Classical Economists and Their Philosophy Literature review

Classical Economists and Their Philosophy - Literature review Example All the terms are part of the business strategy which is actually and play a decisive role in constructing marketing tactics (Stigler, 1957). The classical economists had always talked about business tactics. The idea of growth and competitor business strategy is part of their explanation. Here are some who described economics and behavioural finance in all different perspective: Among major terminologies of economics, the classical economists have given much importance to the term â€Å"Competition†. Competition is something that surrounds the basic business environment, in which there are competitors, consumers and the market. Entrepreneurs call it a â€Å"business constraint†, as it changes for the success or failure of business at the same time. The economists have provided several teachings in understanding the term â€Å"competition†. This is for the business strategists and those who seek technical strength for competing in the market. In the late 19th cen tury just after World War II ended, the term â€Å"competition† was felt in different occasions of the business culture. The business strategists discussed it on all intense occasions of the business and tried to fit it in different situations like in a situation of a â€Å"perfect market† or a situation of â€Å"business equilibrium† (balance of supply and demand). ... According to Smith, one is excessive supply tactics where the prices get automatically high for competition, while the other is fewer supply tactics where the prices increase and set a demand. This is how competition floats in the market, and the rivals plan according to the same effective strategy (Stigler, 1957). Adam Smith emphasized on following five conditions which set a competitive advantage of one entrepreneur to another: The competitors should work independently instead of working collectively. A competitor should attain an advantage by minimizing the advantage for the next competitor. The competitor should attain full knowledge of the market to attain a parallel advantage. The competitors are free to work on such knowledge. Resources should be vitally utilized in order to stabilize the presence in the market. The following above statements worked in the agriculture sector where there is no such â€Å"monopoly â€Å"according to modern economists. However, the idea of comp etition is quite clear in a general way as everyone knew how to race in an environment where the competition is simply to bid one another. This is the definition of â€Å"business environment† which modern economists summarize in their literature work (Stigler, 1957). John Elliott Cairnes and â€Å"Industrial Competition† J.E.Cairnes a pioneer of classical economist got labelled in Industrial competition. He described competition as a condition where there is an exchange of capital and labour between the Industrial partners. He focused on the environment of non-competing Industrial groups. In case of capital, his ideology got successfully applied as capital is easy to transfer and sacrifice, but in the labour, it gets hard because the workmen are solely dedicated to their specialized field and cannot compromise their profession in terms of extra remuneration or wage.