Week 10
Lecture
Global marketplaces and foreign debt
Key of capitalism: Capital and Production
From capital accumulation to production: birth of bourgeoise
Small scale production; on a workshop or household basis
Wage labour becoming increasingly common
Putting-out system (sub contracting work, provides raw materials to households, they use it and give final product, seller
sells it)
If you invest money then that money is capital and youre capitalist
Key of capitalism: Productivity
Macro and micro-inventions:
Flying shuttle
Spinning jenny
Steam engine
Water ark
Steam engine adopted into the looms and mass production in the factories
After mercantilism(restrictive trade practices): liberalism
Adam smith believes free market is essential
+ that if state doesn’t intervene in economy then the invisible hand will regulate the market
+ free people pursue their own interests in a free economic environment and personal interest will create social benefit
Liberalism and foreign trade: Smith
Theory of absolute advantage , foreign trade is inevitable
Critism of mercantilism on froing trade
+ production of areas nation excels and import where production inefficient
Makes foreign trade more profitable for everyone
Liberalism and foreign trade: David Ricardio (follower of liberal classic school)
Theory of comparative advantage
Even if there’s no relative absolute advantage in any goods, should specialize according to relative cost advantages to
benefit from foreign trade
Ottoman empire and foreign trade
Capitulations date back to 15th century
Referred to commercial priveleges: imtiyazat
Early modern period: priveleges limited in effect
After treaty of Baltiman, commercial rights granted thru trade agreements
Priveleges exetended to other countries eventually
Foreign debt during Crimean war
Lecture
Global marketplaces and foreign debt
Key of capitalism: Capital and Production
From capital accumulation to production: birth of bourgeoise
Small scale production; on a workshop or household basis
Wage labour becoming increasingly common
Putting-out system (sub contracting work, provides raw materials to households, they use it and give final product, seller
sells it)
If you invest money then that money is capital and youre capitalist
Key of capitalism: Productivity
Macro and micro-inventions:
Flying shuttle
Spinning jenny
Steam engine
Water ark
Steam engine adopted into the looms and mass production in the factories
After mercantilism(restrictive trade practices): liberalism
Adam smith believes free market is essential
+ that if state doesn’t intervene in economy then the invisible hand will regulate the market
+ free people pursue their own interests in a free economic environment and personal interest will create social benefit
Liberalism and foreign trade: Smith
Theory of absolute advantage , foreign trade is inevitable
Critism of mercantilism on froing trade
+ production of areas nation excels and import where production inefficient
Makes foreign trade more profitable for everyone
Liberalism and foreign trade: David Ricardio (follower of liberal classic school)
Theory of comparative advantage
Even if there’s no relative absolute advantage in any goods, should specialize according to relative cost advantages to
benefit from foreign trade
Ottoman empire and foreign trade
Capitulations date back to 15th century
Referred to commercial priveleges: imtiyazat
Early modern period: priveleges limited in effect
After treaty of Baltiman, commercial rights granted thru trade agreements
Priveleges exetended to other countries eventually
Foreign debt during Crimean war
