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Updated: Monday April 29, 2002:
You must learn about all of the people listed below,
especially the people with an asterix * by their name.

Until further notice, for the final exam,
based on class lectures and Fusfeld,
be able to write a few paragraphs on the
lives of the people listed below with
emphasis on explaining their key ideas
(Briefly: When and where they lived, their
upbringing and the general historical background.
In depth: show a thorough understanding of their
ideas and tie it to the historical background/significance).

You must learn about all of the people listed below,
especially the people with an asterix * by their name.

Also, check the web page every few days or so
for further updates on what to focus on for the final.

 IN FUSFELD, FOCUS ON THESE LIVES
 

þ THOMAS HOBBES

þ JOHN LOCKE *

þ JEAN-BAPTIST COLBERT *

þ FRANCOIS QUESNAY *

þ ADAM SMITH *
 
 
 

þ DAVID RICARDO *

þ THOMAS ROBERT MALTHUS *

þ JEREMY BENTHAM *

þ ROBERT OWEN

þ JOHN STUART MILL *
 
 
 

þ KARL MARX *

þ VLADIMIR I. LENIN

þ JOSEPH STALIN *

þ HERBERT SPENCER *

þ JUSTICE STEPHEN J. FIELD *
 
 
 
 
 
 
 
 
 
 
 
 
 

8
 IN FUSFELD, FOCUS ON THESE LIVES
 
 
 

þ ANDREW CARNEGIE

þ THORSTEIN VEBLEN *

þ POPE LEO XIII

þ THE FABIAN SOCIALISTS

þ MARY WOLLSTONECRAFT
 
 

þ JANE ADDAMS

þ AYN RAND

þ JOHN MAYNARD KEYNES *

þ JOHN KENNETH GALBRAITH *
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



The following are outlines that you may find useful:

FUSFELD CH 2
 FROM A LOCAL TO A NATIONAL ECONOMY

þ NATIONAL POWER HAD TO BE BUILT FROM THE LOCALISM
  OF THE MIDDLE AGES.

þ FOR THE ECONOMY, IT MEANT:

     þ UNIFIED MONETARY SYSTEM & COINAGE;
     þ NATIONAL SYSTEM OF WEIGHTS & MEASURES;
     þ ELIMINATION OF TOLLS ON ROADS & RIVERS;
     þ NATIONAL SYSTEM OF TAXES & TARIFFS.
 

þ THESE INSTITUTIONS SLOWLY FORGED BY NATIONAL
  RULERS AGAINST OPPOSITION OF FEUDAL LORDS, WHO
  TRIED TO KEEP CONTROL OVER THE ECONOMY OF THEIR
  REGIONS.
 

þ IN THEIR BATTLE FOR CENTRALIZATION, MONARCHS
FOUND THESE ALLIES:

     þ RISING TOWNS AND CITIES -- THEIR MERCHANTS
       WOULD BENEFIT FROM WIDENING TRADE MADE
       POSSIBLE BY ABOLISHING LOCAL TRADE BARRIERS.

     þ THESE MERCHANTS HELPED TO FINANCE THE KING'S
       ARMY, NEEDED TO SUBORDINATE THE NOBILITY.
 

þ ALSO BOTH MONARCH & MERCHANTS BENEFITTED FROM
EXPANDED FOREIGN TRADE.
 

þ STATE GAINED FROM:

     þ TARIFF REVENUES;
     þ SALE OF TRADE MONOPOLIES;
     þ DEVELOPMENT OF STRATEGIC MILITARY INDUSTRIES
       --> SHIPBUILDING AND SHIP SUPPLIES, SAILORS,
       CAPTAINS & FROM GENERAL ECONOMIC GROWTH.
 
 
 
 
 
 
 
 
 
 
 
 

2
 FROM A LOCAL TO A NATIONAL ECONOMY [C]
 

þ SMALL LANDOWNERS ALSO ALLIED WITH MONARCH --
STATE WAS A COUNTERWGT TO POWER OF THE BARONS.

     þ INTERESTED IN COMMERCIAL AGRICULTURE -- NOT
BARONIAL WARS.

     þ WANTED MONARCH TO MAINTAIN INTERNAL ORDER,
THEREBY PROMOTING INTERNAL COMMERCE.
 

þ IN SUM, THERE WAS A POLITICAL & ECONOMIC ALLIANCE
BETWEEN THESE GROUPS:

     þ CROWN
     þ MERCHANTS
     þ RURAL GENTRY
     þ PROFESSIONAL PEOPLE [LAWYERS, BUREAUCRATS]
 
 

þ THE POLICY THAT EMERGED WAS MERCANTILISM:

     þ DEVELOPED MILITARY & NAVAL STRENGTH;

     þ INCREASED NATIONAL WEALTH THRU DOMESTIC
          PRODUCTION & FOREIGN TRADE;

     þ MFG'G ENCOURAGED THRU SUBSIDIES, SPECIAL
       PRIVELEDGES, PATENTS, MONOPOLIES;

     þ FOREIGN TRADE STIMULATED THRU COLONIES &
       HOLDING WAGES DOWN;

     þ FOREIGN TRADE REGULATED THRU TARIFFS,
       NAVIGATION LAWS, TRADE RESTRICTIONS;

     þ AGRICULTURE FOSTERED IN ENGLAND BY TARIFFS
       ON IMPORTS;

     þ MUNITIONS INDUSTRY STIMULATED -- GUNS,
       GUNPOWDER, SHIPS, SHIP SUPPLIES.
 
 
 
 
 
 
 
 
 

3
 MONETARY POLICY OF THE MERCANTILISTS

þ IN ENGLAND, MUCH EMPHASIS ON EXPANSION OF MONEY
  SUPPLY AS STIMULUS TO ECONOMIC GROWTH.

þ BARRIER TO ECONOMIC GROWTH = LACK OF HARD CASH
  FOR CONSUMERS AND OF CREDIT FOR BUSINESS. RULERS
  ALSO NEEDED TO BORROW, WOULD BENEFIT FROM CASH
  AND LOW INTEREST RATES.

þ MODERN BANKING IN ITS INFANCY.
 

þ AVAILABILITY OF MONEY & CREDIT --> GOLD & SILVER
  COIN.

þ MERCANTILISTS FAVORED EASY MONEY --> PLENTY OF
  AVAILABLE CASH TO STIMULATE TRADE & KEEP INTEREST
  RATES DOWN.

þ BUT HAD TO KEEP INFLATIONARY PRESSURES IN CHECK.
  WHY?

     þ RISING PRICES --> WORKERS REBEL.

     þ RISING PRICES --> REDUCES FOREIGN DEMAND FOR
       DOMESTIC MFGS --> EXPORTS DECREASE -->

     IMPORTS INCREASE --> EXPORT OF GOLD & SILVER
      --> MONEY SUPPLY AT HOME REDUCED -->
      DOMESTIC ECONOMY SLOWS.

þ ACCORDINGLY, MERCANTILISTS ENCOURAGED FAVORABLE
  BAL OF TRADE --> EXPORTS >> IMPORTS -->
STIMULATED ECON GROWTH AT HOME.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4

 HIGHLY REGULATED FRENCH INDUSTRY VS. UNREGULATED
     ENGLISH --> ADVANTAGE TO GB
 

þ IN FRANCE, STRESS ON MAKING LUXURY PRODUCTS FOR
  EXPORT -- SILKS, LINENS, TAPESTRIES, FURNITURE,
  WINE.

þ FR. STRESSED CLOSE REGULATION OF QUALITY OF
  GOODS.
 

þ UNDER JEAN-BAPTIST COLBERT [1619-83], NATIONAL
  GUILDS SET UP TO REGULATE MAJOR INDUSTRIES.

     þ ONLY CRAFTSMEN WHO WERE GUILD MEMBERS COULD
       OPERATE, SUBJECT TO REGS OF NATIONAL
       ORGANIZATION.

     þ ROYAL POWER ENFORCES GUILDS, ACTIVE TILL FR
       REV.
 
 
 

þ IN ENGLAND, REGULATION OF DOMESTIC INDUSTRY WEAK
  BECAUSE GOVN SHORT OF MONEY, NEVER STRONG ENOUGH
  TO ENFORCE REGS.
 

þ MEDIEVAL GUILDS DISINTEGRATED, ESP. WHEN CLOTH
  PRODUCTION DEVELOPED IN RURAL AREAS.
 

þ ENGLISH INDUSTRY FREE OF RESTRICTIONS.
 

þ ABSENCE OF GUILDS & GUILD REGS GAVE ENGLISH
  INDUSTRY BIG HEAD START IN INDUST REV. OVER FR. &
  OTHER CONTINENTAL COUNTRIES THAT HAD COPIED FR.
 
 
 
 
 
 
 
 
 
 
 
 

5
 PHILOSOPHY OF THE MERCANTILISTS

þ WEALTH PRODUCED BY HUMAN EFFORT.

þ BUT WEALTH NOT REALIZED UNTIL THERE WAS TRADE &
  COMMERCE --> UNTIL EXCHANGE OF GOODS ENABLED
  PRODUCERS TO MAKE A PROFIT.

þ THUS, MERCANTILISTS STRESSED GROWTH OF COMMERCE
  AS KEY TO INCREASED NATIONAL WEALTH.

