The Classical School ECON577 - TEXAS A&M TEXARKANA The...

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TEXAS A&M -TEXARKANAThe Classical School9, 2015
1History of Economic ThoughtNames:Date:19 June 2015Topic:The Classical School1.What Was the Historical Background of the School?,
2This theory strongly negated the mercantilist school, which was being implemented inthe Britain since the sixteenth century. However, it was seen that governments were creatingmany hurdles for different firms that were conducting their business operations in differentmarkets. Resultantly, economy was not progressing according to the anticipated levels becauseof the reduced level of trades due to increased government intervening. For that reason, Smithproposed that free trade and free competition never pampered not hampered by the states, woulddevelop the overall economy. Therefore, he argued that the overall economy could make themost in the conditions where its members will be free to devise their policies according to theirself-interest. Obviously, their core interest was to promote their business, which in return wouldpromote the overall economy. Moreover, this theory also differed from the physiocratic schoolof thought, as the core focus of that particular school was on the promotion and protection ofnatural industries, especially agriculture. Moreover, businesses had suffered a lot in both casesof the previous economic schools, which is why it was imperative for government to let themembers of economies devise their own policies to ensure continuous growth of theireconomies. In addition, governments were also forcing firms to stop their trades with othercountries because of their less friendly relations with each other. As a result, a large portion ofexport industry was sitting idle because of the non-friendly business policies of their states.

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Term
Summer
Professor
Dr.Parson

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