reading review two econ 311

reading review two econ 311 - Reading Review 2 John Stuart...

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Reading Review 2 John Stuart Mill March 24, 2008 Book 3 Ch. 1-3, Book 4 Ch. 4,7 ECON 311 John Stuart Mill clearly had a grasp on economics. His book Principles of Political Economy was the leading economics textbook for 40 years. In reading passages from this book, I had a lot of problems understanding the wording, but what I could grasp was done well and showed that he understood economics more than most. In the first chapter of book three, Mill begins to argue some points that Adam Smith had made. He calls Smith’s assumptions about value obvious, almost as if he was trying to diminish Smith’s work. He goes on to question the way that Smith perceives value. “Things (he says) which have the greatest value in use have often little or no value in exchange; which is true, since that which can be obtained without labour or sacrifice will command no price, however useful or needful it may be. But he proceeds to add, that things which have the greatest value in exchange, as a diamond for example, may have little or no value in use.” “The use of a thing, in political economy, means its capacity to satisfy a desire, or serve a purpose. Diamonds have this capacity in a high degree, and unless they had it, would not bear any price.” (Book 3, Chapter 1.2) Mill makes a good point about the value placed on goods. In Smith’s world, the good that required the most labor had the most value, but things such as precious stones can gain a higher level of value due to scarcity. Mill’s understanding of the value created by scarcity gives him an advantage over Smith. In Chapter two of book three, Mill goes on to further discuss what is required of a good
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This note was uploaded on 04/17/2008 for the course ECON 311 taught by Professor Benesh during the Spring '08 term at Wisc Eau Claire.

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reading review two econ 311 - Reading Review 2 John Stuart...

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