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Economic Thought and Globalization

The economic thought of the Scholastics

During the medieval period (500-700), a school of economic thought theory (Scholasticism) was developed. This school of thought (also known as the scholastic thinkers) is famous for their approach to philosophy in a number of study areas. St. Aquinas Thomas, a credited scholastic, is widely known for his originality and freethinking and developing alongside other Scholastic thinkers, a philosophical framework tied to classical economic theories. The scholastics argued that market forces predetermined a just price.

The mercantilism

This economic theory (dominant during the late Renaissance and) advocated for full government intervention in market, which later formed the foundation for modern economics. It encouraged maximization of net exports (maintenance of a positive balance of trade) as the only way a government could grow and encouraged money circulation in the economy.

Political and economic philosophy:  Majorly attempts to analyze the political and economic theories in a philosophical perspective. They study economic liberty, laws and justice, role of government in the economy.

Adam smith’s price theory

Smith’s price theory stipulated that, in the short or long run, the forces of demand and supply in the economy determined the relative prices of goods and services in an economy. When demand for a commodity decreased, its price would reduce to attract more consumers and vice versa in case of an increase demand (law of demand) .He, encouraged market competitions and they believed the economy to be controlled by the forces of demand and supply. To smith, everybody when left to pursue self-interest in an economy, in the end leads to economic growth.

Mercantilism advocated government intervention to correct market failure. Adam Smith encouraged a free market system with no government intervention.

The theory of moral sentiment and the wealth of nations

Ideally, this theory concerned ethics history and the moral thinking of his time, and the wealth of nations explores the history of economic and critic of the political economy both published by Adam Smith. The wealth of nations addressed political rulers according to Smith and advocated free market operations as he saw it as an avenue to nurture competition, which in the end could lead to economic growth. Embracing prudence (advocated by the moral sentiments) in market operations was a prerequisite in market operations and so to smith, no contradiction existed between the two documents.