þ THEY ALSO STRESSED EXPANSION OF MONEY SUPPLY AS
  KEY TO INCREASED TRADE.

þ WHAT IS SOURCE OF WEALTH? MERCANTILIST -->
  COMMERCE!

þ MOST POWERFUL NATIONS OF 16TH & 17TH C. -->
THOSE WITH OVERSEAS TRADE.

þ TRADE STIMULATED BOTH AGRI & MFGG, BRINGING
  PROSPERITY TO ENTIRE NATION.
 
 

 OPPOSITION TO MERCANTILISM

þ MERCANTILIST POLICIES FINE FOR GREAT MERCHANTS &
  FINANCIERS OPERATING IN INTERNATIONAL ECONOMY.

þ BUT RISING AGRI & INDUSTRIAL INTERESTS FIND
  MERCANTILISM NOT ALWAYS IN THEIR BEST INTEREST.

     þ SMALL BUSINESSES HEMMED IN BY MONOPOLISTIC
       PRIVELEDGES GRANTED TO FEW BIG TRADING
       COMPANIES.

     þ SMALL BUSINESSES & SMALL FARMERS RESENTED
       TAXES FOR MAINTAINING A NATIONAL POWER ALIEN
       TO THEIR INDIVIDUAL INTERESTS.
 
 
 
 
 
 
 
 
 
 
 
 

6
 OPPOSITION TO MERCANTILISM
 

þ EXAMPLE: ENGLISH TAX COLONISTS TO PREVENT THEM
  FROM SETTLING WEST OF ALLEGHENIES IN 1763. BR
  GOVN WAS FAVORING INTERESTS OF HUDSON BAY CO.

þ AMERICAN COLONIES WERE STRIKING EX OF OPPOSITION
  TO MERCANTILIST POLICIES.

þ IN EUROPE, THEORETICAL DEBATE: ECONOMIC GROWTH
  BEST ACHIEVED THRU GOVN DIRECTION & REGULATION?
  OR BY A FREE ECONOMY UNHAMPERED BY DIRECTING
  FORCE OF MERCANTILIST GOVERNMENT?

þ FRANCE HAMPERED BY ALL SORTS OF REGS:

     þ DETAILED GOV REGS ON PRODUCTION -- SPECIFIED
       THREADS/INCH IN CLOTH MFG/

     þ NUMEROUS TOLLS & TAXES

     þ STRICT REG OF IMPORTS/EXPORTS

     þ NOBILITY EXEMPT FROM TAXATION

     þ MAJOR TAXES ON PEASANTS & INDEP FARMERS.
 

þ FR. GOVN INSPECTOR, VINCENT DE GOURNAY [1712-
1759], DISENCHANTED WITH GOVN REGS, ORIGINATED THE
PHRASE LAISSEZ-FAIRE, LAISSEZ PASSER ="FREE
ENTERPRISE, FREE TRADE."
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7
 THE PHYSIOCRATS

þ FRANCOIS QUESNAY --> ALL WEALTH FROM AGRICULTURE
  --> FARMERS PAY RENT, WAGES, PURCHASES -->
  SUPPORTS ALL SOCIAL CLASSES.

þ REG OF INDUSTRY & TRADE IMPEDED ECONOMIC
  DEVELOPMENT BY HINDERING FLOW OF COMMODITIES &
  INCOME.

þ ALL TAXES SHOULD BE PAID BY LANDOWNERS, NOT
  FARMERS. WHY? LANDOWNERS NOT PRODUCTIVE. THEIR
  LUXURIOUS WAYS DISTORTED FLOW OF INCOME.

þ PHYSIOCRATS --> INFLUENCED JEFFERSON & LINCOLN IN
  THE U.S.
 
 

 ECONOMIC LIBERALS

þ ADAM SMITH SYSTEMATIZED ECONOMIC LIBERALISM.

þ EARLIEST LIBERALS ATTACKED RESTRICTIONS ON
  INTERNATIONAL TRADE & ADVOCATED AN END TO
  TARIFFS, MONOPOLIES, REGS.

þ THEIR ARGUMENT: INDIVIDUAL SELFISH MOTIVES -->
  PRODUCED BENEFITS TO SOCIETY.

þ FIRST ECONOMIC LIBERAL IN ENGLAND = DUDLEY NORTH
  [1641-91]. WROTE DISCOURSE ON TRADE [1691].

     þ STRONG CASE FOR FREE TRADE.
     þ SAID FAVORABLE BAL OF TRADE NOT NEC.
       DESIRABLE.

     þ TRADE GOOD BECAUSE:

          þ ADV TO BOTH PARTIES.
          þ PROMOTES DIV OF LABOR, SPECIALIZATION,
            INCREASED WEALTH.
          þ REG RESTRICTED TRADE, REDUCED REAL
               WEALTH/
 
 
 
 
 
 
 
 

8
 ECONOMIC LIBERALS [C]
 

 DAVID HUME [1711-1776]

þ ECON PROCESS WOULD CAUSE FAVORABLE BAL OF TRADE
 TO DISAPPEAR.

þ MANY EXPORTS --> INFLOW OF GOLD & SILVER -->
  MONEY SUPPLY UP --> PRICES RISE --> DECLINE IN
  EXPORTS.

     þ IMPOSSIBLE TO MAINTAIN FAV BAL OF TRADE.
 

þ LOGIC OF NORTH & HUME DESTROYED ARGUMENT FOR REG
  OF FOREIGN TRADE.
 
 

 BERNARD DE MANDEVILLE [1670-1733]

þ DUTCH DOCTOR, IMMIGRATED TO ENGLAND.

þ FABLE OF THE BEES  1704

þ ADVANCES IN CIVILIZATION --> DUE TO VICES, NOT
  VIRTUES.

þ PROGRESS CAME FROM SELFISH INDIVIDUALS --> DESIRE
  FOR EASE, COMFORT, LUXURY, PLEASURE.

þ PROGRESS NOT FROM DESIRE TO WORK HARD & SAVE  OR
  FROM BENEVOLENT CONCERN FOR OTHERS.

þ HOW TO ACHIEVE PROSPERITY? GIVE FREE PLAY TO
  SELFISH MOTIVES OF INDIVIDUAL, LIMITED ONLY BY
  JUSTICE.

þ VICE OF SELFISHNESS --> SPURS PEOPLE TO MAXIMIZE
  THEIR GAINS, THEREBY ADD TO NATION'S WEALTH.
 
 
 
 
 
 
 
 
 
 
 

9
 ECONOMIC LIBERALS [C]

þ IN SUM, WEALTH STEMS NOT FROM VIRTUE BUT FROM
  VICE.

þ SELFISHNESS CREATES MKT --> DESIRE FOR EASE,
  COMFORT, LUXURY.

þ SELFISHNESS SUPPLIES MKT --> SPURS PEOPLE TO MAX
GAINS BY SUPPLYING MKT.

þ THESE SELFISH MOTIVES LAUDED BY MANDEVILLE BECAME
THE BASIS OF ECONOMIC LIBERALISM.

     þ RATIONAL SELF INTEREST
     þ COMPETITIVE MKT FORCES
     þ LEAD TO SOCIAL BENEFITS
 
 

 RICHARD CONTILLON IN 1720S WROTE AN ESSAY ON THE
NATURE OF COMMERCE IN GENERAL.

þ THINKING ABOUT ECONOMIC ORDER IN AN
INDIVIDUALISTIC SOCIETY.

þ RATIONAL SELF-INTEREST ON PART OF TRADERS
OPERATING IN COMPETITIVE MKTS LEAD TO COMPATIBLE
PRICES & QUANTITIES TRADED.

þ ECONOMIC LIBERALS --> SOURCE OF WEALTH NOT
COMMERCE NOR AGRICULTURE, BUT HUMAN LABOR.

     þ ALL NATURAL PRODUCTS MUST BE TRANSFORMED BY
       HUMAN EFFORT BEFORE THEY CAN SATISFY HUMAN
       WANTS.

     þ WITHOUT HUMAN EFFORT, NATURAL PRODUCTS
       WORTHLESS.

     þ THIS IS CALLED THE LABOR THEORY OF VALUE.

þ GREATER INCENTIVE TO WORK --> THE GREATER THE
  PRODUCTION OF WEALTH --> FASTER MOVEMENT TO
  ABUNDANT SOCIETY.
 
 
 
 
 
 
 
 

10
 ECONOMIC LIBERALS [C]
 

 JOHN LOCKE [1632-1704], KEY ENGLISH PHILOSOPHER
  OF CLASSICAL LIBERALISM

þ OVERVIEW OF 17TH CENTURY ENGLAND

þ THOMAS HOBBES [1588-1650] LEVIATHAN

     þ PHILOSOPHER OF ABSOLUTE MONARCHY

þ LOCKE'S SECOND TREATISE ON GOVERNMENT [1690]

     þ STATE OF NATURE

     þ PURPOSE OF GOVERNMENT

          þ PROTECT PERSONS
          þ PROTECT PROPERTY

     þ LABOR THEORY OF VALUE

     þ BY ADDING LABOR TO NATURAL RESOURCES, PEOPLE
       ADDED PART OF THEMSELVES TO FINAL PRODUCT,
       MAKING THE PRODUCT THEIRS TO USE OR CONSUME.

