Let us synthesis the idea....
Technology--->Increases workers productivity ----> Each workers produces more "Rise in wages"----> leads to more technology. (Cycle repeats)
Rizzo told us about several reasons that lead to the IR. Still it is not believe that a massive cause lead to the IR but a process of numerous developments.
- Adams Smith's belief: Institutions, defined as something that is done without the incentive of money that people do together with the objective of giving their lives an improvement, are the main determinants or causes that lead to the economic growth of a country.
- England was a place of freedom and development in the 18th Century.
- Where the government was a lot more tolerant and an open mind to new and innovative ideas which became the land of the IR.
- Most of the countries in Europe didn't had this freedom.
Coordination:
A problem that was seen in several English communities where business did not establish new businesses or shop around some areas since their was not educated people to hire. Therefore, they were families that did not sent their children to school since shops where not hiring them. A problematic cycle
Mercantilism
The Mercantilism lasted until the med 18th Century. In this economic system the government, which was a king, belief that planning and overseeing all economic activity within his nation was his right.
This planning and control over the economy could be describe as:
- No freedom on movment
- High amount of regultions for imports and exports
- Domestic production limited
- A high control over the price system
- Wage control
When the mercantilism ended several things happen. The FP and the SMP were attributed.
There is another belief about how the money was seen. What happen is that people become more ambitious about making money and having money, this initiated a period of the creations of new businesses and to expand the ones that already existed.
Rizzo
-Daniel Gaona
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