The Classical Economists - James Steuart and John Law - Essay Example

John Law unlike other economists supports the idea of paper money fronted by Bois-Guilbert. Law argues that by the advocating for use of paper money the cost of gold and silver will be radically reduced. Law’s assertion that the value of goods is independent of the quantity of money made meaning and answered questions on the freedom to purchase any quantity of a product at an agreed price or cost. In addition, Law believed that. If paper money was in use trade will be made easier and the level of demand and supply will be eventually influenced. On the other hand, James Steuart argues on the need for demand in the industry, which will result in a certain level of supply, which can take both regular and irregular trends. This situation creates competition in the market milieu and helps in increasing the quality of products in the most natural manner. This implies that with help of paper money, a product will be bought or sold at its value.

 Question 2

In the case of Allan Meltzer’s assertion on redistribution and sustainability, the problem of capitalism is created by unequal distribution of resources and income. This aspect does not only affect a particular group or class of people, but also the universal economic structure of a country. Meltzer asserts that capitalism has grown because of leaders’ hostility to reward their selfish interests. Meltzer argues that the wealth generated by the market system should be equally redistributed to ensure a strong economic foundation (O'Brien, 115).