Capitalism & Markets I

Question 1

Capitalism proper

Answer 1

The pure or ideal form of capitalism, based on certain core principles without much interference from governments or external controls.

Question 2

Laissez Faire

Answer 2

Minimal government interference in the economy.

Question 3

Worker capitalism

Answer 3

System where workers are also owners — meaning they have a direct stake in the success and profits of the business they work for.

Question 4

State capitalism

Answer 4

System where the government plays a strong, active role in the economy, but still uses capitalist tools like markets, profits, and corporations.

Question 5

Consumer capitalism

Answer 5

Economic growth and success are driven by mass consumer spending - Consumers are manipulated to buy more by corporations

Question 6

Monopoly capitalism

Answer 6

Monopoly capitalism is a stage of capitalism where a few large companies dominate entire industries, reducing competition and controlling markets.

Question 7

Characteristics of free markets

Answer 7

1. Freedom from COERCION (Use money as wish)
2. Freedom from EXTERNAL CONTROL (minimise regulations on functioning)
3. Freedom of CHOICE (availability of options for actors)

Question 8

Father of liberalism

Answer 8

John Locke

Question 9

Ideas of John Locke

Answer 9

1. Natural Rights
2. Liberty and Private Property
3. Laissez faire

Question 10

Criticism towards John Locke

Answer 10

Slavery; other rights?

Question 11

Father of classical economics

Answer 11

Adam Smith

Question 12

Adam Smith ideas

Answer 12

1. Capitalism is reason for economic power
2. Against mercantilism

Question 13

Criticism towards Adam Smith

Answer 13

“Free market” only considers buyers and sellers, no externalities

Question 14

Father of Socialism

Answer 14

Karl Marx

Question 15

Karl Marx ideas

Answer 15

1. Capitalism continues feudal exploitative order
2. Feudalism –> aristocracy owns the land - this way they exploit serfs
3. Capitalism –> capitalists own the
   capital - this way they exploit workers
4. Major changes
   come through changing “modes of production”
5. In the long run workers will reject this exploitation.

Question 16

Criticism towards Karl Marx

Answer 16

1. Not effective in generating and redistributing wealth and income
2. Capitalism reinvents itself
3. Scientifically not correct

Question 17

Father of Social Darwinism

Answer 17

Herbert Spencer

Question 18

Herbert Spencer Ideas

Answer 18

1. “Survival of the Fittest
2. Free competition ensures efficiency
3. Strong “Laissez faire” advocate

Question 19

Criticism towards Herbert Spencer

Answer 19

1. “Free market’” just considers benefits for the seller and buyer
2. His ideas resulted in legitimization of genocides, abortion and
   forced sterilization.

Question 20

Father of Modern Sociology

Answer 20

Max Weber

Question 21

Max Weber Ideas

Answer 21

1. Capitalism = Secular version of Protestantism
2. Principle of predestination.
3. Rationalisation of work, reinvestment, and hard work as a measure of goodness.

Question 22

Criticism towards Max Weber

Answer 22

Capitalism is a doctrine driven and created by manufacturers.

Question 23

Father of Keinesianism

Answer 23

John Maynard Keynes

Question 24

Ideas of John Maynard Keynes

Answer 24

1. The government should use fiscal and monetary policies to aim to mitigate the adverse effects of economic recessions, depressions and booms (counter-cyclical measures).

Question 25

Criticism towards John Maynard Keynes

Answer 25

Does not work in the long run - inflation raises, consumption decreases.

Question 26

Keynesian welfare aspects

Answer 26

1. Economic policy aiming at full employment, state builds infrastructure to support production and consumption. 2. Social policy increasing the amount of distribution to disadvantaged groups, creating a legal framework to improve workers’ rights (through trade unions). 3. Spatial/regional policy aims at reducing differences between rich and poor regions.

Question 27

(neo)liberalism

Answer 27

Focuses heavily on free markets, privatization, deregulation, global trade, and small government.

Question 28

The "Third Way" (Key proposals - workfare)

Answer 28

1. People should work for their welfare – preventing lazy unemployment. 2. Subsidies and poverty alleviation measures should be limited to only people in severe situations.

Question 29

The "Third Way" (Key proposals - flexicurity)

Answer 29

1. Companies should be allowed to hire and fire more freely. 2. Social standards and continuous employment should be ensured through life-long learning.

Question 30

The "Third Way" (Key philosophers)

Answer 30

Anthony Giddens; Tony Blair; Gerhard Shroder.