Politics begins
at the time of the ancient Greeks more emphasis on the notion that the
discussion focused on the country. The thinkers of this period was Socrates,
Plato, and Aristotle.
Socrates introduced the term
theoria is defined as knowledge at that time. According to the state's duty is
to educate citizens with the principle of giving happiness to every community
and make their lives as good as possible. Plato had the concept of the ideal
state which is the philosophical implications of the doctrine concerning this
idea.hal illustrated through obsession and the purpose of life in developing
countries are organized and educated people. Furthermore, Aristotle dubbed as
the father of empiricism in politics. he explained that the classification of
the state should be done on the basis of the collection of facts that exist in
a country.
In addition to
the ancient Greek era, the classical political thought occurred in the Roman
civilization which is divided into two periods, namely the period of the
republic and empire. Post Ancient Greece is often the discussion and study of
world politics is Roman. At this time considered to be the heir of thought
Ancient Greek era, but this era is not too contribute to the development of
thinking and significant. However, there are differences in the implementation
of the theory of state at this time, in the Ancient Greece more emphasis on the
concept of a small country, but at this time a very broader scope. Because at
this time the state initiated empire, namely government more dominant and
extensive berteritorial once, regardless of the differences between people.
Additionally at
this time more focused on legal issues and administration as a condition for
strengthening territorial governance system is very extensive and Rome as its
center. Therefore, we can understand it that this Roman period over which a
state has to be an institutional perspective rather than Ancient Greece.
The history of
western thought is divided into three periods, namely classical, middle and
modern. Classical age stems from Ancient Greece until the 5th century, medieval
from the 6th century to the 15th century and the modern era of the 15th century
until the 19th century. Two political events namely the collapse of the Western
Roman (476 AD) and the collapse of the Eastern Roman (1453 AD) is considered as
a milestone in the separation between classical times to the Middle Ages and
modern times.
Background
classic appearance, began when the French Revolution which makes the transfer
of power from the state authorities, the kingdom and the church. Royal party no
longer dominates, but switched to the merchant (merchant). This is because the
era of inter-state trade, where countries that managed to have a surplus of
gold, considered a rich and prosperous country. Later in the merchant's
development cooperation with the government (state) resulted in fraudulent
practices and make more profitable merchants and rulers. This era is often
referred to as mercantilism. A small number of people such as farmers, fishermen,
miners were oppressed as a result of the system in favor of the merchant. This
is what underlies the emergence of the doctrine of liberalism where each
individual has the freedom to enter the market either as producers or
consumers. Besides the limitation of the role of government and politics into
the market as it would result in such an era of mercantilism in which only
certain parties and that have close relations with the authorities who
benefited.
Among other
influential figures James Steuart who published his work entitled An Inquiry
into the Principles of Political Economy (1767) and Adam Smith who authored An
Inquiry into the Nature and Causes of the Wealth of Nations (1776 Adam Smith's
book is what underlies the emergence of teachings liberalism and the market
economy. David Ricardo is one of the classic figures who also wrote The
Principles of Political Economy and Taxation (1987).
This view sees
the individual as a human being as a rational being, and will choose the best
alternative for him. So it will try to get its business in order to maximize
the fulfillment of personal interests.
Classical flow
that develops is a classic liberal approach. See the market as a meeting place
between producers and consumers. Each party to work for his personal interests
but attempted to suppress the occurrence of conflict between them. So it will
appear in the market price mechanism, where the invisible hand that regulates
the process of supply and demand and will bring the market balance
(equilibrium).
Understand
classical view state should not interfere in the affairs of the market. State
could be considered to disrupt the dominance of the market because often the
government would only benefit certain parties only. Countries only play a role
in protecting people when conflicts both internal and external conflicts. In
addition, the country serves as a good service provider's infrastructure, as
well as public facilities and infrastructure for the continuation of market
mechanisms in the country.
The relationship
between the state and strictly separated markets, although market senidir
resides in the state system. Because the market is considered as a system that
can regulate and run automatically with the invisible hand earlier.
The classical
view has drawbacks in practice so difficult to separate the role of the state
to politics. Then the market mechanism, invisible hand is a difficult thing
because it is often not selamnya dijelaska buyers and sellers meet in a single
market. Besides if there is a monopoly of the market, so when the government is
forbidden to intervene in the market, the community also will be harmed.
