Enlightenment Ideas and Economic Theories in the 18th Century
Enlightenment Ideas
Hope for the Future, Destruction of Inequalities, and Progress of Equality
The Enlightenment ideas present in the first text are hope for the future, destruction of inequalities, progress of equality, and confidence in reason.
According to the text, “hope for the future” is the basis for “destruction of inequalities” and the progress of equality”. Confidence in reason is shown when Condorcet says “the day will come when the Sun will shine on the Earth on only free men who have no other master than their own reason”.
The Pursuit of Happiness
In the second text, the Enlightenment ideas are present in the aim for the happiness that only will be reached by the reason.
According to Holbach, the pursuit of happiness is a necessity because “the aim for the happiness” is the final goal of the Human Being. Also, this happiness cannot be reached through religion, that’s why religion is “only maintained as a custom”.
Economic Theories
Physiocracy
Physiocracy is an economic theory that believes that the wealth of a nation is based solely on the land.
According to Quesnay, “the earth is the sole source of all riches”.
Liberalism
Liberalism is an economic theory that claims that individual work, with the unique goal to obtain the maximum benefit, is the true source of wealth.
According to Adam Smith, “the actual price at which and commodity is commonly sold is called its market price… The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market (supply) and the demand of those are willing to pay the natural price of the commodity (demand).”
Mercantilism
Mercantilism is an economic theory that based the wealth of a country in the trade, accumulation of metal precious, avoiding imports and encouraging exports. The state intervenes in the economy to promote this international trade and encouraging public and private expeditions to expand the colonies in order to obtain raw materials and market to sell the products manufactured in Europe.
Comparison of Physiocracy and Liberalism
Main Difference
The main difference between the Physiocracy and Liberalism is that the Physiocracy believes that the wealth of a nation resides solely in the land while Liberalism believes that the wealth resides in the freedom of market based on the Law of supply and demand.
Main Similarity
The main similarity between Physiocracy and Liberalism is the rejection of state intervention in the economy.
According to the Physiocracy ideologist “let there be complete liberty in commerce” and Adam Smith reflects the same idea when he explained who must rule the economy: “led by an invisible hand to promote an end which was no part of his (state) intervention”.