     þ LABOR --> PRODUCTION OF WEALTH

     þ PRIVATE PROPERTY --> CORNERSTONE
               OF LIBERAL IDEOLOGY.

     þ ABSOLUTE VS. LIMITED GOVERNMENT.

     þ ULTIMATE SOVEREIGNTY RESTS WITH THE PEOPLE

     þ PHILOSOPHER OF THE RISING BOURGEOIS CLASS.

þ LATER ECONOMIC LIBERALS SAID FIRST REQUISITE FOR
NATIONAL ECONOMIC GROWTH WAS PROTECTION OF PRIVATE
PROPERTY:

     þ FOR UNLESS RIGHT TO PROPERTY SUSTAINED,
       INCENTIVE TO WORK REDUCED, PRODUCTION OF
       WEALTH DECREASED.
 
 
 
 
 
 
 
 

11

 TURKISH VS. ENGLISH VIEWS ON PRIVATE PROPERTY
 

þ IN ANCIENT TIMES, TURKISH DOMAIN WEALTHIEST IN
WORLD --> FLOURISHING CITIES, PROSPEROUS
AGRICULTURE, WORLD-FAMOUS MFGRS, LARGE EXPORTS.
 

þ BUT DESPOTIC GOVN SEIZED WEALTH WITHOUT
JUSTIFICATION, IMPOSED EXCESSIVE TAXES.
 

þ BROUGHT AN END TO PROSPERITY --> TURKS UNWILLING
TO WORK OR TO ACCUMULATE CAPITAL BECAUSE IT WOULD
BE SEIZED.
 

þ ENGLAND WAS GROWING IN WEALTH BECAUSE INDIVIDUAL
INITIATIVE PROTECTED BY LAW THAT PRESERVED
INDIVIDUAL WEALTH. NO PROPERTY COULD BE TAKEN FOR
PUBLIC USE WITHOUT JUST COMPENSATION.

     þ JUSTICE EVEN HANDED, NOT ARBITRARY.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

12
 CHARACTERISTICS OF ECONOMIC LIBERALS
 

þ SOME ECONOMIC LIBERALS WOULD GRANT BROADER POWERS
  TO THE NATIONAL GOVERNMENT.

þ OTHERS STRESSED INDIVIDUAL INCENTIVES &
  COMPETITION.

þ OTHERS STRESSED SUPPLY & DEMAND IN FREE MARKETS.
 

þ ALL AGREED ON:

     þ  NEED TO FREE INDIVIDUAL INITIATIVE FROM
          MERCANTILIST RESTRICTIONS;

     þ ON IMPORTANCE OF WORK IN PRODUCING WEALTH;

     þ ON NEED TO PROTECT PROPERTY RIGHTS AS
          CORNERSTONE OF ECONOMIC POLICY.
 
 
 
 
 
 
 
 
 
 



FUSFELD, CH 4

 THOMAS ROBERT MALTHUS [1766-1834]

þ MAJOR PROBLEM IN EARLY 19TH C. BRITAIN =
  CONCERN FOR THE POOR.

þ IN PREVIOUS CENTURIES, EACH PARISH CARED FOR ITS
  OWN. TAX ON LANDOWNERS --> RELIEF FUNDS -->
  PHILOSOPHY OF NOBLESSE OBLIGE.
 

þ BUT THIS ANCIENT SYSTEM OF POOR RELIEF BROKE
DOWN:

     þ WARTIME INCREASES IN FOOD PRICES;
     þ ENCLOSURES --> MANY MORE PEOPLE DISPLACED
          FROM THEIR SMALL PLOTS
     þ INDUSTRIAL REVOLUTION
     þ GROWING CITIES & POPULATION
     þ GROWING NUMBERS OF POOR.
 

þ CONSERVATIVE REACTION TO FRENCH REVOLUTION

     þ NEW MEASURES TO ALLEVIATE POVERTY
          IMPOSSIBLE.
     þ REFORM = ANATHEMA

þ YET GREAT INCREASE IN POOR --> BIG FINANCIAL
  BURDEN ON LANDOWNERS.
 

þ PROBLEM OF POOR DUE TO THIS:

     þ FOOD IS NECESSARY FOR MAN;
     þ PASSION OF SEXES WILL REMAIN CONSTANT.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2
 THOMAS ROBERT MALTHUS [1766-1834] [C]
 

þ "THE POWER OF POPULATION IS INFINITELY GREATER
  THAN THE POWER IN THE EARTH TO PRODUCE
  SUBSISTENCE."
 

þ STEPS TO ALLEVIATE POVERTY ARE FUTILE. WHY?

     þ BECAUSE POP WILL INCREASE UNLESS CHECKED BY
       MISERY OR VICE.

     þ FOR IF POOR GET MORE FOOD, THEY WILL HAVE
       MORE CHILDREN UNTIL FOOD/PERSON FALLS BACK
       TO SUBSISTENCE LEVEL --> THEN POP INCREASE
       TO STOP.

     þ WAGES ALWAYS TEND TO SUBSISTENCE LEVEL. WAGE
       INCREASE --> WORKER HAS MORE CHILDREN -->
       WORKER FALLS BACK TO SUBSISTENCE.
 

þ TM'S CONCLUSION: PAYING RELIEF TO POOR WON'T
  ELIMINATE POVERTY, BUT WOULD MERE INCREASE INCOME
  OF POOR, ENCOURAGE THEM TO HAVE MORE CHILDREN,
  POOR FALL BACK TO SUBSISTENCE AGAIN.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3
 THOMAS ROBERT MALTHUS [1766-1834] [C]
 

þ TM: OLD SYSTEM OF POOR RELIEF RESPONSIBLE FOR
  POVERTY. SOLN: ELIMINATE RELIEF PROGRAM.

þ RELIEF TO POOR ALSO BAD FOR THESE REASONS:

     þ RELIEF --> POOR -->SHIFT OF WEALTH FROM
       THOSE WHO USED WEALTH PRODUCTIVELY TO IDLE
       POVERTY POP. --> SLOW ECON GROWTH.

     þ INSTEAD, THIS WEALTH SHOULD BE INVESTED IN
       PRODUCTIVE ACTIVITY --> PROVIDE JOBS &
       PRODUCT.
 

þ TM: POOR RESPONSIBLE FOR THEIR OWN POVERTY. TO
  ELIMINATE POVERTY, HAVE FEWER CHILDREN. ONLY
  SOLN: MORAL REFORM --> HAVE FEWER CHILDREN.
 

þ TM: LABOR UNIONS NOT SOLN: HIGHER WAGES --> MORE
  CHILDREN --> BID UP FOOD PRICES  --> WEALTH SHIFT
  FROM BUSINESSMEN TO UNPRODUCTIVE LANDOWNERS -->
  REDUCED CAPITAL FOR BUSINESS EXPANSION --> NATION
  WORSE OFF IN LONG RUN.
 

þ TM APPROACH TERRIBLE FOR POOR, BUT GREAT FOR
  CONSERVATIVES BECAUSE IT GIVES THEM GOOD
  ARGUMENTS FOR DOING NOTHING.

þ TM'S PRINCIPLE OF POPULATION --> MAJOR BUILDING
  BLOCK OF CLASSICAL ECONOMICS.

     þ REMAINED BASIS OF WAGE THEORIES FOR CENTURY.

þ TM: PRODUCTION MUST INCREASE FASTER THAN POP. IF
  THERE IS TO BE ANY MAJOR IMPROVEMENTS IN LIVING
  STANDARDS.

     þ EUROPE & N.A ACHIEVED THIS.

     þ BUT IN MANY OTHER COUNTRIES, POP. GROWTH
       EXCEEDS EXPANSION OF PRODUCTION.
 
 
 
 
 
 

4
 DAVID RICARDO [1772-1823], BRITISH
   CLASSICAL ECONOMIST
 

þ APOSTLE OF CAPITAL ACCUMULATION:

     þ GROWTH OF CAPITAL = GREAT SOURCE OF ECONOMIC
       EXPANSION.

     þ ALL ECONOMIC POLICY --> SHOULD BE DIRECTED
       TO EXPANDING IT.
 

þ ECONOMIC FREEDOM --> WAY TO MAXIMIZE PROFITS -->
  PROFITS SOURCE OF INVESTMENT CAPITAL.

þ COMPETITIVE ECONOMY --> LEADS TO PROFIT-
  MAXIMIZING INVESTMENTS.

þ ADVOCATED GOVN. POLICIES THAT BENEFITTED BUSINESS
  --> MAX ECONOMIC GROWTH.

þ A MILLIONAIRE RADICAL, HE ADVOCATED:

     þ REFORMS IN BANKING & CURRENCY
     þ POOR RELIEF
     þ TARIFFS
     þ FREEDOM OF PRESS & SPEECH
 

þ AUTHOR OF THE INFLUENTIAL BOOK PRINCIPLES OF
POLITICAL ECONOMY AND TAXATION.

þ 1815 --> GREAT DEBATE IN ENGLAND --> TO PRESERVE
ENGLAND'S AGRICULTURAL WAY OF LIFE OR NOT?

