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In addition, he argued that human behavior is mainly based on the pursuit of material profits. According to Smith the society could develop only in case of existence of freedom and equality. These rational principles according to Smith could stimulate objective development of society and development of economical relations. His philosophical and moral ideas of course influenced his political economy. Smith's political economy based on freedom of competition and Smith principles of political economy based on the natural needs of developing capitalist society of Great Britain in many respects defined the economical policies of the major 19th century capitalist states.

3. Provide a sense of the historical context and the nature of the main debates in political economy during the first quarter of the 19th Century in Britain and how these debates shaped the complexation of early classical economic thought.

At the beginning of the nineteenth century there still existed no systematic regulations of the economical activities in different countries from the side of governments, as system of the world trade was still developing. The same problems existed in industry nearly in all developed countries of Europe; capitalism was on the final stage of its transformation from feudal relations. Historical traditions of political economy, mainly mercantilism principles and principles of...

Adam Smith in his work "Wealth of nations" wrote that workers suffered more from primitive capitalism than from capitalists. Policies of protectionism and high duties on imported goods were among the central themes of debates in circles of economists and state officials. The most progressive thinkers proposed that protectionism only made national products vulnerable in equal competition so it could not be considered as a right measure. Another important themes of debates were among issuing of paper money, which were opposed by followers of mercantilism who argued that it would only increase inflation. But in the epoch of developing trade relations, paper money could only stimulate development of national economies.
4. Explain how the Real Bill doctrine of money differed from that of the Bullionists during the ealry years of 19th century Britain.

5. Discuss some of the economic and political factors that led to the development and acceptance of Classical Political Economy during the first 50 years after the publication of Smith's Wealth of Nations.

6. Who were the so-called Philosophic Radicals? What were their aims and objective and how did that influence the path of early Political Economy.

History of Economic Thought

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