History of Economics the Role Essay

But the home was very important for other reasons, again overshadowing the economy. Now people buy homes based on where they can find jobs, or even experience forced moves from their jobs -- this would have been unthinkable then.

A third interesting factor of early economies is the goal of self-sufficiency that individuals had. Large amounts of wealth were not really attainable, and the basic goal of the time was to have everything you needed. This was the definition of success, whereas poverty meant you were dependent on someone else, not just underprivileged. This leads to a fourth point Polanyi makes, specifically about kinship-organized societies. These groups especially tended to have little extraneous wealth, so there were very few exchanges that actually changed economic status. Such exchanges almost always marked major occasions, like proposals and/or weddings. The principles of exchange in these times were either utilitarian or symbolic, and not part of the gray area they occupy today.

3) the Balance of Trade period of mercantilism was a long-running and concentrated effort made by the major governments of the world to protect their own economic interests and those of their citizen merchants. In fact, at this time it was thought that whatever was good for an individual merchant was also good for the nation. Different policies were employed that had different ways of balancing trade and increasing profits, with different effects on the economy both for the merchants themselves, and for the rest of a country's population.

The balance of trade referred to efforts to keep the level of exports balanced with -- or more preferably above -- the level of imports, so there would be more wealth flowing into the country than out of it. In addition, countries would try to import mostly raw materials, which were cheaper, and export the more expensive finished products that had the added value of work. Thus, the rise of capitalism and mercantilism is intimately tied with the beginnings of industrialization.

These policies worked in theory and largely in practice because of the New World, which provided a market for finished goods and a supplier of raw materials -- otherwise, with all trading partners practicing the same technique, commerce would have stalled. Profits from the New World and domestic production controls were enormous, but there were also losses associated with the new system. For one, the general populous became more devoted to work, and often had fewer luxuries. Wages were kept as low as possible and the price of domestic goods as high as possible in order to ensure that workers would need to put in long hours, increasing production and therefore profit even more. The system of trading also imposed tariffs on imports, and often merchants had to deal with foreign tariffs on exports, which could frustrate many business…