2: Growth, Capitalism and Modernity Flashcards
What is a system made up of? Often have…
Made up of components and relationships (interdependencies) between them
Often defined as having specific goals, purposes or outputs
What is a social system? examples
Made up of actors (individuals/groups) and relationships between them
Term referring to all systems where humans (or groups) are the primary components
e.g. bakery, global financial system, family, Canada (as a country)
What is an economic system?
Social system of production, allocation and distribution, and consumption of goods and services within a society
What is economic growth? What are the two reasons for it?
Economic growth results when the output (total goods and services) of an economy grows because:
- more land, labour, or capital (equipment, animal power, fossil fuels, etc) are devoted to the production of goods and services
- the productivity of these factors of production (land, labour, capital) are increased
What are the means of production?
Land, labour, capital
When did stone tools start to be used? When did anatomically modern humans appear?
stone tools ~2,500,000 BCE
~200,000 BCE anatomically modern humans
What kind of social systems did the hunter/gatherers of the paleolithic have?
Social groups, usually of less than 50 people
Simple social systems of governance and economic production/exchange (similar to small family networks)
Production and consumption in society was very low
What is technology
Knowledge and processes that can be applied to expand human capabilities
e.g. stone axe -> steel axe -> chainsaw
When did the First Agricultural Revolution happen? What did it consist of? What happened to social systems
~9,000 BC in some areas of the world
Major transformation of human social systems: increasingly complex social systems
Human settlements formed and domestication of plants and animals began (more control over food supply allowing ppl to settle in one place)
The First Agricultural Revolution lead to the creation of…
Individual property rights institutions for things like plants, animals and land
Areas became attached to certain groups of people. Individuals and families controlled certain spaces
What is an institution?
Rules of the game in a society, or, more formally, are the human devised constraints that shape human interaction
Think of institutions as…
all the rules (formal institutions) and norms (informal institutions) that affect members of society
What are property rights?
The rules or formal institutions that outline who has ownership over property (and if it can be sold), who can use it, what can be done with it, and who can make further rules regarding its use
Agricultural surplus allows for…
specialization of labour & increase in trade
e.g. thatching a roof, religious leaders, healers
When was the early modern era? What happened?
Starting with the Renaissance, the period from about 1400 through 1700 saw most of Europe transition from medieval social systems to early modern social systems
Key aspects of the early modern era
- decline influence of the catholic church (particularly in terms of influence over knowledge, governance, and economic production)
- rise of the scientific method
- rise of liberalism
- rise of merchant capitalism
What is liberalism
A political and social philosophy that promotes individual rights, civil liberties, democracy, and free enterprise (contrasts w individuals being seen as having different worth and status due to their birth status or religious standing)
Who was Cosimo de Medici
Italian banker and politician who established the Medici family as effective rulers of Florence during much of the Italian Renaissance
Merchant republic
What happened in the late modern era?
- 2nd agricultural revolution
- the industrial revolution
- health improvements and population rise
- rise of capitalism
- government led modernization (public health, etc)
When was the second agricultural revolution? What happened in the UK and much of europe?
Mid 17th through mid 19th century
Common lands were declared private property through enclosure acts. This increased incentive to improve land productivity and led to modernization of farming.
Food yields in the 2nd agricultural revolution? This led to…
Increased yields with new kinds of crops and innovative farming practices being developed and arriving from around the globe
Greatly increased agricultural production and freed up labour for other forms of work (e.g. factories)
When was the industrial revolution? What happened
- ~1750 to 1900
- technological changes led to dramatic productivity increase
- ag labour -> industrial labour
- massive increase in coal consumption and beginnings of fossil fuel driven economy
The industrial revolution was accompanied/accelerated by…
major institutional changes (enclosure acts, new banking systems, democratic government, rise of capitalism, etc)
Who was Adam Smith? What kinds of questions did he ask
Wrote the Wealth of Nations
Who should direct the economy? How should scarce things (labour, land, coal, food, nails) be managed? What results in the greatest common good?
What was Adam Smiths philosophy on self interest?
People work, produce, etc not our of humanity but out of their own self interest
What is homo economicus?
Simple model for a person: ‘ ideal type’
Self interested individual
Does a perfect cost-benefit analysis on every decision (production/consumption) based upon their own preferences
What is homo economicus motivated by?
To employ his/her resources (land, labour, $, etc) in an efficient manner to achieve his/her personal desires
Slides 33-36
Market forces
Decision making power in a free market
Is decentralized and in the hands of individual members of society who are free to decide what to sell and buy, what to transport from place to place, what to produce, what labour to engage in, and so on
Prices in free markets
Are the result of the demand for goods and services (based on the preferences of free decision makers) and the availability (scarcity) of those goods and services
People in free markets
Are self interested and have incentives to maximize their own productivity and to value and protect their property
Continued growth in the 20th century
- more economies opened to capitalism
- gov began to manage capitalism in effort to avoid boom/bust cycles
- gov expanded modernization efforts including water systems, roads, schools systems, hospital systems, highway systems, communication systems, electrical grids, airports, etc
GDP definition
Gross domestic product is the total value of final goods and services produced (sold) within a territory during a specified period
Essentially % more ‘stuff’ produced in the territory
Very common way of measuring the output of a society/economic growth
What is the GDP per capita
GDP per individual in the territory