þ THE CORN LAWS --> THE IMPORT OF WHEAT INTO
ENGLAND

     þ WHEAT & OTHER GRAINS = "CORN"
     þ VS. "INDIAN CORN" OR "MAIZE"
 
 
 
 
 
 
 
 
 
 
 
 
 

5
 DAVID RICARDO [1772-1823]
 

þ ENGLISH LAWS --> TO PROMOTE DOMESTIC AGRI WITHOUT
  CAUSING MAJOR INCREASES IN PRICE OF FOOD.

     þ WHEN WHEAT PRICES FELL IN ENGLAND, TARIFFS
       RAISED ON WHEAT IMPORTS TO KEEP OUT FOREIGN
       GRAIN THAT WAS DEPRESSING DOMESTIC PRICES,
       HURTING DOMESTIC FARMERS.

     þ WHEN DOMESTIC PRICE OF WHEAT ROSE ABOVE
       CERTAIN LEVEL, IMPORT DUTIES REDUCED,
       KEEPING LID ON DOMESTIC PRICES.
 

þ AFTER WARS WITH FRENCH, WHEAT PRICES FELL &
  FARMERS CLAMORED FOR HIGHER DUTIES, FEARING RUIN.

     þ SOUND AGRI NEEDED FOR BR DEFENSE & NAT.
       VIGOR.

     þ REVIVAL OF PHYSIOCRACY.
 

þ BUT BUSINESS INTERESTS OPPOSED TO TARIFF
  INCREASES --> RAISE FOOD PRICES --> FORCE WAGES
  UPWARD --> REDUCED PROFITS--> DECREASED EXPORTS -
  -> RUIN FOR ENGLISH INDUSTRY.

þ BUSINESS INTERESTS SAID ENGLAND'S FUTURE LAY WITH
  INDUSTRIAL EXPANSION, NOT AGRI.

þ BUS. INTERESTS DEMANDED REPEAL OF CORN LAWS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

6
 DAVID RICARDO [1772-1823] [C]
 

þ RICARDO ON BUSINESS SIDE OF ARGUMENT:
 

þ LAND OWNERS, NOT FARMERS, CHIEF BENEFICIARY OF
  HIGHER WHEAT PRICES.
 

þ HIGHER PRICES --> CULTIVATION IN OTHERWISE
UNPROFITABLE AREAS --> RENTS WOULD BE RAISED IN
OLDER AREAS --> MORE NAT. INCOME TO LANDOWNERS -->
THIS PARASITIC GP WOULD USE INCOME FOR LUXURY
EXPENDITURES --> NOT FOR PRODUCTIVE INVESTMENT.
 

þ ENLARGE CULTIVATION WOULD DRAW CAPITAL & LABOR
AWAY FROM INDUSTRY, HINDERING INDUSTRY.
 

þ HIGHER FOOD PRICES ---> HIGHER WAGES --> HIGHER
MFGG COSTS --> REDUCED ENGLISH EXPORTS --> REDUCED
OUTPUT FOR ENGLISH MFGG.
 

þ ALSO, REDUCED PROFITS FOR MFGG --> SLOWER CAPITAL
ACCUMULATION & ECON EXPANSION.
 

þ IN SUM, RICARDO OPPOSED CORN LAWS, BUT NOT THEIR
COMPLETE REPEAL.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7
 RICARDO'S THEORY OF ECONOMIC GROWTH

þ RICARDO DEVELOPED THEORETICAL MODEL OF THE
  ECONOMY --> DEVELOPED A GENERAL THEORY OF
  ECONOMIC GROWTH.
 

þ IN EARLY STAGES OF NATION'S GROWTH, POP. SMALL &
  ONLY SMALL PORTION OF LAND CULTIVATED.
 

þ RENT PAID TO LANDOWNERS ONLY SMALL PART OF NAT.
  INCOME, PROFITS TO FARMERS LARGE PART.
 

þ PROFITS PLOWED BACK INTO INDUST DEVELOPMT -->
  GREATER DEMAND FOR LABOR --> POP GROWTH --> WHILE
  WAGES REMAIN AT SUBSIST. LEVEL.
 

þ POP GROWTH --> EXPANSION OF CULTIVATED AREAS -->
  RAISE FOOD PRICES TO COVER HIGHER COSTS OF
  GROWING ON LESS FERTILE AREAS.
 

þ HIGHER FOOD PRICES --> LANDOWNERS RAISE RENTS IN
  OLDER CULTIVATED AREAS.

þ ALSO, HIGHER FOOD PRICES --> EMPLOYERS PAY HIGHER
  MONEY WAGES  --> COST OF MFGG GOODS UP --> REDUCE
  MFGG PROFITS --> REDUCED WEALTH FOR EXPANSION &
  REDUCED INCENTIVE TO INVEST --> CAPITAL
  ACCUMULATION SLOWING --> ECON GROWTH SLOWING -->
  HALTING OF GROWTH AFTER MANY DECADES.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8
 RICARDO'S THEORY OF ECONOMIC GROWTH
 

þ AT THIS MATURE STAGE, POP LARGE, CULTIVATION
  EXTENDED, INDUSTRY DEVELOPED, PRODUCTION HIGH -->
  BUT CAPITAL ACCUMULATION ADEQUATE ONLY FOR
  REPLACEMENT OF CAPITAL, NOT FURTHER EXPANSION.
 

þ RICARDO BELIEVED THAT ECONOMY, IF LEFT ALONE,
  WOULD ACHIEVE MAX. GROWTH POSSIBLE:

     þ BUSINESS SHOULD BE FREED OF ALL RESTRICTIONS
       THAT MIGHT REDUCE ABILITY TO MAX PROFITS.

     þ RIGHT OR WRONG, RICARDO'S THEORY WAS ON THE
       SIDE OF THE COMING RULERS OF THE SOCIAL
       ORDER, BUSINESS INTERESTS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9
 RICARDO AND THE INTERNATIONAL ECONOMY
 

þ RICARDO SHOWED THAT INTERNATIONAL SPECIALIZATION
  WAS ADVANTAGEOUS TO ALL NATIONS.

þ DR ALSO SHOWED THAT TARIFFS TO PROTECT DOMESTIC
  PRODUCERS INJURED THE NATION IMPOSING THEM.

þ FREE TRADE WAS ROAD TO ECONOMIC WELL BEING -->
  DOMESTICALLY & INTERNATIONALLY.
 

þ DR: THE LAW OF COMPARATIVE ADVANTAGE:

     þ IF IT COSTS LESS TO PRODUCE COST IN ENGLAND
       THAN IT DOES TO PRODUCE WHEAT -- COMPARED
       WITH COSTS IN OTHER COUNTRIES -- PAYS FOR
       ENGLISH TO SHIFT TO CLOTH MFGG, EXPORT
       CLOTH, & IMPORT WHEAT FROM OTHER COUNTRIES.
 

     þ ENGLISH WORKER --> 1 DAY TO MAKE YD OF CLOTH
                      --> 2 DAYS TO GROW BUSHEL OF
                           WHEAT.

     þ THUS, A BUSHEL OF WHEAT COSTS 2X YD OF
       CLOTH.
 

     þ FRENCH WORKER --> 1 DAY TO MAKE YD OF CLOTH
                     --> 1 DAY TO MAKE BUSHEL OF
                         WHEAT.

     þ CONCLUSION: ENGLAND SHOULD MAKE CLOTH (1
       DAYS LABOR), EXPORT TO FR, TRADE IT 1 FOR 1
       FOR WHEAT, IMPORT THE WHEAT BACK TO ENGLAND.

     þ IN THIS WAY, ENGLISH WILL GET FOR ONE DAY'S
       LABOR, THE WHEAT IT WOULD OTHERWISE TAKE 2
       DAYS TO PRODUCE.
 
 
 
 
 
 
 
 
 
 
 

10
 RICARDO AND THE INTERNATIONAL ECONOMY
  [C]

þ FR WOULD ALSO GAIN: THEY PRODUCE WHEAT, , SHIP TO
  ENGLAND, , TRADE ONE BUSHEL FOR 2 YDS OF CLOTH,
  AND SHIP CLOTH BACK TO FR.

þ BOTH SIDES BENEFIT FROM THIS SPECIALIZATION &
FREE    EXCHANGE.

þ ENGLAND WOULD PRODUCE & EXPORT MUCH CLOTH, BUT
  OUTPUT OF WHEAT WOULD BE SMALL. THE OPPOSITE IN
  FR.
 
 
 
 
 

 RICARDO SAW WHOLE WORLD MOVING TOWARD
   GREATER WEALTH
 

þ DR SAID THAT IN FULLY DEVELOPED ECONOMY, THAT THE
  RETURN TO CAPITAL WAS LOW --> ONLY REPLACEMENT OF
  WORN-OUT CAPITAL EQUIPMENT.
 

þ AS RETURN TO CAPITAL FELL IN ENGLAND, ENGLISH
  INVESTORS WOULD SEEK HIGHER RETURNS BY INVESTING
  IN LESS WELL DEVELOPED COUNTRIES ABROAD.
 

þ CAPITAL EXPORTS FROM MATURE ECONOMIES WOULD FLOW
  QUICKLY TO NEWLY DEVELOPING COUNTRIES, WHO WOULD
  BE BROUGHT TO HIGHER LEVELS OF PRODUCTION &
  WEALTH.

