ECOP1001 Lecture Notes - Lecture 6: Economic Liberalism, Longrun, Root Mean Square
13 Aug 2018
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Document Summary
Theory of the rm: based on the theory of pro t maximisation. Capitalism is more than markets but: neoclassical economics considers that markets ensure the most ef cient allocation of economic resources. There are certain underlying assumptions: the desirability of private property, the undesirability of a substantial role for the state. The neoclassical economics narrowed the focus down to a much more formal of individual of economic behaviour and the function of markets away from a marco view that was pushed by classical political economy. Marginal analysis was pushed which emphasises small adjustments such as a consumer would make when deciding what yields the most pleasure. Utility replaces labour as the source of value. Focus of analysis: the behaviour of individuals and competitive markets. There was a disconnect between theory and actual economic conditions. Marx"s dangerous doctrines" did not show capitalism in favourable" terms.
