Unit_1 - Classical Theories on Political Economy ISS 315...

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Classical Theories on Political Economy ISS 315
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OUTLINE WHAT IS POLITICAL ECONOMY? CLASSICAL MERCANTILISM CLASSIC LIBERALISM
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What is Political Economy? Economics is the study of the process of providing goods and services to individuals in a society. Political economy seeks to explain how political power shapes the economic outcomes and how economic forces influence political actions.
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Classical Mercantilism The essence of mercantilism is that the economy should serve the political state by maximizing its wealth and power. This type of economy prevailed throughout Europe during the 17th and 18th century. There were two major goals of these societies: Maximize the total wealth of the society. Increase the power of the state.
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Continued… It was assumed that strong state will lead to strong economy. Strong economy will further strengthen the government and this cycle will continue. Mercantilism promoted the following: 1. A nation should build strong army and conquer other nations. 2.
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Unit_1 - Classical Theories on Political Economy ISS 315...

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