On Reading Classical Economists

“Classical’ econoimists refer to those thinkers who laid the foundation for modern economic thought. Since the U of Chicago school is full of neo-classical thinkers, I thought it would be good to go back to basics. And because I like to share, here’s a test for you.

All of the quotes below come from either:

A) John Stuart Mill

B) Adam Smith

C) David Ricardo

D) Karl Marx

Answers will follow shortly. See how well you do! Good luck!

1) The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities [ O Krell: IOW, progressive taxation ]

2) Avoidance of taxes is not always the most rational course of action

3) Payment of a tax is not a badge of slavery; rather, it is a badge of liberty

4) The expense of maintaining good roads is, no doubt, beneficial to the whole society, and may, therefore, without any injustice, be defrayed by the general contributions of the whole society. This expense, however, is most immediately and directly beneficial to those who travel or carry goods from one place to another, and to those who consume such goods

5) It is the great multiplication of the productions of all the different arts, in consequence of the division of labor, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people.

6) But the rate of profit does not, like rent and wages, rise with the prosperity and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries that are going fastest to ruin. [ O Krell: seemed particularly apt in view of the level of corporate profits we’re seeing today….]

7) In the face of rising costs, it is advantageous to raise the level of pecuniary recompense to the lowest-paid workers [ O Krell: sounds like an argument for a minimum wage law ]

8) When masters conspire to put a cap on labor’s wages, this is legal. However, should workers combine to put a floor on wages, this would be severely punished under the law.

9) People are generally incapable of rational assessment of both their talent & their chances of success. They overestimate both–as proven by popularity of lotteries

10) People of the same trade seldom meet together, even for purposes of merriment, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

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