALTHUS HOLDS A THEORY OF VALUE BASED IN A RUDIMENTARY NOTION OF SUPPLY AND DEMAND – J. S. MILL TAKES THIS UP LATER Value is changed (price) as demand shifts in both cases of supply behavior quantity Price Demand shifts change price Supply Ricardo later countered with the notion that he did indeed consider demand as a determinant of value of goods that are not reproducible – goods whose elasticity of supply is inelastic Value is changed as demand shifts on a fixed supply – non-reproducible good -- Ricardo’s response quantity Price Demand shifts change price Supply JEREMY BENTHAM 1748-1832 We move to the demand side of the market with Bentham A more clear definition of utility is given Concept of marginal utility – change in total utility as we consume more Diminishing marginal utility Parliament should augment the utility of society JEREMY BENTHAM THE UTILITARIAN Bentham is the intellectual leader of what is known as the philosophical radicals of his day --- contemporary of John Stuart Mill The idea of utilitarianism is brought into economic thought and into public policy Bentham had promoted birth control to increase the utility of society – before Malthus’ population thesis Pleasure-pain doctrine (disturbed J.S. Mill) People are motivated by two strong desires: Desire to achieve pleasure Desire to avoid pain If society could measure pleasure and pain, then laws could be created that would result in “the greatest happiness for the greatest number of individual