Terminologie économique anglaise

The aim of this class is to look at several areas of terminology which should help you in your studies of economics.

Each week, there are two activities.

1. Reviewing the vocabulary of the chapter.
2. Examining specific questions which may realize to the vocabulary or possibility to something in the economics news.

Reviewing the pre industrial economics vocabulary’s is helpful to understand how our own societies developed.

But it is also used because we can see similar development processes still occurring in other parts of the world.

Obviously, not all countries are following the same linear process, indeed, for about 30 or 40 years after world war II, this linear process was often strongly criticised for being too western: for being a kind of post-colonial imperialism.

Alternative development strategies were tried. Some were based on concepts of ‘’big-push’’ development, accelerated progress by leap-frogging early stages of development. The hope was to create advanced industries quickly, based on planning. ( as has been elaborated especially in the soviet union).

Other strategies were based on the idea that ‘’small is beautiful’’, and the importance of concentrating on ‘’basic needs’’.

These alternative strategies however were not always very successful, and with the spectacular development of south-east and east Asia ever the last 40 years, development economics has in many ways become more orthodox or mainstream. And the idea of a more linear approach seems much stronger today.

There’s a present interest in reviewing the vocabulary of pre industrial economics and societies.

The primary sector still plays an important role in many countries. In some economies, many people are still working on the land: they tend to be very poor.

Food and agriculture is still also an important sector un the advanced economies because it involves quite a lot of industry in food processing.

Also, some advanced countries (e.g Canada and Australia) are quite strongly dependent on the export of primary products (things like oil, coal, iron ore, wood, foodstuffs).

For industrialisation to take place, a society usually needs to experience significant increases in agricultural output, so that workers in manufacturing or industry can eat.

This was true in Britain in the 18th century, when there was an agricultural revolution. It was true in much of the developing world in the 1960’s and 1970’s, when the ‘’green revolution’’-based on fertilizers, irrigation and new crop varieties- greatly increased output, in countries like India.  

Finally, it was also true in china, in the early 1980’s, when china’s initial economic reforms led to a large increase in agricultural production.

The emergence of markets and commercial agriculture is essential to this process: food crops (and other cash crops like cotton, coffee, rubber, etc.) can be produced and sold into markets. they become commodities.

The main general meaning of ‘’commodities’’ is raw materials.

what was the first activity/industry to develop in the individual revolution?

Industrialisation is usually attributed to the emergence of textile manufacture in Britain and Belgium, towards the end of the 18th century.

Today still, the establishment of a textile industry is often the first step to development and industrialisation. There are two reasons for this. First, demand is always quite strong: we need to buy new clothes, because they wear out, and we like to wear new things. Also everyone in the world consumes clothes.

Textiles-clothes especially- are relative easy to produce, and above all they require a lot of labour. It has not been possible to automate the production of clothes you need workers sitting behind a sewing machine. That is why textile production migrates to countries with cheap labour.

Traditional societies are usually very rigid, class-based societies, with large landowners, and many poor peasants or agricultural workers.

You would have no regrets in not living in a traditional society: especially if you are a woman.

According to August Deaton, the Nobel prize winner in economics in 2015, there’s a clear correlation between income levels and wellbeing.

2nd course: Early Economics

Adam Smith is generally held to be the founder of modern economics. Writing in the late 18th century, he described numerous economic phenomena which are seen to be at the heart of the market mechanism and capitalist economic production.

To begin with, Smith notes how economic activity – and more specifically manufacturing output- may be enhanced by the division of labour. By splitting up the production process, the output of labour may be increased as tasks are simpler to learn and time is saved in moving from one activity to another. Look at documents online.

The core belief of economic liberalism is that markets lead spontaneously to a harmonious state of coordination.

This is the central belief, and everything which prevents markets from operating freely is an anomaly, and prevents such harmonious coordination. (it’s a little bit exaggerated)

Markets will allocate the use of resources efficiently.

For Adam Smith, this was the invisible hand. The following passage shows it clearly: look at the document online.

This is a clear and perfect example of the believed benefits of economic individualism. If economic agents pursue their own happiness (utility), they will contribute most to the happiness of society.

...