Age of Enlightenment
A period (roughly 1700-89) when political, economic, and social thought was dominated by an optimistic faith in reason and in the progress of the human race.
Mercantilism
The doctrine which dominated European economic policies from 1500 until the advent of laissez faire through a program which stressed that the real wealth of a nation resulted from its stores of gold and silver, which could be acquired by an excess of exports to imports, self-sufficiency of the nation, and exploitation of colonies.
Physiocrats
A group of thinkers during the Age of Enlightenment who opposed mercantilism, believing instead that the true source of wealth derives from land and agriculture; they advocated the doctrine of laissez faire.
Francois Quesnay (1694-1774)
French economist who founded the school of Physiocrats and greatly influenced Adam Smith.
Laissez Faire
Literally, "let [it] function"—the economic doctrine founded by Quesnay and the Physiocrats and expounded by Adam Smith, stressing no governmental interference in the operations of the market economy.
Three Historical Stages of Capitalism:
1. First Stage (1450-1750) "Commercial Capitalism," when profits depended on the transportation of goods.
2. Second Stage (1750-1870) "Industrial Capitalism," when profits depended on manufacturing. This stage coincides with the Industrial Revolution.
3. Third Stage (1880-present) "Financial Capitalism," under which profits are derived from the investment of money.
Industrial Revolution
The transition from the stable agricultural and commercial society of the Western world to the modern industrialized society; the second stage of capitalism.
Enclosure Movement
The practice of fencing off lands formerly subject to common rights in order to provide pasture land for sheep. This movement caused a shift of the poor in England from farms to cities.
Patron Saint of Free Enterprise
Adam Smith.
Father of Modern Economics
Adam Smith.
Classical Economists
The economists who preached the doctrine of laissez faire and stressed that the production, consumption, and distribution of goods and wealth are determined exclusively by economics laws and principles.
