UNIVERSIDAD COLEGIO MAYOR DE NUESTRA SEORA DEL ROSARIO FACULTY OF INTERNATIONAL RELATIONS CLASS: INTERNATIONAL POLITICAL ECONOMIC PROFESSOR:

RALF LEITERITZ STUDENT: HCTOR ANDRS DAZ Bogot 13/04/2011 Words: 809 Since the beginning of rationality, man, has always had to face the problem of distribution, and this problem comes with a duality, that sometimes may be seem irreconcilable; efficiency and equity. The essence of an economist is that of a calculator been, that is aware of a catastrophically environment where the forces of the market and the shortage of resources are prevalent, above all human possibilities, and the best way to act is to distribute all in the most efficient way. That is, in a few words, what the guardians of rationality are all about, but it is a bit heartless. A trustee of the poor is to be conscious of all that have been said, but to go beyond, to think in a more responsible way and to search not only for the most efficient way of distribution, but also the most just way, of doing it. A trustee of the poor is an economist that has a high value for life and has strong morale, in order to try to give everyone the best welfare possible. The trustees must see the economy in a selfless way, like an opportunity to help everyone (especially the poorest), and based on this point of view, plant the policies that have to be done to achieve that goal. Now after this shortly clearance of the concepts of trustees of the poor and guardians of rationality1, we can see clearly that Smith was a trustee, because Smith was worried about deep concepts like justice, equity and what is right, not just only about an efficient way of distribution. He is not only interested in a method to make de Gross Domestic Product grow, but he was also worried about improving the welfare of people, especially the most needy. The principal objectives of the classical theories of Economics its how to sustain the progressive state which in words of Gerald M. Meier is: the principal welfare objective of classical Economics is to attain a continuous state of economic expansion. This objective, in a nutshell, can be made, also, by providing another aim that is heading for the growth of the population revenue. According to Adam Smith, the economic expansion of a state is derived from the growth of income per capita because it is not only about production, like the mercantilists sustain, it is about the ideal balance of production and consumption. But, how to make the income per capita grow? According to Meier, in the classical economy there were three policies to growth: 1. Growth in the labor force and stock of capital. 2. Improvements in the efficiency with which capital is applied to labor through greater division of labor and technological progress.
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Meier, Gerald M. Biography of a Subject: an evolution of development economies, 2005

3. Foreign trade that widens the market and reinforces the other two sources of growth. 2 Therefore, these three policies gave us an enlargement in the ranks of the workers and an increase of production. With all this extra production, what its needed is a larger market, and so what automatically will happen is an increase of the salaries. In this way, both, income and economy will develop. Smith tell us that for this to happen, it is very important the investment in agriculture, manufacturing and trade. So this is how the poor larger part will share the larger part of the benefits of the economic growth, by creating new jobs with better earnings, giving them a larger buying power, in other words, making them part of the solution. So, apparently, it looks that with Smith Classical Economic theory, the dilemma between grow and equity can be solve. Of course we have to be aware that this was written more than two-hundred years ago so this economic formula has expire some time ago, but nonetheless, is a start that can make us understand that economist have to pass from guardians of rationality in order to understand the dynamics of the economy, and become a trustee of the poor for a wise distribution of resources to create a more equal and harmonious society that can develop and grow. The task of political economy was not only to illuminate the process of national economic development but also to explain how in the course of a countrys development its national income is distributes in the form of profit for capital wages for labor (Meier, Gerald M. 2005)

References: Meier, Gerald M. Biography of a Subject: an evolution of development economies, 2005 Streeten, Paul. The Political Economy of Fighting Poverty, 1995 Smith, Adam. The Wealth of Nations 1776

Meier, Gerald M. Biography of a Subject: an evolution of development economies, 2005