The Worldly Philiosophers Book Summary

We were able to skip two chapters in this book, Chapter 5: The Visions of the Utopian Socialists and Chapter 7: The Victorian World and the Underworld of Economics. The rest of the chapter summaries are posted. Have a great time reading Mr. Gleekenstein!!!!

Chapter 1: Introduction

The main subject of the book Worldly Philosophers is summarized in the introduction. It tells us that the book is about the main philosophers in the world’s history, which have impacted our lives and today’s society dealing with the thoughts on the distribution of wealth. The only philosopher that is mentioned in the beginning of the book is Adam Smith, as he inspired the philosophers later to come.

Chapter 2: The Economic Revolution

This chapter talks about the beginnings of economics. It describes the factors used in order to keep an economy. In order to keep an economy it needs people to accomplish things. If people decide to stop farming then we would no longer have farmers to plow crops and keep track on animals. Before the days of production and distribution there were two types of economy, tradition and command. Tradition is when you pass a job down through generation. If you were a miner your son would be a miner and so forth. Tradition was mainly used during the period of the middle ages. Command is when the order comes from a higher dictatorship like a king. The people do what the dictator says. For example Ancient Egyptians, the reason why pyramids were built was because the pharaoh ordered the people to build them. Throughout history one of these two types of economy has been able to survive our economic history. The one that is used today is the market system. The market system allows people to produce and distribute for their own self gain. This is prompted in the attempt to gain goods. This type of system was brought about during the economic revolution.

Chapter 3: The Wonderful World of Adam Smith

Adam Smith was alive during the 1700s. He taught at the Oxford University and then University of Glasgow. While Smith became a tutor for Charles Townshend’s stepson, he got to meet the thinkers of the age of Enlightenment. While being away he worked on his greatest known book Wealth of Nations. He completed ten years after his return back to Scotland in 1776. The book wealth of nations is now compared to as an encyclopedia. It not only discusses economics but the origin and use of money. The reason it is such a success is due to the understanding of the picture of economics. Out of Smiths accomplishments were his four laws. How society can depend on capitalism, with his laws on the market. That people are driven for the use of wealth and profit gain allows us to use human motive on performing tasks. Therefore the first law would be summarized as self interest or profit motive. Secondly we question on how our selfishness allows us to benefit in society. This is due to competition; it allows the person it competes with other competitors in order to earn the profit they want. This allows the person to not over charge society in keeping an equal economy. The law of accumulation means the accumulation of profit. With the allowance of profit gives people additional money in order to buy better machinery which means less work and more production. Giving workers a higher income. The fourth law is the obstacle of population. Labor is a demand in the workforce, with the use of higher wages is the tendency to have an increase in workers. This sets the pace of wages becoming lower once again allows profits to rise. This allows conditions to eventually improve, and more accumulation. These laws allow not having a perfect world, but a world where poverty and wealth eventually balance out.

Chapter 4: The Gloomy Presentiments of Parson Malthus and David Ricardo

Parson Malthus and David Ricardo were spokesmen for Adam Smith school of Classical Economists. Malthus and Ricardo were always disagreeing on every view about economy except the dangers of overpopulation. Although there differences they always kept a high regard for one another. David Ricardo was a Jewish stockbroker. He was a well respectful man and earned the title, the man who educated commons. With Smiths optimistic look on economics Ricardo wrote a book named the principles of Political Economy, which gave a more pessimistic look. He was a theorist who had a very dry and pessimistic look on Society. Malthus was not successful like Ricardo. He spent most of his time on research, than looking for a financial being. He just wanted to be practical in his economic views.

Chapter 6: The Inexorable System of Karl Marx

Karl Marx was born in the 1800s in Germany, to a Jewish family. He attended the University of Berlin, and University of Bonn. His father wished that Marx would study law, but instead he studied philosophy and became very interested in Hegel’s ideas. He wanted to teach but his views were liberal, his main beliefs were constitutional government and atheism. Instead he turned to journalism and edited the newspaper Rheinische Zeitung, but then went into studying politics and economics. In 1844 Marx became good friends with Friedrich Engels, and they worked on the book The Communist Manifesto. This book soon became the program to Communist League. During his life in England, living in poverty he spent large amounts of time looking at data on economic manuscripts which soon formed his book, Das Kapital. This has different purpose than his first book. Marx came up with the principle of dialectical mechanism. He also predicted many trends capitalism would follow, which have come true. The predictions were called the laws of motion. As the economy grows, profits decrease within the business and cycle and outside. As the profit falls, business is looking for more techniques to survive by innovation, inventing, and experimenting. Soon businesses run into cycles of depression. Huge firms dominate businesses and end smaller firms. Lastly the working class overcomes factory owners and capitalism is ended.

