Development in economics Adam Smith ( Free market )

Marxism ( Division of labour)

Gunder Frank ( Dependency Theory)
John Maynard ( Real Investment)
Adam Smith ( Free Market)
- a free market is a summary term for an array of exchanges that take place in society
- agreement between two parties who trade in the form of goods and services.
- free market exists since there will always be government intervention in the form of
taxes, price controls and restrictions that prevent new competitors from entering a
market. Just like supply-side economics, free market is a term used to describe a
political or ideological viewpoint on policy and is not a field within economics.

Marxism ( Division of Labour)
- Marx's view of the development of the forces of production rests in his view of the
dynamics of social division of labour as interrelated with that of division of labour
in particular processes of production and with technical progress.
- According to Marx, the production and circulation of commodities are a prerequisite
of capitalist production as the latter presupposes a certain degree of development of
the process of exchange and of social division of labour.
- In capitalist production extends and intensifies social division of labour; as he
establishes, "this mode of production, once it is assumed to be general, carries in its
wake an ever increasing division of social labour" (Marx, 1893, p. 33).
-The two-sided nature of manufacture as a restriction in the development of
capitalist production and as fundamental basis of such a development is evident in
Marx'sanalysis in the chapter on "machinery and modern industry"


1. Dependency Theory (Andre Gunder Frank)
- Dependencies explain of the economic development of a state in terms of the external
influences (political, economic, and cultural) on national development policies.
- Dependency mean historical condition which shapes a certain structure of the world
economy such that it favors some countries to the affect the others and limits the
development possibilities of the subordinate economics.
- 3 common feature to this definition most dependency theorist share.
- First, dependency has 2 sets of states, variously described as dominant/ dependent,
periphery.
- Second, both definitions have in common the assumption that external forces are
singular importance to the economic activities within the dependent states.
- Third, dependency is all indicate that the relations between dominants and dependent
states are dynamic because the interactions between the two sets of states tend to not
only reinforce but also intensify the unequal patterns.
- For Frank, the concepts of development and underdevelopment have meaning only
when applied to nation within the capitalist world-economy.
- Frank envisions this world-economy as being divided into two major components,
metropolis and satellite. These concepts basically equivalent to Wallersteins (1974)
concepts of core and periphery. The flow of economic surplus in the world-economy
is from the satellite (or periphery) to the metropolis (or core), and the world economic
is organized to make this happen.
- The underdeveloped nations therefore have become and remain underdeveloped
because they are economically control by develop capitalist.



2. Keynesian Economic Theory 2 (John Maynard Keynes)
- Government to play much large role in the economy. His vision was one of reformed
capitalism saved both from socialism and from itself.
- Somewhat comprehensive socialization of investment and the states taking an ever
greater responsibility for directly organizing investment.
- Making decision would remain with the decentralized market rather than with the
central planner.
- Keynes provided both a specific rationale for government taking a bigger role in the
economy and more general confidence in the ability of government to intervene and
manage effectively.
- Behind Keynes attraction with uncertainty and his speculative talents in the
marketplace, Keynesian deemed government knowledge is superior to that of the
marketplace.
- The popular theory General Theory Keynes had written, the power of vested is
vastly encroachment of ideas.
- Keynesianism in its conquest of the commanding heights of economic thinking.











Reference
Marx, K. 1893. Capital. A Critique of Political Economy. Vol. II. New York:
International Publishers. 1967
http://www-tc.pbs.org/wgbh/commandingheights/shared/pdf/ess_keynesiantheory.pdf
Emeh Ikechukwu Eke Jeffrey. (November 2012). Implication on Negerias development
situation. Greener Journal of Biological Sciences. 2 (3). 052 - 065.
(http://www.gjournals.org/GJBS/GJBS%20PDF/2012/November/Emeh.pdf)