þ THUS, CLASSICAL ECONOMISTS SUCH AS DR SAW THE
  WHOLE WORLD GRADUALLY MOVING TOWARDS OPULENCE.
 
 
 
 
 
 
 
 
 
 
 
 

11
 JEREMY BENTHAM AND INTERVENTIONIST LIBERALISM

þ JEREMY BENTHAM [1748-1832]

þ PUBLISHED FRAGMENTS ON GOVERNMENT IN 1776.

þ BELIEVED GREATER DEMOCRACY WOULD PROMOTE "THE
  GREATEST GOOD FOR THE GREATEST NUMBER."
 

þ UTILITARIAN PHILOSOPHY.

þ EVERY ACT MORALLY VALUABLE TO EXTENT THAT IT
  RESULTED IN HAPPINESS.

þ HUMAN ACTIONS BASED ON POLES OF PLEASURE & PAIN.
  NATURE PLACED MANKIND ON UNDER TWO MASTERS:
  PLEASURE & PAIN.
 

þ SOCIAL SYSTEM SHOULD MAX SOCIAL BENEFITS &
  DISTRIBUTE THEM AS WIDELY AS POSSIBLE:

     þ SMALL INCREASE IN HAPPINESS FOR MANY BETTER
       THAN A LARGE INCREASE FOR A FEW.

þ COMPARISON OF MAGNITUDE OF BENEFITS & COSTS MUST
  BE MADE TO DETERMINE BEST SOLN.

þ CAN HAPPINESS OR UTILITY BE QUANTIFIED?

     þ YES, SAID BENTHAM.
     þ OTHERS SAID NO, ONLY COMPARISONS CAN BE
       MADE:

          þ I PREFER MARY TO JANE
          þ I PREFER APPLES TO ORANGES

     þ ABSOLUTE HAPPINESS FROM EATING APPLES
       IMPOSSIBLE TO MEASURE.
 
 
 
 
 
 
 
 
 
 
 
 

12
 

 JEREMY BENTHAM AND INTERVENTIONIST LIBERALISM
[C]

þ JB SAID PEOPLE IN FACT MAKE DECISIONS ON BASIS OF
  UTILITY DERIVED FROM ALTERNATIVE COURSES OF
ACTION.

þ THIS HEDONISTIC CALCULUS WAS PRINCIPLE UNDERLYING
  ALL HUMAN ACTION AND MEANS BY WHICH WELFARE OF
   SOCIETY MAXIMIZED.

þ YET, PEOPLE ACT ONLY FOR THEIR OWN GREATEST
  PLEASURE. WON'T THAT WORK AGAINST THE GREATEST
  HAPPINESS OF ALL?

þ WITHOUT GOVN, YES. BUT GOVERNMENT CAN CHANGE THAT
  CALCULUS. MORAL & LEGISLATIVE SANCTIONS CAUSE
  INDIVIDUAL ACTIONS TO COINCIDE WITH THE PUBLIC
  INTEREST:

     þ SANCTIONS REWARD INDIVIDUAL ACTIONS THAT
       BENEFIT ALL;

     þ SANCTIONS PUNISH ACTIONS THAT DIMINISH
       PUBLIC WELFARE.

þ JB VIEWED HUMANS AS PLEASURE MACHINES CONTINUALLY
  CALCULATING THE PROS & CONS OF ALTERNATIVE
  COURSES OF ACTION.

þ ASSUMPTION THAT INDIV DECISIONS WOULD LEAD TO MAX
  PUBLIC WELFARE INHERENT IN ADAM SMITH & OTHER
  CLASSICAL ECONOMISTS, BUT BENTHAM MADE EXPLICIT.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13
 JEREMY BENTHAM AND INTERVENTIONIST LIBERALISM
 

þ CLASSICAL LIBERALISM OF 18TH CENTURY STRESSED
  INDIVIDUAL FREEDOM AS ULTIMATE GOAL OF ALL
  POLICY:

     þ IT WAS REACTING AGAINST POL CENTRALIZATION &
       ECON REG.

     þ ANY RESTRICTION ON INDIV FREEDOM HINDERED
       ACHIEVEMENT OF MAX WELFARE.

     þ SMITH -->MIN ROLE OF GOVN TO POLICE,
       JUSTICE, ARMS.
 
 
 

þ BENTHAM DISAGREED. SAID SMITH APPROACH BASED ON
  ERRONEOUS IDEA THAT ONLY INDIVIDUAL ACTION COULD
  CREATE WELFARE.
 

þ JB: ACTIONS OF ONE PERSON IN HIS OWN INTEREST
  MIGHT REDUCE WELFARE OF OTHERS.

þ INSTITUTIONAL ARRANGEMENTS WITHIN WHICH PEOPLE
  ACT COULD DETERMINE OUTCOME OF ACTIONS.

þ JB BELIEVED IN GOVN INTERVENTION TO IMPROVE
  PEOPLE'S LIVES.

þ CLASSICAL LIBERALISM THAT HAD STRESSED
  INDIVIDUALISM GAVE WAY TO AN INTERVENTIONIST
  LIBERALISM (THE PHILOSOPHICAL RADICALS) THAT
  STRESSED SOCIAL WELFARE. BENTHAM WAS ITS APOSTLE.

þ OTHER INTERVENTIONIST LIBERALS:

     JAMES MILL  DAVID RICARDO     JOHN STUART MILL
 
 
 
 
 
 
 
 
 

new
 
 

 JOHN STUART MILL [1806-1873]
 

þ 19TH-C BRITISH PHILOSOPER & ECONOMIST.

þ LEARNED GREEK AT 3, LATIN AT 8.

þ BY 14, HAD READ MOST GK & LATIN CLASSICS IN
  ORIGINAL LANGUAGES.

þ BY 14, HAD ALSO READ WIDELY IN HISTORY, LOGIC,
  MATH, SCIENCE.

þ BY 13, HAD STARTED TO READ THE ECONOMISTS, ESP.:

     þ RICARDO      þ MALTHUS      þ BENTHAM
 

þ VERY IMPRESSED BY MALTHUSIAN POPULATION THEORY.
 

þ AT 17, ARRESTED FOR DISTRIBUTING PAMPHLETS
ADVOCATING BIRTH CONTROL & CONTRACEPTION, TO
IMPROVE WORKING CLASS.

þ AFTER SUFFERING FROM PERSONAL DEPRESSION, HE
DECIDED TO DEVOTE HIS LIFE TO POLITICAL & ECONOMIC
REFORM.

     þ BECAME BEST KNOWN 19TH-C BR PHILOSOPHER.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 JOHN STUART MILL [1806-1873] [C]

þ BOOKS BY J.S. MILL:

     þ A SYSTEM OF LOGIC [2 VOLS, 1843]
     þ ON LIBERTY [1859]
     þ CONSIDERATIONS ON REPRESENTATIVE GOVERNMENT
          [1861]
     þ UTILITARIANISM [1862]
     þ AUTOBIOGRAPHY [1873]
     þ PRINCIPLES OF POLITICAL ECONOMY [1848]
 
 

þ MILLS' MOST IMPORTANT ECONOMIC IDEA:

     þ DISTINCTION BETWEEN PRODUCTION &
          DISTRIBUTION.

     þ PRINCIPLES REGULATING PRODUCTION OF WEALTH
ARE GROUNDED IN LAWS OF NATURE -- ARE BEYOND HUMAN
CONTROL.

     þ BUT THE LAWS OF DISTRIBUTION ARE PARTLY
CREATED BY HUMAN INSTITUTIONS,  THUS SUBJECT TO
CHANGE.

          þ IRISH FARMERS POOR BECAUSE OF WAY LAND
DISTRIBUTED -- NOT BECAUSE OF A LAW OF NATURE.
 

þ IT IS NOT JUST THAT SMALL MINORITY OF MANKIND
  SHOULD BE BORN TO ENJOYMENT OF ALL ADVANTAGES,
  WHILE THE IMMENSE MAJORITY ARE CONDEMNED TO
  NEVER-ENDING TOIL MERELY TO EARN BARE
  SUBSISTENCE.

þ BELIEVED THAT LAISSEZ-FAIRE CAPITALISM  WOULD BE
  SUPERCEDED BY "COOPERATIVE PRODUCTION" -->
  SOCIALISM.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 JOHN STUART MILL [1806-1873] [C]
 

þ MILL WELCOMED:

  þ WORKER COOPERATIVES  þ WORKER-OWNED ENTERPRISES

þ ENLIGHTED ACTION WOULD BRING VOLUNTARY
ASSOCIATIONS [E.G. WORKER COOPERATIVES & PROFIT-
SHARING].

