10/06 Laissez Faire and Eugenics

Key Concepts:
- Differentiation between value and price
- Natural Price: Described by Adam Smith, this is the intrinsic worth of a commodity based on the cost of production, including labor, resources, and overhead costs.
- Market Price: Fluctuates based on supply and demand dynamics in the marketplace.
- Smith's View on Prices:
- Believed prices would gravitate toward true values under ideal conditions but acknowledged that this would not always happen.
- Ethical Position:
- Strong opposition to greed and unethical business practices like profiteering and price gouging.
- Advocated for a just society where all members could live reasonably well.

Inconsistency in Smith's Perspectives:
- Lacked clarity on how labor value should be determined.
David Ricardo's Clarification:
- Defined labor value similarly to other commodities:
- The natural price of labor corresponds to the costs associated with maintaining a laborer’s life without any surplus.
Thomas Malthus' Contribution:
- Suggested that natural price maintenance would be influenced by market forces that manage supply and demand.
- Possible market interventions (famine, disease, etc.) would reduce excess labor supply.
Jean Baptiste Say's Economic Model:
- Proposed that a closed economy would always achieve equilibrium between supply and demand.
- Promoted the idea of laissez faire—minimal government intervention in economic affairs.

Clarence Cook Little's Role:
- President of the University of Michigan and the American Eugenics Society.
- Advocated for eliminating hereditary diseases and unfit populations through eugenics methods.
- Public statements emphasized preventing the production of 'unfit' individuals and their support at public expense.

Critique of Wealth Inequality:
- "All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
Role of Civil Government:
- "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all."
Flourishing Society Definition:
- "No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable…"
- Equitable share of produced most be sufficient for people's well-being.

Wage Disparity Dynamics:
- Workmen aim for higher wages, while employers seek to minimize wage payouts, leading to an ongoing struggle.
- Historical patterns indicate that employers generally hold the upper hand in wage negotiations.

Ricardo's Law of Labor:
- "Labor, like all other things which are purchased and sold, and which may be increased or diminished in quantity, has its natural and market price. The natural price of labor… enables the laborers… to subsist without increase or diminution."
Malthus on Population:
- Suggested a geometric increase in population compared to an arithmetic increase in resources dictating labor demand dynamics.

Jean-Baptiste Say's Principles:
- Supply Creates Demand:
- Stated that supply inherently brings about its own demand when produced.
Dependency on Product Creation:
- The act of producing any product immediately opens consumption opportunities for other products.

Supply and Demand Interaction:
- When demand does not meet the labor population, wages decline, causing the most disadvantaged to perish, which eventually decreases labor supply, thus increasing wages.

The teachings of Smith, Ricardo, and Malthus reflect crucial historical perspectives on political economy, labor value, eugenics, and the delicate balance of supply and demand. Each author brings distinct insights that shaped moral philosophy and real-world economic practices.
The concept of laissez faire emerges as a critical philosophy in framing economic freedom against social intervention, with implications explored in subsequent discussions on health, welfare, and population dynamics.