Critical Writing Assigment 4

1872 words 8 pages
Critical Writing Assignment 4: Free Markets: Classical Economic Definitions & Perspectives
Professor Marlo Chavarria
201420 Spring 2014 ECON 350-D02 LUO
Cameron L. Atkinson
Student-Liberty University Online

This essay examines the concept of a free market and the various interpretations of classical economists. The author begins by defining a free market from a classical perspective. He then proceeds to examine the interpretation of David Ricardo, which leaned somewhat to laissez-faire economics, the interpretation of John Stuart Mill, which was complex and indecisive, and the interpretation of Karl Marx, which argued against the concept of a free market. The essay concludes by discussing the complexity of the debate
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In consideration of this, a free market can be defined as a system where individuals, unhampered by artificial stimulus such as government controls or other individuals’ deceit, can freely pursue their self-interests through the process of transactions (Zupan, 2011). This allows for the fulfillment of government’s necessary role in the economy without corrupting the fundamental principle of a free market.
David Ricardo on Free Markets David Ricardo’s view of a free market was probably the closest that any classical economist came to espousing a laissez-faire economic system (Davis, 2002). Ricardo fiercely opposed government intervention in the economy and only acknowledged grudgingly that government does have a legitimate role in the economy. While the issue of a government providing artificial stimulus to the economy was clear to most of the classical economists, Ricardo defined the artificial stimulus that an individual could generate (Davis, 2002). In the Ricardian Rent Theory, Ricardo maintained that a landlord could artificially stimulate the economy by passively reaping from the labor of others (Davis, 2002). This would take capital out of the market and would also give the landholding class a controlling stake in the economy. Ricardo acknowledged that it is financially advantageous for a person to engage in these activities; however, he argued that the practice of renting hindered an economy from achieving “perfect competition”