economics as a scientific study evolved from the works of the moralists, philosophers, traders and lenders. By the XVIII century, the works of the Merchantilist, like David Hame emphasize the importance of foreign trade and of the Fisiokrat like F Quesnay, pioneer of inter-industry tables that are considered very important for the development of industry and agriculture. Two of this doctrine is strongly influenced by events at the time of trade development and industrial growth and revival of the agricultural revolution.
In the mid-eighteenth century came the second half of the flow of the Liberal Economy (Classical), which was pioneered by Adam Smith. Adam Smith, considered the Father of Economics. Any society, whether countries that have been developed or developing country, whether urban or rural community people, all the economic problems facing three fundamental and interrelated that must be disclosed, namely:
1. Commodities what to produce and how much.
How many goods and services must be made and when made, whether we should make more food than on clothes or vice versa.
2. How is the commodity produced, performed by whom, using the factors where and with what technique.
3. For whom the commodity is produced, anyone who benefit from the existence of these goods and services, how the national product is distributed to everyone.
Principal economic problem includes options related to (1) consumption, (2) production, (3) distribution and (4) growth over time. Consumption; members of the public are urged to determine the type of goods and services they want to use and is consumed. There is also a matter of choice between goods that are used in private and provided by government such as roads, irrigation and defense.
Production of goods and services produced by using various modes of production depending on the level of production technology. Thus how the use of raw materials, equipment (capital) and labor to various kinds. Distribution; how the output (output) in the form of goods should be distributed among the various owners of the means of production, labor, capital and land. Growth over time, developing countries should pay more attention to growth, the growth of important means for achieving the level of development (prosperity) is higher.
Historians and social scientists have long noticed differences in the level of economic growth among the nations. Some older theories emphasize climatic factors and argued that all developed countries in temperate climates. The view further emphasis on indigenous factors, culture or religion as the major determinant as a powerful motivating force that drives to achieve prosperity.
Indeed, these theories is true to some extent but still many remain unexplained. In order to understand the diversity of economic journey, we must turn to a broader explanation. Over the last few decades economists are very interested in economic growt
W.W. Rostow put forward a theory that divides the economic growth in several stages, namely:
1. Traditional society
2. Prerequisites for take-off
3. Takeoff
4. The movement toward maturity (the drive to maturity)
5. High mass consumption
Rostow The analysis is based on an analysis of economic and non-economic analysis that led to the economic growth of a society. Stages of economic growth actually be based on the dynamic state of demand,
supply and production patterns. elements of growth in developed countries and countries
developed was not different, just different levels of needs and scarcity of production factors. Engine of economic progress moves on four wheels, namely:
1. Human resources (labor availability, population, discipline, motivation, and others)
2. Natural resources (land, minerals, fuel, climate and other)
3. Capital formation (machinery, factories, highways, and others)
4. The level of technology (knowledge, engineering, management, entrepreneurship and others)
Developing countries should pay attention to the quality of human resources at their disposal. The planners of economic development usually always make a specific program, namely the eradication of disease and improved health and nutrition, as well as improving the quality of education. educated people will become more productive workers, because it berkernbang countries must invest huge funds for education programs.
In poor countries, the workforce in many rural areas that are not productive, not because they do not want to work, but because not enough land and capital that can be worked effectively. In developing countries, a valuable natural resource has not been excavated, the most important natural resource is agricultural land, therefore the utilization of agricultural land must be productive, followed by conservation programs, proper fertilization and Cultivation
to raise capital funds required the sacrifice of consumption for several decades, but the problem of developing countries already on the verge of subsistence living standards. to reduce consumption will again cause huge economic woes.
The fourth factor is a vital technology. Developing countries have the potential to utilize technical skills developed countries. Seeing Japan and the United States experience, it appears that technology adaptation is an easy recipe, although not that easy for other countries. experience shows that entrepreneurship is needed
(entrepreneurship) for advanced technology ideas that can be run successfully.
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