Wednesday, May 29, 2019

John Bates Clark :: essays research papers

John Bates Clark     John Bates Clark was an American economist who lived from 1847-1938. Heplayed an important role in the development of marginal productivity, and had agreat influence on the development of economic thought in the United States.Clark was educated at Amherst College and at the University of Heidelberg inGerm either. He taught at Carlton College in Northfield, Minnesota from 1875 to1881. He then moved on to teach at Smith College, Amherst, Johns Hopkins andColumbia from which he retired in 1923.     In formulating the Neoclassical theory of the firm, John Bates Clarktook over the classical categories of land, labor, and capital and simplifiedthem in two ways, this simplification was the theory of marginal productivity.First, he sham that either labor is homogenous, which meant that one labor houris a perfect substitute for any other labor hour, but when marginal productivitywas decreasing, the industry free-base it more pro fitable to replace labor withmachinery. Clark believed that to make a sound economy wages had to be equal tothe marginal productivity of labor. This was also serious to both theindustry and the labor.Secondly, Clark ignored the distinction between land and capital,grouping together both kinds of non-human inputs under the general term"capital," which he then assumed that the broadened "capital" is homogenous.     John took this Neoclassical approach one step further than others inapplying it to the business firm and the maximization of profits. One of theresults was a theory of the diffusion which demonstrated that market outcomeswere just.     Clark also believed that technological change would lead to an increasein the standard of living which he felt was one of the chief goals of anyeconomic system. He felt that with this technological change, labor would bemore productive and lead to higher profits for industry. When the labor wouldsee that industry was making higher profits, they would demand its sh atomic number 18 of theprofits for their hard work. The labors higher wages and the industrieshigher profits would increase incomes and better the social living for everyone.     Among Clarks works are The Philosophy of Wealth (1886), TheDistribution of Wealth (1899), and Essentials of Economic Theory (1907).

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