þ MILL DID NOT BELIEVE THAT AN ECONOMY ORGANIZED
AROUND

     þ INDIVIDUAL ENTERPRISE
     þ PRIVATE PROPERTY
     þ FREEDOM OF CONTRACT
     þ MINIMUM OF GOVN ACTION

WAS THE FINAL CONSUMMATION OF ECONOMIC PROGRESS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 MAJOR THEMES OF CLASSICAL ECONOMICS
 

þ INDIVIDUAL ENTERPRISE

þ PRIVATE PROPERTY

þ FREEDOM OF CONTRACT

þ MINIMUM OF GOVERNMENT ACTION
 
 

þ ECONOMY HAS CHANGED FROM RICARDO'S TIME

     þ FROM INDUSTRIAL REV --> MATURE
          INDUSTRIAL CAPITALISM
 

þ THE MALTHUSIAN POPULATION TRAP STILL RELEVANT:

     þ ADVANCED INDUSTRIAL NATIONS --> RISING
       OUTPUT HAS NOT TRIGGERED POP. GROWTH, WHICH
       PREVENTS INCOME/PERSON FROM RISING.

     þ BUT MANY LESS-DEVELOPED COUNTRIES ARE
       FINDING POP. GROWTH IS EATING UP GAINS OF
       ECONOMIC EXPANSION --> BILLIONS MIRED IN
       POVERTY.
 

þ MEANWHILE, ADVANCED COUNTRIES GROW WEALTHIER:

     þ CAPITAL ACCUMULATION + TECH. CHANGE -->
          GREATER WEALTH

     þ 1945-70 --> GREATEST GROWTH IN WESTERN CIV.
     þ 1970-90 --> SLOWED GROWTH, STAGNATION
 

     þ RAPID TECH. CHANGE --> DEPLETION OF
       EXHAUSTIBLE RESOURCES + ENVIRONMENTAL
       EFFECTS.

     þ INSTABILITY TO PRODUCTION SECTOR OF ECONOMY.

     þ ACCELERATED TREND TOWARD BIG BUSINESS.
 
 
 


FUSFELD -- CH. 5
 

 EVENTS BETWEEN 1775-1825 --> BACKGD FOR
   RISE OF MODERN SOCIALISM
 

þ INDUSTRIAL REVOLUTION -- KEY.

     þ RISING LIVING STANDARDS
          þ CAPITAL INVESTMENT
          þ INDUSTRIALIZATION
          þ HIGHER PRODUCTIVITY
 

     þ OPPORTUNITIES FOR GREAT WEALTH FPR
       NEW MIDDLE CLASS (BOURGEOISIE)

þ FACTORY WORKERS PAID LOW WAGES:

     þ WAS MUCH UNEMPLOYMENT IN RURAL AREAS.
     þ THUS WORKERS ACCEPT LOW WAGES.
     þ LONG WORK HRS.
     þ WOMEN, CHILDREN EMPLOYED.
     þ FACTORY DISCIPLINE HARSH

     þ OFTEN, COMPANY-OWNED STORES OFTEN HAD EXCLUSIVE
       SELLING RIGHTS TO EMPLOYEES.
 

þ ESP. COMETITITVE WERE COAL & TEXTILE INDUSTRIES.

     þ INTENSE PRICE COMPETITION.
     þ COMPETE BY SQUEEZING LABOR COSTS.
     þ ESP. SEVERE IN 1ST HALF OF 19TH C.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 EVENTS BETWEEN 1775-1825 --> BACKGD FOR
   RISE OF MODERN SOCIALISM [C]
 

þ SHARP CONTRASTS BETWEEN

     þ GROWING WEALTH OF NEW INDUSTRIALISTS & BANKERS.

     þ POVERTY OF WORK FORCE IN FACTORIES IN
       SLUM-RIDDEN CITIES.

þ INDUSTRIALIZATION HAD PROMISED ABUNDANCE.

þ BUT A STARK CONTRAST BETWEEN IDEALS & REALITY.

þ FRENCH REV OF 1789 HAD PROMISED "LIBERTY, EQUALITY, &
  FRATERNITY."

     þ FR. OVERTHREW PRIVILEGES OF OLD ORDER, MARCHED
       ACROSS EUROPE TO SWEEP AWAY REMNANTS OF FEUDALISM
       & ARISTOCRACY.
 

þ NEW BELIEFS IN FREEDOM & EQUALITY --> SEEMED OT BE
  USHERING IN AN AGE OF DEMOCRACY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 EVENTS BETWEEN 1775-1825 --> BACKGD FOR
   RISE OF MODERN SOCIALISM [C]
 

þ BUT DEFEAT OF NAPOLEON BROUGHT REACTION & REPRESSION --
> REESTABLISHMENT OF OLD SYSTEM OF PLACE & PRIVILEGE.

     þ PARLIAMENTARY GOVN IN BR. & FR.

     þ BUT PARTICIPATION LIMITED TO PROPERTIED PERSONS.

     þ WORKING PEOPLE EXCLUDED FROM VOTE.

     þ DEMOCRACY FINE FOR MIDDLE CLASS, BUT DANGEROUS IF
       EXTENDED TO WORKER.
 

þ INDUSTRIAL REV. & FR. REV. HAD RAISED HIGH HOPES FOR

     þ AN END TO EXCESSIVE TOIL;
     þ TRIUMPH OF BROTHERHOOD & EQUALITY.

þ HOPES DASHED BY DARKNESS OF POST-NAPOLEONIC REACTION.

     þ POSTWAR DEPRESSSIONS --> GREATER POVERTY THAN
       BEFORE.

     þ UNEMPLOYED WORKER HAD NO PLOT OF LAND TO GROW
       CROPS ON.
 

þ TO EARLY SOCIALISTS, PRIVATE OWNERSHIP OF FACTORIES

     þ SOURCE OF SOCIETY'S ILLS.
     þ OWNERS SAT BACK & GREW WEALTHY WHILE THE MASSES
       WORKED.

     þ AND WEALTHY WIELDED POLITCAL POWER.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 ROBERT OWEN [1771 - 1858], UTOPIAN
 

þ ROOTS OF EARLY SOCIALISM TYPIFIED BY ENGLISHMAN, ROBERT
  OWEN.

þ WORKED IN BR. TEXTILE INDUSTRY, STARTING AT 10.
  TEXTILE-MILL MGR AT 19.

þ BY 26, OWEN HAD BOUGHT TEXTILE MILLS AT NEW LANARK,
  SCOTLAND.

þ BEFORE OWEN, THIS IS HOWMILLS AT NEW LANARK MANAGED:

     þ THIEVES, DRUNKARDS, CRMINALS PART OF LABOR FORCE.

     þ CHILDREN FROM ORPHANAGES

     þ WORKDAY -- 6 AM - 7 PM.

     þ COMPANY TOWN --> WOODEN 1-ROOM HOUSES.

þ OWEN --> VERY RELIGIOUS. BELIEVED WORKERS IN NEW LANARK
  WERE BAD BECAUSE OF THEIR ENVIRONMENT/
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 ROBERT OWEN'S NEW LANARK, SCOTLAND:
   A MODEL INDUSTRIAL TOWN

þ OWEN'S GOAL: TURN NEW LANARK INTO MODEL COMMUNITY:

     þ NO CHILD UNDER 10 CAN WORK.
     þ WORKDAY FIXED AT 10.5 HRS.
     þ SCHOOL IN EVES FOR WORKING CHILDREN.
     þ SET UP NURSERY SCHOOLS FOR YOUNG CHILDREN.

     þ "REGISTER OF CHARACTER" FOR ADULT WORKERS. THIS
        RECORDED:

          þ DRUKENNESS
          þ ILLICIT SEXUAL BEHAVIOR, ETC.
          þ PUBS DISAPPEARED.
          þ ILLIGITIMACY DROPPED.

     þ AN ELECTED COMMITTEE INSPECTED HOMES FOR
       CLEANLINESS.

     þ ESTABLISHED A FUND FOR THE INJURED, SICK, AGED -->
       WORKERS CONTRIBUTED 1/60TH OF THEIR WAGES.

     þ SAVINGS BANK EST. TO ENCOURAGE THRIFT

     þ OWEN EST. STORE THAT SOLD FOOD & OTHER QUALITY
       GOODS AT MUCH LOWER PRICES THAN PRIVATE
       SHOPKEEPERS.
 

 HOW SUCCESSFUL?

þ HIS PLANTS LOCATED IN SURPLUS-LABOR AREA.

     þ HIS WAGES WERE BELOW AVERAGE:

          þ MEN --> $2.40/WK  þ WOMEN --> $1.50/WK

þ HIS PATERNALISTIC METHODS BROUGHT HIGH LABOR
  PRODUCTIVITY.

þ IN 1819, HIS PROFITS = 12.5 %/INVESTED CAPITAL.
 
 
 
 
 
 
 
 
 
 
 

 ROBERT OWEN [1771 - 1858], UTOPIAN

þ OWN REALIZED THE NEED FOR INDUSTRIAL SELF-GOVERNMENT BY
  THE WORKERS.

þ 1N 1816, OWEN WROTE ONE OF LANDMK BOOKS OF SOCIALIST
  MOVEMENT, THE NEW VIEW OF SOCIETY

þ AT THIS TIME, ENGLAND WAS DEBATING FIRST FACTORY ACT TO

     þ LIMIT HRS OF WORK
     þ EST. MIN. AGE FOR CHILD LABOR.
     þ OWN LOBBIED HARD FOR BILL, BUT DISAPPOINTED IT DID
       NOT ADEQUATELY COVER CHILD LABOR.

     þ OWEN DISSAPOINTED OTHER EMPLOYERS DID NOT IMITATE
       NEW LANARK.
 

