Econ Final (CCU)

Contrast conspicuous consumption with satisfaction of "absolute" needs.

-Conspicuous consumption, on the other hand refers to our consumption of things for which we really don't have a need, but we are persuaded that need them by advertising, etc. -Absolute needs are those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be. -Very few needs indeed are "absolute" in the sense that they are independent of social environment or of the example of others, and that their satisfaction is an indispensable condition for the preservation of the individual or of the species. -Most needs which make us act are needs for things which only civilization teaches us exist at all, and these things are wanted by us because they produce feelings or emotions which we would not know if it were not for our cultural inheritance.

Guilds

-Formed by craftsmen/tradesmen and merchants -formed for protection, limit competition -get charters from the lords to build towns -fairs: bring merchants together

10 things that will "pretty generally apply" in most advance countries

-Free education for all children in public schools. Abolition of children's factory labour in its present form. Combination of education with industrial production, -A heavy progressive or graduated income tax. -Centralization of the means of communication and transport in the hands of the State. -Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan. -Centralization of credit in the banks of the state, by means of a national bank with State capital and an exclusive monopoly. -Confiscation of the property of all emigrants and rebels -Abolition of all rights of inheritance. -Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country. -Equal liability of all to work. Establishment of industrial armies, especially for agriculture.

What was the fundamental flaw of mercantilism?

-It focused on the wealth of the state rather than the wealth of the citizen -Every trade to them must have a winner and a loser -It devalued the key element of a successful economy

Hedonistic Calculus

-based upon the notion that man is just another animal -bad laws were those that decreased happiness -the only public policies that made sense were those that would increase the sum of total happiness in society -good laws were those that increased happiness

Bastiat on the Law

-the law should be just and philanthropic -the law should directly extend welfare, education, and morality -the law is a collective organization of the individual right to lawful defense.

What do Marx and Engels say about property?

-there should be no right to private property -All property should be owned by the "people" (people referring to the state). -All property should be owned in common.

in this sense, the theory of the Communist may be summed up in the single sentence

Abolition of private property

Bullionism

Accruing precious metals in mercantilism precious metals held power

Wealth of Nations

Adam Smith Trade in both directions benefits both parties invisible hand theory only works with complete free exchange

Philosophy

All learning exclusive of technical precepts and practical arts, the sciences, and liberal arts

What does marginal theory tell us about the effects of increased taxation?

Any level of taxation will make some undertakings unprofitable or submarginal

Why do Marx and Engels suggest that abolition of private property is no real change for the working class?

Because they do not own property anyway.

society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other

Bourgeoisie and Proletariat

Even though the benefits of free enterprise are great, historically government control and oppression generally prevail. Why is this the case?

By nature men prefer freedom and liberty more for themselves than for their neighbors.

Capitalism v Free Enterprise

Capitalism deals more when the government prefers certain companies/businesses over others. Free enterprise has no government involvement

Which of the following was not one of the estates (classes) in the feudal system

Carpenters

The Constitution

Constrains the government's use of force

Fabian

Evolutionary socialism Corporatists gov. ownership of property

Favorable Balance of Trade

Exports are greater than your imports (NOT free trade)

Essay Question: Fully describe what is meant by "Free Enterprise" (free markets). Then compare and contrast Free Enterprise with Feudalism, Mercantilism, Corporatism, and Communism. Discuss the nuances between Free Markets and Capitalism. Discuss the relationship between Socialism, Welfarism, Collectivism, Evolutionary Socials

Free Enterprise: complete freedom in the market to buy and sell, import and export Feudalism: class system where land equals power, stuck in a class system where you need to work if you don't own land, labor is necessary (similar) Mercantilism: exports and imports are heavily regulated by the government, the government does not want to import, you still have people making things to export (similar) Corporatism (capitalism): when the government favors certain businesses by financially supporting them, you would have free trade but some places would get preferential treatment. Communism: complete removal of private property Free Market: no government involvement, regulated by supply and demand Capitalism: government preferences, regulated by government All of them aim to have the greatest good for the greatest number. More focused on the community and not on the individual. socialism -- setting up the economy so goods are distributed evenly, everyone works for everyone welfarism -- redistribution of goods to people who are in need collectivism -- considers the group needs over the individual needs of people Evolutionary socials -- moves toward socialism over time without altering the political framework

The law's almost universal perversion

Generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws. This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law.

