Enlightenment Era

Definition

The Enlightenment Era was an intellectual and cultural movement that emerged in the late 17th century and continued through the 18th century, emphasizing reason, individualism, and skepticism of traditional authority. This period significantly influenced economic thought, laying the groundwork for modern economic theories by promoting ideas of natural rights, liberty, and the role of government in regulating commerce and trade.

5 Must Know Facts For Your Next Test

1. The Enlightenment Era brought about a shift from mercantilist ideas to more liberal economic theories, advocating for free markets and minimal government intervention.
2. Key figures of the Enlightenment, such as Adam Smith, laid the foundation for classical economics by arguing for the benefits of competition and self-interest in driving economic growth.
3. This era promoted the idea of 'natural laws' governing economics, which influenced subsequent economic thinkers to consider principles that could lead to prosperity.
4. The emphasis on individual rights during the Enlightenment led to discussions on property rights, which became crucial in shaping capitalist economies.
5. The philosophical debates of the Enlightenment spurred revolutionary ideas that led to political changes, including the American and French Revolutions, fundamentally altering economic systems in those regions.

Review Questions

• How did the Enlightenment Era influence economic thought in relation to traditional views like mercantilism?
  • The Enlightenment Era shifted economic thinking away from mercantilism, which focused on state control and regulation of trade. Thinkers like Adam Smith argued for free markets based on competition and individual self-interest, proposing that these elements would lead to greater wealth for society as a whole. This new perspective emphasized limited government intervention, allowing for more dynamic economic growth.
• In what ways did Enlightenment ideals contribute to the development of modern democratic economies?
  • Enlightenment ideals such as individual rights and the social contract contributed significantly to modern democratic economies by promoting the idea that governments should be accountable to the people. This led to an emphasis on property rights and personal freedom, which are foundational elements in capitalist systems. As societies adopted these principles, they laid the groundwork for market economies where individuals could pursue their interests without oppressive government restrictions.
• Evaluate how the Enlightenment's focus on reason and individualism impacted economic theories that followed its emergence.
  • The focus on reason and individualism during the Enlightenment fundamentally reshaped economic theories by encouraging thinkers to base their ideas on empirical evidence and rational analysis rather than tradition or authority. This led to the development of classical economics, with theories emphasizing market dynamics, supply and demand, and the importance of entrepreneurship. As a result, economic thought became more systematic and scientific, paving the way for modern economics that prioritizes rational choice and individual agency.

Related terms

Rationalism: A philosophical belief emphasizing that reason and logic are the primary sources of knowledge and truth, shaping Enlightenment thinkers' views on society and economics.

Social Contract: A theory proposed by Enlightenment philosophers like John Locke and Jean-Jacques Rousseau, suggesting that governments derive their authority from the consent of the governed.

Mercantilism: An economic theory prevalent before the Enlightenment that emphasized state control over trade and the accumulation of wealth through a positive balance of trade.