Question

Identify the correct assertions regarding the contributions of Western economic thinkers.

1. Adam Smith, often called the 'father of Economics,' advocated for minimal government intervention in economic activities, a principle known as 'Laissez Faire'.
2. Karl Marx, in his work 'Das Capital,' argued that laborers receive the full value of their contribution, with profits going entirely to them.
3. Alfred Marshall emphasized that economic activities should be oriented towards promoting the welfare of society.
4. Lionel Robbins suggested that unlimited wants should be prioritized to ensure economic growth.

• A. iii only
• B. ii, iv
• C. i only
• D. i, iii

Answer 1

Answer:

D. i, iii

THE CONTRIBUTION OF WESTERN ECONOMIC THINKERS

Adam Smith – the father of Economics

• His book, “An Enquiry into the Nature and Causes of the Wealth of Nations” has laid a strong foundation for Economics.

• He described Economics as the study of wealth and wanted limited government intervention in the economic activities and argued for more freedom to individuals. This is known as the theory of ‘Laissez Faire’.

Karl Marx

• Marx gave importance to the role of labourers in the production process.

• The basis of production is the manpower of labourers and the price of a product is the reward for it. However, the labours get only a portion while the lion’s share goes to the capitalist as profit. Marx calls this surplus value.

• He dreamed about a society where there is no difference between the “haves” and the “have-nots”. The ideas of Marx are contained in his magnum opus ‘Das Capital’.

Alfred Marshall

• Economic activities must be welfare oriented. These principles are contained in his work ‘Principles of Economics’.

Lionel Robbins

• He suggested that we should prioritize our wants for the judicious utilization of limited resources