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The origin of economics
The origin of economics
The origin of economics as a science dates back to the publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith in 1776. Smith believed a market economy would generally bring individual self-interest and the public interest into harmony.
Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government’s place in that market economy?
Think about society’s need to choose amongst competing resources and goals. How does personal gain affect choices by individuals and government? Opportunity costs. While we want to do one thing, we can’t do others based upon scarcity and opportunity costs. Resources are finite. What about incentives as opposed to free offerings? What about trade?
The origin of economics as a science dates back to the publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith in 1776. Smith believed a market economy would generally bring individual self-interest and the public interest into harmony.
Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government’s place in that market economy?
Think about society’s need to choose amongst competing resources and goals. How does personal gain affect choices by individuals and government? Opportunity costs. While we want to do one thing, we can’t do others based upon scarcity and opportunity costs. Resources are finite. What about incentives as opposed to free offerings? What about trade?
Sample Solution
timpson and Taylor (2013, p.105) state that good governance of company âmust act in the best interest The origin of economics s of its stakeholders.â However, throughout Sir Phillip Greenâs reign of the company from 2000 to 2015, this was not the case. When Green bought the company in 2000 it had a £5m surplus in their pension fund, however by the time the company was sold in 2015 to Dominic Chappell this had dramatically changed to a £571 deficit. (Sky News, 2016) Pension regulators had repeatedly requested for the contrib The origin of economics ution to the pension scheme to be increased, however Arcadiaâs (Parent company of BHS) Chief Operating Officer refused to increase contribution beyond £6.5m. (Armstrong, 2016) Other proposals were discussed with Green by Pension Regulators to rescue the pension fund black hole, for example in 2014, Project Thor, which was a £110m rescue scheme considered to help with the pension deficit, was suspended after Green decided the scheme was too expensive. Project Thor was created to ensure that BHSâs 20,000 pensioners would have had a better outcome in terms of pension benefits. (Armstrong, 2016) According to the UK Corporate Governance Code (2018), in order for a company to be successful, sustainable and survive long term there must be a relationship between stakeholders and directors, which is based on respect, trust and mutual benefit. However, Green did not act in the best interests of 20,000 of st The origin of economics akeholders when Project Thor discussions was suspended. Furthermore, Sir Adrian Cadbury (1992) identified the underpinned reasons for why several organisations have collapsed (Stimpson and Taylor, 2013), including the collapse of Carillion, in 2018. (Thomas, 2018) In the case of Carillion, which was a construction company employing 43,000 people globally, collapsed with a â£1.5 billion debt pileâ. (Thomas, 2016) The origin of economics The collapse of Carillion was blamed on recklessness and greed, as they took on too many risky contracts, which turned out to be unprofitable. (Thomas, 2016) As well as this, Carillion were accounting for revenues early and accounting for costs late, which provided an unclear picture of their financial position. (Burgess, 2018) Stimpson and Taylor (2013) identified âunreliable financial reportingâ as one of the reasons which underpinned the collapse of organisations. In addition to, companies being run in the interests of executive directors, and not shareholders, as well as awarding themselves high remuneration packag The origin of economics es. According to an article by Financial Times (2016), Carillion were signing off on âhefty pay packages and bonusesâ even though they had not met key performance targets. Referring to the collapse of BHS, Green declared £423 million in dividends between 2002 and 2004 most >
timpson and Taylor (2013, p.105) state that good governance of company âmust act in the best intere The origin of economics sts of its stakeholders.â However, throughout Sir Phillip Greenâs reign of the company from 2000 to 2015, this was not the case. When Green bought the company in 2000 it had a £5m surplus in their pension fund, however by the time the company was sold in 2015 to Dominic Chappell this had dramatically changed to a £571 deficit. (Sky News, 2016) Pension regulators had repeatedly requested for the contribution to the pension scheme to be increased, however Arcadiaâs (Parent company of BHS) Chief Operating Officer refused to increase contribution beyond £6.5m. (Armstrong, 2016) Other proposals were discusse The origin of economics d with Green by Pension Regulators to rescue the pension fund black hole, for example in 2014, Project Thor, which was a £110m rescue scheme considered to help with the pension deficit, was suspended after Green decided the scheme was too expensive. Project Thor was created to ensure that BHSâs 20,000 pensioners would have had a better outcome in terms of pension benefits. (Armstrong, 2016) According to the UK Corporate Governance Code (2018), in order for a company to be successful, sustainable and survive long term there must be a relationship between stakeholders and directors, which is based on respect, trust and mutual benefit. However, Green did not act in the best interests of 20,000 of stake The origin of economics holders when Project Thor discussions was suspended. Furthermore, Sir Adrian Cadbury (1992) identified the underpinned reasons for why several organisations have collapsed (Stimpson and Taylor, 2013), including the collapse of Carillion, in 2018. (Thomas, 2018) In the case of Carillion, which was a construction company employing 43,000 people globally, collapsed with a â£1.5 billion debt pileâ. (Thomas, 2016) The collapse of Carillion was blamed on recklessness and greed, as t The origin of economics hey took on too many risky contracts, which turned out to be unprofitable. (Thomas, 2016) As well as this, Carillion were accounting for revenues early and accounting for costs late, which provided an unclear picture of their financial position. (Burgess, 2018) Stimpson and Taylor (2013) identified âunreliable financial reportingâ as one of the reasons which underpinned the collapse of organisations. In addition to, companies being run in the interests of executive directors, and not shareholders, as well as awarding themselves high remuneration packages. According to an article by Financial Times (2016), Carillion were signing off on âhefty pay packages and bonusesâ even though they had not met ke The origin of economics y performance targets. Referring to the collapse of BHS The origin of economics , Green declared £423 million in dividends between 2002 and 2004 most >
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