Neoclassical
Berkembangan
neoclassical manakalah they feel there is a flaw in the classical liberal
thought and no operation of the market mechanism masrxis teachings. Classical
liberal illustrates that the presence of invisible Handa then automatically be
run in accordance with the market mechanism when the market can not be left
entirely to the market mechanism. While their views on the socialist market
controlled by the government are also not approved by the neoclassical view. So
neoclassical seeks to unify, where the market may be free, but there are times
when there is a defect or negative mechanism in the market then the market
intervention is needed to restore the functioning of the market.
One of which
Alfred Marshall characters with some major works, among others, The Pure Theory
of Foreign Trade (1829), The Principles of Economy (1890), Industry and Trade
(1919) and Money, Credit and Commerce (1923). Gossen and JB Clark is also one
of the developers of neoclassical economics. Karl Menger's work is primarily
Grusatze der Volks Wirtschaftslehre (1817). Eugen von Böhm-Bawerk with his work
is an Interest Capital (1884) and the Positive Theory of Capital (1889).
Friedrich August von Hayek also made the book's Monetary Theory of The Trade
Cycle (1929), Profit, Interest, Investment (1939) and The Pure Theory of
Capital (1941).
Together with
classical neoclassical see the individual as a free man and trying to get their
needs met to the fullest. The difference with the classic look lies in the
perspective of market mechanisms. That in the market when individuals are free
to become producers and consumers will bring their monopoly of both collective
and individual goods, it is what is called market failure. So the role of
government is needed to prevent the occurrence of monopolistic practices in the
market as well as the action of government bureaucrats in power function. With
government intervention is expected to fix a problem that can not be solved in
the market mechanism.
The forms of market failure:
Monopolistic,
but when the seller many types of goods in circulation almost the same and
similar. So that when the product is not there, it can be replaced with another
product. This led producers can not menentapkan prices at will because of the
many manufacturers that also offer competitive prices. Examples: soap, laundry
soap, toothpaste, cosmetics and beauty products, clothing.
Oligopoly occurs
when the number of producers slightly. Outstanding goods generally have some
other differences but differentiated so that producers could also have the
power to control prices. Examples such as cement, fertilizer, personal vehicle.
Monopoly is unfair competition because there is only one manufacturer in the
market. So the price can be determined in accordance with the wishes of the
manufacturer. Examples such as petroleum, electricity, telephone.
The relationship
between the state and the market that the country is a party that can solve
market failures such as the failure of the market mechanism preformance.
However, the government's role was limited to resolve such market failures and
remain prohibited intervene when market mechanisms taking place without any
problems.
In development
is often described as neoclassical economic development where
economic-mathematical social sciences-humanities must release the identity
humanisnya and calculate trade-offs in formulas and mathematical. Government
intervention only in the correct market failures lead to public welfare is not
a priority in the development of economics. Economics is defined the same as
the individualist concept of making each individual will pursue profits alone.
So neoclassical criticized due distanced justice and welfare.
Keynesian
Keynesian idea
is similar to the Neoclassical where perkembngannya arising kegaglan of Liberal
concept in the market mechanism. When the Great Depression (Great Depression)
where the collapse of stock prices on Wall Street that makes convulsions of the
world economy. Keynes saw that liberalism was not always able to cope with the
market mechanism. The absence of regulations made by the government
memgakibatkan market exploitation by certain parties. So the role of government
is needed in emnagatasi market failure.
Figure book The
General Theory Keynes (1936), Hayek Treatise on Money (one of the figures who
also developed the Neoliberal). Keynesians see the individual as a whole
society whose existence needs to be protected by the state.
Keynesians see
in the market mechanism, that liberalism makes manufacturers will continue to
create and produce the goods on an ongoing basis. This resulted in an increase
in offers that are not accompanied by an increase in purchasing power in the
purchase of goods. This is what led to the failure of the market, and market
instability.
State role in
maintaining the stability of the market mechanism. That is ketidaka market
instability and the failure of the role of government is necessary to restore
the market conditions. However, when the market mechanism was normal and
stable, the government prohibited from intervening. Governments need to ensure
the welfare of its people, so that when the economic shocks that threaten the
prosperity of its people, the government needs to do the regulation. If there
is a recession due to lower aggregate demand, the functions of the state to
prevent and correct them. Interventions that could dilakukanuntuk conduct
economic stabilization is to strengthen the financial sector, the stabilization
of prices and take advantage of the government's fiscal policies.
Keynes which saw
an increase in productivity accompanied by a rise in the demand for labor is
one of the things that are generally rare because when production increases,
generally the manufacturer will seek to improve the efficiency of the workforce
so that the gains can be maximized. Can also contribute to improving the use of
high-tech business production without the need for an increase in the workforce
to be more efficient.