Compare and contrast what actions by government as a consumer would have greater and lesser impact on economy?

Government as a consumer of goods may have anywhere from a negligible impact to a dominant one on an economy, depending upon the extent of its requirements for goods and the policies it follows.

According to natural law theory, which of the following is not the government's role in regard to property rights?

Government grants property rights

How has the law been used to destroy its own objective?

It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect.

Feudalism

Lordism -- power in landowning (govt. pref) Manor King and Pope Lord Clergy Knight Serf

Political Economy Line

Lots of Liberty ----> No liberty -Free Enterprise -Corporatism (true capitalism) -Welfarists/Fabians (stretches across line) -Mercantilism -Feudalism -Communism (totalitarianism)

Why were nations so interested in maintaining a favorable balance of trade?

Mercantilists preferred a favorable balance of trade, that is, that their nation would sell more in goods to other nations than they bought in return. The difference would be paid in gold, and, by their reckoning, would increase the wealth of the nation.

Was the former Soviet Union able to export any products?

No, because there was no private ownership of property therefore two of the three elements of production - land and capital- were taken over by the state

Who owned the land in the feudal system?

Nobels

What was believed to be the principal benefit of foreign trade during the mercantilist era?

Not free trade, stockpiling of goods, or elimination of gold and silver

communism

Proletariat vs. Bourgeouisie Dialectical materialism -- darwin's natural selection Revolutionary Global uniting ALL workers to overthrow Bourgeouisie

What do Marx and Engels say about education?

Public education is necessary to rescue education from the influence of the ruling class.

Which of the following was not 1 of the 3 levels of standing in the craft guilds?

Serf

Which of the following is not an accurate reflection of a modern day recurrence of the underlinged medieval terms:

Serf - captain of industry

the idea of a busybody

Social man is not by nature content merely with managing his own affairs. He is inclined to take a more or less lively interest in the affairs of his neighbors

Why is the denial of the spiritual nature of man fundamental to socialism?

Socialism is based on philosophical materialism and presumes reality is made up of matter, which is antithetical to the spiritual nature.

True

Socialist writers assume that if the legislators left persons free to follow their own inclinations, they would arrive at atheism instead of religion, ignorance instead of knowledge, poverty instead of production and exchange.

Common ownership of property is an illusion because

Someone has to make the decisions about the use of land or any other resource.

KGB

Soviet secret police

Protectionist Tarrif

Taxing imports, make it more expensive to buy from other countries.

dialectical materialism

The Marxism concept of reality in which material things are in the constant process of change brought about by the tension between conflicting or interacting forces, elements or ideas.

What do Marx and Engels say about family?

The bourgeois sees his wife a mere instrument of production. He hears that the instruments of production are to be exploited in common, and, naturally, can come to no other conclusion that the lot of being common to all will likewise fall to the women.

Bourgeoisie

The class of modern capitalists, owners of the means of social production and employers of wage labour.

Proletariat

The class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live. -workers;the working class

What was the economic rationale of mercantilism?

The consolidation of the regional power centers of the feudal era by large, competitive nation-states. Focus on national treasury (economic nationalism -- not for the individual)

fractional reserves

The idea of having only a portion of the deposits on reserve.

New Deal

The policies adopted during the 1930's under FDR.

Zero Sum Game

There are exactly so many resources and so much gold and every country had to do its best to get that gold because it is finite "Pieces of the pie"

What do Marx and Engels say about country and nationality?

They should be abolished.

