So the catch up continues... Economics!
The first real economic text was Adam Smith's 'The Wealth of Nations'. In this, Smith claimed that too much state intervention caused Nations to become poorer, and claimed "the hidden hand of the market will make everybody richer". Smith believed that free trade and free individuals boost the economy.
David Ricardo - claimed that natural resources or objects have no intrinsic value, but that value arises when humans apply conscious effort towards an object. For example, a diamond attracts far more value than a matchstick, as it requires significantly greater human endeavour to create a diamond than a matchstick.
Thomas Malthus - The iron law of population - claimed that humans will always starve to death, and that civilised society is permanently on the brink of starvation. Claimed that marriage and chastity were solutions to this problem.
Karl Marx - Marx believed that the only source of value was labour, and that wages would decrease as the population increased, as a higher population leads to a higher demand for each job. This leads to the iron law of wages, which states that as this happens, workers wages will become lower than the price of the item they create. For example, if a 'widget' is sold for £10, then £5 will be taken as profit by the factory owner, and £5 will be given to the worker as wages. The worker then cannot afford to purchase the 'widget', and if the price is reduced, the wages must also be reduced to account for profit. If this is allowed to continue on a grand scale, it can result in over production and under consumption.
Keynes - Keynes' solution to Marx problem of the iron law of wages was to simply print more money. Doing so allows greater investment, and companies to pay higher wages. This of course meant moving away from the gold standard, the system by which the amount of money in the economy was directly proportionate to the amount of gold the country possessed.
However, printing more money is not a risk-free solution. It can lead to inflation and stagflation, as well as an increased role of the state, which by Smith's theory would cause the nation to become poorer.
Of course if everyone just keeps spending, no-one has a problem...
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