 OWEN FOUNDED NEW HARMONY, INDIANA IN 1824.

þ COOPERATIVE COMMUNITY.
þ LAND OWNED IN COMMON BY PEOPLE.
þ BUT THE COMMUNITY FAILED.
 
 

þ OWEN PUSHED THE FOUNDING OF COOPERATIVE RETAIL STORES
  IN ENGLAND:

     þ BEGINNING OF CONSUMERS' COOPERATIVE MOVEMENT IN
       ENGLAND & SCANDINAVIA.

þ OWEN ALSO PUSHED PRODUCERS' COOPERATIVES -- WORKERS WHO
  OWNED THEIR FACTORY.

     þ PROJECTS DID NOT SUCCEED.
 

þ IN SUM, OWEN A VISIONARY WHO SOUGHT TO REFORM SOCIETY
  THRU WORKER-OWNED COMMUNMITIES & ENTERPRISES:

     þ PROFITS NOT PERMITTED.
     þ EXPECTED LIFE OF INDIVIDUAL WOULD HAVE LARGER
       MEANING THRU COOPERATIVE LIFE OF GROUP.

     þ BUT AN INDIVIDUALISTIC ERA --> DOOMED TO FAIL.
 
 
 
 
 
 

7
 KARL MARX [1818-1883]
 

þ BORN IN GERMANY, FATHER A PETTY LEGAL OFFICIAL.

þ STUDIED PHILOSOPHY & RELIGION AT UNIV. OF BERLIN.

þ DOCTORAL DISSERTATION --> ON THE STOIC & EPICUREAN
  ROOTS OF CHRISTIAN DOCTRINE.

þ BECAME AB ATHEIST --> BARRED HIM FROM UNIVERSITY
  CAREER.

þ SO MARX WENT INTO JOURNALISM, BECAME EDITOR OF LIBERAL
  COLOGNE NEWSPAPER IN 1842.
 

þ BECAME CONVINCED OF ECONOMIC BASIS OF POLITICS:

     þ UNDERLYING POLITICAL THEORIES & POLITICAL POWER
       -- > ECONOMIC INTERESTS OF VARIOUS GPS IN SOCIETY.

þ MARX'S NEWSPAPER SHUT DOWN BY GOVN --> MARX TO PARIS --
> MARRIED --> MIXED WITH SOCIALISTS.
 

þ MARX GREATLY INFLUENCED BY PIERRE JOSEPH PROUDHON
[1809-1865], A SOCIALIST LEADER.

     þ P SAID "PROPERTY IS THEFT" & THAT WHOLE PRODUCT OF
INDUSTRY SHOULD GO TO WORKER.

     þ P SAID THAT PRIVATE OWNERSHIP OF MEANS OF
PRODUCTION ENABLED CAPITALIST TO APPROPRIATE WEALTH THAT
RIGHTFULLY BELONGED TO THE WORKER.

     þ THIS CONCEPT WAS BASIC TENET OF 19TH-C SOCIALISM
& KEY TO MARX'S VIEW OF CAPITALISM.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8

 KARL MARX [1818-1883]
 

þ IN PARIS MARX ALSO MET FREIDRICH ENGELS [1820-1895],
SON OF WEALTHY GERMAN TEXTILE MFGR, WHO OWNED MILLS IN
GERMANY & ENGLAND.

     þ ENGELS SUPPORTED MARX & HIS FAMILY FOR NEXT 35
       YRS.

þ MARX EXPELLED FROM FRANCE AT REQUEST OF PRUSSIAN GOVN.

þ MARX & ENGELS TO BRUSSELS IN 1848. WROTE THE COMMUNIST
MANIFESTO
 

þ MARX WENT TO LONDON, WHERE HE SPENT REST OF HIS LIFE:

     þ MOST TIME SPENT DOING RESEARCH IN BR. MUSEUM &
       WRITING HIS GREAT WORK, DAS CAPITAL.[VOL I, 1867,
       VOL II, 1885].
 

þ MARX TOOK LEADING PART IN THE INTERNATIONAL, AN
INTERNATIONAL ALLIANCE OF SOCIALIST PARTIES.

þ MARX GAVE REVOLUTIONARY SOCIALISM ITS THEORETICAL FDN.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9
 KEY MARXIAM IDEAS

þ ECONOMIC RELATIONSHIPS ARE DRIVING FORCE OF ANY
SOCIETY.

þ RELATIONS OF PRODUCTION --> DEPEND ON MATERIAL POWRS OF
PRODUCTION.

þ ECONOMIC STRUCTURE OF SOCIETY --> SUM TOTAL OF
RELATIONS OF PRODUCTION --> THE FDN ON WHICH RISE THE
LEGAL & POLITICAL SUPERSTRUCTURE & DEFINITE FORMS OF
SOCIAL CONSCIOUSNESS.

þ MODE OF PRODUCTION --> DETERMINES SOCIAL, POLITICAL,
SPIRTUAL PROCESSES OF LIFE.
 

þ CAPITALIST VS WORKER --> THESE TWO CLASSES, BOURGEOIS
& PROLETARIAT, STAND IN OPPOSITION, SINCE CAPITALIST CAN
PROSPER ONLY IF WORKER IS EXPLOITED.

þ MARX'S ATTACK ON CAPITALISM BEGAN WITH HIS LABOR THEORY
OF VALUE.

     þ TRUE VALUE OF ANY PRODUCT = AMOUNT OF LABOR USED
IN ITS PRODUCTION.

     þ LABOR NOT PAID THE FULL VALUE OF THE PRODUCT -->
THUS EXPLOITATION.
 

þ CAPITALISM --> GIGANTIC MECHANISM IN WHICH LABOR TIME
OF WORKER --> PROFITS --> CAPITAL.

     þ LABOR TIME IS OWNED BY WORKER.
     þ BUT CAPITAL IS OWNED BY CAPITALIST.
þ THUS, CAPITALIST CLASS GROWS INCREASINGLY WEALTHY OUT
OF LABOR OF WORKING CLASS.
 
 
 
 
 
 
 
 
 
 
 
 

10
 KEY MARXIAM IDEAS [C]
 

þ EXPLOITATION OF WORKER ALSO HAS PSYCHOLOGICAL EFFECT --
> ALIENATION

     þ WORKER SEPARATED FROM TOOLS OF PRODUCTION.
     þ WORKER SEPARATED FROM THE PRODUCT.
     þ PREVENTS FULL DEVELOPMENT OF THE SELF.

     þ RESULT: PERVASIVE ALIENATION THAT DEHUMANIZES ALL
PERSONAL & SOCIAL RELATIONSHIPS.

     þ MONEY PAYMENTS TAKE PLACE OF HUMAN FEELINGS.

     þ RESULT: A SOCIAL & PSYCHOLOGICAL PATHOLOGY THAT
PERVADES ALL CAPITALIST SOCIETY.
 

þ OTHER KEY MARXIAM IDEAS:

     þ BASE-SUPERSTRUCTURE THEORY
     þ CLASS WARFARE
     þ FEUDALISM --> CAPITALISM --> SOCIALISM -->
        COMMUNISM


FUSFELD, CH 6
1
 HERBERT SPENCER [1820- 1903]

þ RISE OF SOCIALISM & ITS DEMAND FOR SOCIAL JUSTICE
  FORCED THE EXISTING ORDER TO RAISE ITS DEFENSES.

þ ONE ANSWER TO MARX & SOCIALISM: 19TH C PHILOSOPHY
  ON INDIVIDUALISM.

     þ THIS DEVELOPED AS THE IDEOLOGY OF A BUSINESS
       CIVILIZATION BETWEEN 1850-WWI.
 

þ TWO LEADING PROPONENTS OF INDIVIDUALISM:

     þ ENGLISH PHILOSOPHER HERBERT SPENCER
       [1820-1903]
     þ AMERICAN SOCIOLOGIST, WILLIAM GRAHAM SUMNER
       [1840-1910].
 
 

þ DARWIN DISCUSSED EVOLUTION IN TERMS OF NATURAL
   SELECTION.

          þ THE ORIGIN OF SPECIES  1859
 

þ SPENCER COINED THE PHRASE: "SURVIVAL OF THE
  FITTEST."

þ "THOSE ORGANISMS WHICH ARE BEST FITTED TO THEIR
   ENVIRONMENT  ... WILL SURVIVE. THE LEAST FIT
   WILL DIE OUT, LEAVING THE STRONGEST AND BEST."
 

þ TO SPENCER, SUCH WAS THE ROUTE TO PROGRESS: THE
  WEAKEST INDIVIDUALS & LEAST-USEFUL SOCIAL
  INSTITUTIONS DIE OUT.
 
 
 
 
 
 
 
 
 
 
 
 
 

2

 HERBERT SPENCER [1820- 1903] [C]
 

þ SO AS NOT TO INTERFER WITH THIS NATURAL
  EVOLUTION, GOVERNMENT WAS SEEN AS A NECESSARY
  EVIL, WHOSE POWERS SHOULD BE SEVERELY LIMITED TO:

     þ PROTECTION OF PEOPLE;
     þ PROTECTION OF PROPERTY;
     þ ENFORCEMENT OF PRIVATE CONTRACTS.
 

