ECON 334 Lecture Notes - Lecture 3: Market Town, Opportunity Cost, Scottish Enlightenment
24 Jun 2019
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Hayek claims cantillon is the first economist b/c: Cantillon recognizes equivalent approaches of command/control and free market. Land provides matter from which wealth is produced. Labour of man transforms matter to wealth. Economic activity requires productive people, who are dependent on land. Reminiscent of physiocracy school of economic thought emphasizing agriculture and land: of man and society. Distribution of land must necessarily be unequal. Even if distribution is equal initially, eventually people will redistribute unequally: of villages. Labourers must live near the land they"re cultivating, otherwise opportunity cost of time would be wasted in travel. Therefore, villages equipped with farming tools are necessary. Size of village is proportional to the amount of work the land provides. Implicitly discussing maximizing behaviour: of market towns. Market town placed in the center of villages as a consolidated place for exchange of village goods, artisan goods and iron, sale sugar which are only available in larger towns. Villagers congregate in market town on market-days.
