Markets%26States

Markets%26States - The Market Economy and The States System...

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The Market Economy and The States System Structural Change From Middle Ages How does economy achieve autonomy? Need to be free of arbitrary political acts concerning private property Prices need to move through unconditional exchange to be good indicators of demand Adam Smith - the “bauble thesis” Based on shift in desires of those with power Status marked by men retained in service replaced by desire to acquire movable goods Irony feudal lords help end feudalism Why didn’t this happen earlier? Trade in luxury goods had never died even in the darkest part of the “dark ages” Administered trade -> free trade Lack of a clear idea of property rights (North) Made transaction costs too high Transaction costs drop when technology advances or population rises Better roads, canals, and more people to share information and to meet as buyers and sellers Issue of taxation Advantage of commerce if rulers can see returns to them - tax revenue
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Markets%26States - The Market Economy and The States System...

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