He wrote theories on the interaction
of supply, demand, interest rates, rents, coinage, and foreign
exchange rates. He believed that interest rates should be the
natural ones determined by market forces rather than by the
legislature, especially if there was an attempt to lower interest
rates underneath their natural rate, which was not only
undesirable but easily circumvented. He thought that attempting to
legislate contrary to natural economic laws, e.g. prices, was
doomed to failure from unexpected consequences. He agreed with
most mercantilists that by maintaining a large inflow of precious
metals through consistent export of surpluses in foreign trade
would lead to low interest rates, increased trade, increased
capital stock, high employment, and high prices, and therefore a
healthy economy and enrichment of the nation.
John Locke theorized that propositions have probability rather
than certainty. His "Thoughts on Education" was a great book on
the formation of character. Locke also wrote about the large field
for knowledge in labor-saving and economic inventions. He espoused
freedom of thought in "Letters on Toleration" and wrote "An Essay
Concerning Human Understanding", which described how the mind
functions in learning about the world and which attempted to
reconcile science and Christianity. He was a great admirer and
friend of Newton and they shared religious views.
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