Economic history Essay Example | Topics and Well Written Essays - 500 words - 1

Economic history - Essay Example setting up policies like maximizing the use of domestic resources, limiting wages, export subsidies, all aimed at accumulating monetary reserves (Brue & Randy 42). David Hume disagreed with mercantilism on their trade restrictions by stressing that trade restrictions are restriction of innovation, and so these opened avenues for uniform market competition. Physiocrats stressed the importance of agriculture in the economy; he proposed that agriculture is a vital organ in the development of any economy. He suggested an economic environment free of government restrictions when it comes to transactions between two private parties; the only regulations he proposed are those that protects property rights. Since individuals have a natural right to freedom, it should be understood that nature is a self-regulating system and harmonious so human control should never be factored in. Adam smith proposed the idea of artificial stimulation of manufacturing and trade; he made it clear that real wealth of a country not only consist of gold and silver, but also in its houses, lands and consumable goods of all different kinds (Brue & Randy 45). He fueled foreign trade by recognizing that it could explore the overseas markets and largely promote development of production capabilities of the nation and consequently lead to a rise in real wealth owned by a country. He also contributed to the idea of a free market by proposing to the government to reduce and abandon control over foreign trade, and he suggested for the implementation of free trade policies. David Ricardo shed light on the importance of agriculture, by analyzing the importance of diminishing returns. He postulated that a utility is mandatory for exchange values, but does not determine it. He promoted extreme industrial specialization by proposing that a nation should put more efforts on industries in which it is more internationally competitive. Ricardo suggested trade with other countries to obtain goods not produced