Luxury and Economic Liberty

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  • Created by: becky.65
  • Created on: 30-04-20 10:51

Luxury

Augustine

  • Civilisations morally decline when they reach too high a state of luxury 

Rousseau 

  • Discourse on the Arts and Sciences (1750)
  • Arts and science make us have material abundances which are not good
  • Believed in martial virtues and saw luxuries as weakening people as with more luxuries we move further away from our natural state; naturalistic argument as being able to cope with hunger and thirst make us human

Mandeville 

  • The Grumbling Hive: or, Knaves turn’d honest (1705) + The Fable of the Bees (1714)
  • While luxury is a vice, it is needed for "public benefits"; Lawyers deliberately stir up disputes, doctors are quacks, businessmen are frauds, ministers cheat the king.
  • Being greedy for material comforts is a vice but benefits society as a whole
  • If people learn virtue then people start being unemployed which is disastrous for the economy 
  • A few greedy people produce public benefits
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Luxury

Samuel Johnson 

  • Made similar arguments to Mandeville, but he did not agree that luxury was a vice
  • You do more good for the poor in the long run by not giving them money for charity and spending it on luxuries because otherwise they just stay lazy and they won't learn to work 

Hume 

  • The more luxuries there are, the more sociable men become because of the increased curiosity to learn more and to show off their luxuries and therefore advances society to be more civilised 
  • Taste comes with self-restriction and the less overindulgence, the more search for high tastes 
  • The arts do not enervate the mind and body, rather new industries and luxuries add force to both 
  • Civil defence requires discipline and skill, which both come with refinement, so the people producing luxury goods help to defend their country 
  • Poland has very little luxury and a lot of corruption, whilst England has lots of luxury and less corruption 
  • Therefore, luxury makes us sociable, industrious, curious, skilful and refined 
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Economic Liberty

Turgot 

  • “A Philosophical Review of the Successive Advances of the Human Mind” (1750) 
  • Subscribed to "Physiocrat" theory: land is the true source of all value
  • It only makes sense to tax landowners for revenue because the producers don’t generate any new value, they only output what they input. The only person on the table who yields more than they start with is the landowner
  • The worst thing we do to our merchandisers is tax them because it reduces production, therefore there should be no income tax or VAT 
  • This provides benefits to the economy because you cannot hide land and it is the only true source of value
  • Taxes should not be used to control industry, rather it is more effective to do this via instruction 
  • The first to believe in the importance of price signals, so there was no need for control as prices regulate themselves depending on what the consumers demand 
  • Trade barriers are a terrible idea as competition drives down the price to the lowest acceptable profit 
  • Tariffs and trade barriers restrict foreign competition, therefore the customer ends up paying for this
  • However, there is a matter of degree as the more competitors you have, the more likely one of them is to accept lower profits and undercut you
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Economic Liberty

Smith 

  • Believed in the ‘iron law of wages’; very bleak picture that there is just a class of workers who get paid the absolute minimum for what they are producing 
  • Theory of Moral Sentiments (1759)
    • You see someone suffering and you suffer a bit yourself 
    • Morality based on sympathy and the impartial spectator
    • You see someone judging you for doing something bad and you start judging yourself 
  • The Wealth of Nations (1776)
    • Economic liberalism 
    • Individuals are not self-sufficient, we are social beings 
    • Exchange allows humans to enter into economic liberty without benevolence 
    • Did not believe in the Fable of the Bees
    • Self-interest means there will be greater benefits for the whole of society
    • Money isn't the source of a nation's wealth, but he doesn't agree land is the source of all value either 
    • Capital is the source of society's wealth as the means of production and a circulating wage fund benefit all of society
    • Individual capital is increased only by saving
    • Society's capital is the sum of individual capital and society's capital can only be increased by saving
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Economic Liberty

Smith continued

  • However, society's capital isn't just the sum of capital as the capital needs to not cancel each other out
  • The Invisible Hand
    • The system works better when there is self-love
    • The person who invests in a system is the one who wants it to succeed the most 
    • The produce of industry is just whatever more you yield from it; therefore capitalism is the best system 
    • Because individuals will try and put their capital into the most productive channels it will yield the greatest benefits for society 
    • We have systems of exchange which allow people to benefit from each other so the best way to benefit society is to leave people to invest in what they see best 
    • People promote the public interest even without realising it, sometimes more effectively than when he really intends to promote it 
    • When people are not in it for themselves, they don’t actually end up serving the public because he thinks they are cheats 
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Economic Liberty

D'Holbach 

  • Believed in the Visible Hand - 'Dirigisme'
  • Socialise investment, therefore take from people according to their ability and invest in the public good

Condorcet 

  • The progress of the political and moral sciences should exert the same action upon the motives that direct our sentiments and actions 
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