þ IN SPENCER'S VISION FOR SOCIETY, THERE SHOULD BE:

     þ NO GOVN REGULATION OF INDUSTRY;
     þ NO STATE CHURCH;
     þ NO ORGANIZED COLONIZATION;

     þ NO RELIEF FOR THE POOR;
     þ NO SOCIAL LEGISLATION;

     þ NO PUBLIC MINT;
     þ NO GOVERNMENT-OWNED POSTAL SYSTEM;
     þ NO PUBLIC EDUCATION.
 

þ INDIVIDUAL ACTION SHOULD BE UNFETTERED.

þ NOTHING SHOULD INTERFER WITH THE NATURAL
  SELECTION OF THE FITTEST:

     þ NOT EVEN PUBLIC SANITATION, WHICH PROTECTS
       AND THEREBY PERPETUATES WEAKER TYPES.
 

þ SPENCER'S PHILOSOPHY HAD A GREATER IMPACT IN U.S.
  THAN IN ENGLAND.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3
 WILLIAM GRAHAM SUMNER, AMERICAN DISCIPLE
   OF HERBERT SPENCER

þ  HERBERT SPENCER'S FOREMOST AMERICAN FOLLOWER WAS
   EPISCOPAL MINISTER & YALE ECONOMIST WM. GRAHAM
   SUMNER.
 

þ WITHIN SOCIAL SYSTEM, INDIVIDUALS RISE & FALL:

     þ PERSON WITH ABILITY & DRIVE WILL RISE.
 

þ CONCENTRATED WEALTH JUSTIFIED, FOR IT WAS USED TO
PRODUCE FOR OTHERS.

þ ECONOMIC ELITE WAS JUSTIFIED: THEY WERE THERE
  BECAUSE THEY HAD PRIVIDED THE GOODS & SERVICES
  SOCIETY WANTED.

þ SUMNER, THEN, APPLIED EVOLUTIONARY IDEAS TO
  SOCIETY.

     þ UNRESTRAINED INDIVIDUALISM GOOD, FOR ONLY
       SOCIAL GOOD COULD COME FROM COMPETITION.

     þ GREAT CONCENTRATIONS OF WEALTH ARE GOOD. FOR
       THAT WEALTH OS PUT TO GOOD USE FOR OTHERS.

     þ NO NEED TO SHOW CARING OF SOCIAL
       RESPONSIBILITY FOR OTHERS:

          þ FOR ANYONE DESTROYED BY COMPETITION
            COULD BE CONSIDERED UNFIT, NOT CAPABLE
            OF MAKING A LARGE ENOUGH CONTRIBUTION
            TO THE SOCIAL ORDER TO SURVIVE.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4
 U.S. SUPREME COURT JUSTICE STEPHEN J. FIELD
   [1816-1899]
 

þ THE PHILOSPHY OF INDIVIDUALISM WAS APPLIED TO
  ECONOMIC AFFAIRS MOST FULLY IN THE U.S.

þ THE CIVIL WAR  [1861-65] PERMITTED THE INDUSTRIAL
  INTERESTS OF THE NORTHEAST TO ACHIEVE DOMINANCE

þ THESE ACTS PASSED:

     þ THE MORILL TARIFF OF 1861 -- RAISED TARIFFS.
     þ THE HOMESTEAD ACT OF 1862
     þ THE PACIFIC RAILWAY ACTS OF 1862 & 1864
     þ THE NATIONAL BANKING ACT OF 1863

     þ ALL THIS SET STAGE FOR DOMINANCE OF PRIVATE
       ENTERPRISE IN A BUSINESS-ORIENTED
       CIVILIZATION.

þ THE PHILOSOPHY OF UNRESTRICTED INDIVIDUALISM CAME
  TO BE EMBODIED IN THE CONSTITUTION.

     þ MOST RESPONSIBLE WAS SUPREME COURT JUSTICE
       STEPHEN J. FIELD.

     þ BORTHER OF CYRUS FIELD --> 1ST TRANS-
       ATLANTIC TELEGRAPH CABLE.

þ  GOLD RUSH TO CA --> JUDGESHIP --> STATE
   LEGISLATURE --> STATE SUPREME COURT BY 1857 -->
   CHIEF JUSTICE OF CA SUPREME COURT IN 1859 -->
   LINCOLN APPOINTS FIELD TO SUPREME COURT IN 1863
   --> HELD POSITION FOR 34 YRS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5
 U.S. SUPREME COURT JUSTICE STEPHEN J. FIELD
   [1816-1899] [C]
 

þ FIELD PUSHED THE PROTECTION OF PRIVATE PROPERTY &
  FREEDOM OF BUSINESS ENTERPRISE.

þ TO DO THIS HE INVOKED THE 14TH AMENDMENT, ARGUED
  THAT IT APPLIED NOT JUST TO INDIVIDUALS, BUT TO
  CORPORATIONS.
 

þ 14TH AMENDMENT =

     þ PASSED IN 1868 TO PROTECT NEWLY FREED
       SLAVES.

     þ "NO STATE SHALL MAKE ... ANY LAW WHICH SHALL
       ABRIDGE THE PRIVELEGES ... OF CITIZENS OF
       THE U.S.; NOR SHALL ANY STATE DEPRIVE ANY
       PERSON OF LIFE, LIBERTY OR PROPERTY, WITHOUT
       DUE PROCESS OF LAW."
 
 

þ FIELD BECAME MOST IMPORTANT SPOKESMAN FOR U.S.
  SUPREME COURT FOR THE VIEW THAT THE CONSTITUTION
  GUARANTEES INDIVIDUAL & BUSINESS ENTERPRISE
  AGAINST GOVERNMENT INTERVENTION.
 

þ SLAUGHTERHOUSE CASE OF 1873:

     þ LA PASSED LAW INTENDED TO PROTECT PUBLIC
       HEALTH IN NEW ORLEANS.

     þ IT LIMITED OPERATION OF SLAUGHTERHOUSES,
       GIVING A MONOPLY TO A SINGLE CO.

     þ LAW OPPOSED BY BUTCHERS & CATTLE DEALERS.
 
 
 
 
 
 
 
 
 
 
 
 
 

6
 U.S. SUPREME COURT JUSTICE STEPHEN J. FIELD
   [1816-1899] [C]

þ SLAUGHTERHOUSE CASE [C]

     þ ARGUED THAT THEY HAD BEEN CUT OUT OF
       BUSINESS WITHOUT DUE PROCESS OF LAW,
       CONTRARY TO 14TH AMENDMENT.

     þ IN DISSENTING OPINION, FIELD ARGUED THAT
       RIGHT TO OPERATE A SLAUGHTERHOUSE OR ANY
       OTHER BUSINESS WAS RIGHT THAT COULD NOT BE
       REMOVED BY GOVN.
 
 

þ BY 1886, WHOLE COURT CAME TO ACCEPT FIELD'S
  POSITION.

þ IN 1880S, A CA COUNTY IMPOSED SPECIAL TAXES ON
  THE SOUTHERN PACIFIC RAILWAY. UNDER 14TH
  AMENDMENT, THESE TAXES WERE DECLARED INVALID.
 
 

þ BECUASE OF FIELD'S STANCE, MUCH STATE LEGISLATION
  REGULATING BUSINESS WAS STRUCK DOWN:

     þ REG. ON HOURS OF WORK.
     þ REG. ON CHILD LABOR.
     þ REG. ON FACTORY CONDITIONS, ETC.
 

þ IN SUM, AT A TIME WHEN INDUSTRIAL GROWTH WAS
  CREATING MANY NEW PROBLEMS, THE PHILOSOPHY OF
  UNRESTRICTED LAISSEZ-FAIRE WAS THE LAW OF THE
  LAND IN THE U.S.

     þ LITTLE INTERFERENCE WITH PRIVATE ENTERPRISE
       WAS PERMITTED.

þ ANDREW CARNEGIE WAS THE EMBODIMENT OF THE
  PHILOSOPHY OF INDIVIDUALISM.
 
 
 
 
 
 
 
 
 
 

7
 IN FUSFELD, FOCUS ON THESE LIVES
 
 

þ THOMAS HOBBES

þ JOHN LOCKE *

þ JEAN-BAPTIST COLBERT *

þ FRANCOIS QUESNAY *

þ ADAM SMITH *
 
 
 

þ DAVID RICARDO *

þ THOMAS ROBERT MALTHUS *

þ JEREMY BENTHAM *

þ ROBERT OWEN

þ JOHN STUART MILL *
 
 
 

þ KARL MARX *

þ VLADIMIR I. LENIN

þ JOSEPH STALIN *

þ HERBERT SPENCER *

þ JUSTICE STEPHEN J. FIELD *
 
 
 
 
 
 
 
 
 
 
 
 
 

8
 IN FUSFELD, FOCUS ON THESE LIVES
 
 
 

þ ANDREW CARNEGIE

þ THORSTEIN VEBLEN *

þ POPE LEO XIII

þ THE FABIAN SOCIALISTS

þ MARY WOLLSTONECRAFT
 
 

þ JANE ADDAMS

þ AYN RAND

þ JOHN MAYNARD KEYNES *

þ JOHN KENNETH GALBRAITH *