How do the socialists confuse the distinction between government and society?

They think that if society is to help people, it must be done though the government.

Goal of Mercantilism

To achieve a "favorable" balance of trade that would bring gold and silver into the country and also to maintain domestic employment.

Why is it important for people to frugally manage their property?

To maximize the satisfaction of our wants and needs.

Communism abolishes eternal truths, it abolishes all religion, and all morality, instead of constituting them on a new basis; it therefore acts in contradiction to all past historical experience.

True

Craft Guilds of medieval times were somewhat akin to labor unions of today.

True

Moral positivism is the denial of natural law

True

Natural law is another term for moral positivism

True

Moral positivists

Would say there are moral absolutes

Does Hayek disagree with the assertion that all needs are not absolute?

Yes

Industrial Revolution

a period from the 1790s to 1860s where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times. It began in the United Kingdom, then subsequently spread throughout Western Europe, North America, Japan, and eventually the rest of the world.

free trade

a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports)

evolutionary socialism

also been known by a variety of names: gradualism, democratic socialism, and progressivism. In general, those of this persuasion have sought to move toward socialism by gradual means within a democratic framework without radically altering the existing political framework.

common ownership of property

an illusion in that someone has to make decisions regarding its use

pyramid scheme

an investment scheme, in which the proceeds from the later investors money is used to pay back the early investors, used by Cleveland in reference to Social Security

Anarchists

believe that government is not essential in that it can be replaced entirely by the market

Freeze-Frame Myth

believing that things will always stay the same

state corporatism

capital is both owned and controlled by the state.

private corporatism

capital is technically privately owned but manipulated by government.

crony capitalism

certain business interests are given preferential treatment.

Which of the following is not one of the other names were given for the term "evolutionary socialism"?

communism

Artsy Myth

confusing aesthetic judgements with economic arguments

Economic Nationalism

connected to mercantilism the king rules the state and is focused on making it strong. National treasury Not about individual economic gain!

free enterprise

entails the freedom of persons to use their minds, faculties, and materials to produce and dispose as they will or choose, subject only to such obligations, responsibilities, duties, and restraints as they may have contracted or as are inherent in their undertaking.

Piety Myth

focusing on our good intentions rather than on the unintended consequences

Colonization

for the purpose of getting gold and natural resources to export. goods from colonies can only be bought and sold to mother country

impossible to separate fraternity and voluntary

fraternity is legally enforced liberty will be legally destroyed

economic freedom

free enterprise

laisssez-faire

government should stay out of it and let the natural order emerge

welfarism

has its roots in socialism but occurs in a capitalist economy and seeks "social justice" through redistribution of goods and services

laborism

holds that labor, particularly manual work, is the source of economic value and hence of economic production. Laborism is to socialism what landism was to feudalism

revolutionary socialism

immediate takeover (usually by force), usually results in communism

due diligence

involving either an investigation of a business or person prior to signing a contract, or an act with a certain standard of care.

self-evident

it appears immediately (usually from the senses

the dominance of the working classes

laborism (communist)

real property

land and building on it

Margaret Thatcher

leader of the British conservative party who served a Prime Minister from 1979 to 1990

the economic unit of medieval agriculture

manor

Domestic Monoplies

only some people could have charters to make things cut down on competition similar to corporatism

levels of reality

physical(body) metaphysical(mind) spiritual(soul)

Landism

power in landowning (govt. pref) Manor

property right

primal in that they give rise to all other rights and liberties

economic determinism

refers to the basic contest over control of the means of production and implies that all political, cultural, and social life can be predicted from the prevailing relations of production.

public policy

rules and laws that govern a society

What uses of force pervert the law from its true purpose: organized justice?

stupid greed and false philanthropy

Economy

the frugal use of scarce resources

corporatism

the word used to denote preferential government treatment of certain business or capital interests since this word more directly exposes the underlying actions of government which undermine individual human action.

revelation

understanding from the Truth of God