Chapter 8: The Savage Society of Thorstein Veblen

The effects of the Industrial Revolution spread throughout Europe and to America. The United States enterprise was totally different than Europeans laissez faire. Men such as William H. Vanderbilt, John D. Rockefeller, and J.P. Morgan devoted their life’s to ruining the men that could verify their worth through business triumph and money, which became the authorization for access to the upper class. J.P. Morgan’s attitudes lead the robber barons in their public dealings, “I owe the public nothing”. Through the beginning of the 20^th century, dishonesty became an asset, shareholders became naive fools, and the stock markets became private casinos, in which the public funded. For example, Rockefeller and Rogers’ purchase of the Anaconda Copper Company resulted in a profit of $36,000,000 by paper exploitation and lacking a cent of personal venture. Viewed by economists who perceived this incident as tranquil, later somewhat apologized and shared the common blindness that they were too secure in order to judge without bias. Thorstein Veblen was the outsider that was an unapproachable cynic that was needed in order to make an unbiased call.

Chapter 9: The Heresies of John Maynard Keynes

The “Great Crash” of 1929 was when the stock values reached an unprecedented high before it came tumbling down. There were no warnings that anyone could predict that this type of disaster could occur. However, this was quite the opposite; success was everywhere starting for the deprived clerk all the way up to President Hoover. Throughout the United States, there were 45 million jobs, a $77 billion total income, and an average family enjoyed the highest tradition of living. Magazines produced articles on how to get rich, which was the procedure to save a fraction of a person’s earnings and invest them frequently into a good widespread stock. Everyone listened and hurried to place their requests on the stock exchange, as they could only purchase “on margin” for as small as 10 % in cash. On the other hand, there were ignored facts that there were two million people out of work, and the banks began to fall short at the rate of 700 a year. The distribution of income had put 24,000 families with an income similar to the upper class and around 6 million with the lower. Two months after the crash, losses in stock values were overwhelming and $40 billion disappeared. The fall continued while fortunes were lost and the rate of suicide rose. Individual businesses were obliterated and women worked for around 10-25 cents per hour. This is when the “Great Depression” arose. John Maynard Keynes, a respectable Englishman who was Alfred Marshall’s most gifted student, offered a solution of America’s problem. Keynes proved accommodating enough to make an attempt at solving the problem of permanent depression.

Chapter 10: The Contradictions of Joseph Schumpeter

John Maynard Keynes was a man who looked forward to capitalism having an improved period in the 21^st century. In his book, Economic Possibilities for Our Grandchildren, he anticipated that in 2030 the dilemma of equal distribution of wealth will be solved. Keynes later imagined a bright future for England; in 2060 the nation would make seven and a half times the riches of the past century. A brilliant student who studied more than Marc and Keynes was Joseph Alois Schumpeter. He was a determined melodramatic Viennese noble who was a Harvard professor. Schumpeter saw capitalism in the 20^th century in conditions of vibrant growth. However, he referred it to abolition in short.

Chapter 11: Behind the Worldly Philosophy

This chapter focuses on the accomplishments of economists. Along with the economist listed in the book, the economist that came close at hand to carrying out as an economic prognosticator was John Stuart Mill. Most theorists constricted their outlook and offered less than one choice for the future. Economic predictions are vague and unclear since economics contrast from scientific studies like physics or astronomy. Society exists in a world of change and its behavior isn’t predictable such as planets are. However, economists agree to estimate a universal picture of future tendencies instead of specific information. Prognostication is only possible with two conditions: behavioral regularities must oversee the lives of people and the product of the economy will manipulate society as one. These conditions show Schumpeter’s assumptions that capitalist will change into conservative officials. He was the first economist to announce that economics was less vital to human history than politics or sociology. Economists who were incapable of predicting how factory systems would change after innovative findings were people such as Adam Smith and David Ricardo, John Stuart Mill and Karl Marx. The growth of technology, the changes in society’s attitudes and behavior, and the facet that regularities of economics are no longer regular are three trends that economists could not have predicted. Economics are an exhilarating study of an aspect of what it means to be a human. It is still only one view of a multipart and ever-changing world representation.