Chapter 4: Money and Markets Flashcards
Perhaps no single idea is more deeply embedded in modern political culture than the belief that ______ _____is the key to meeting most important human needs.
economic growth
What is the central problem of social organisation?
Understanding the origins of economic inequality.
What is challenge capitalism always faces?
The wage-price gap: The sum of all workers everywhere must buy more than what the sum of all workers everywhere were paid if there is to be profit.
How does capitalism work?
Debt
How do we bridge the wage-price gap?
By making economic “promises” that can be redeemed when the economy grows.
How does a recession and/or depression come about?
When the economic promises made cannot be redeemed due to too much debt and not a enough economic growth.
What is an unavoidable consequence of economic growth?
An increase in inequality.
If you don’t want growth and are content the way you are you can avoid the stampede of money.
False
Total amount of production in any area of business typically goes down when profits decline.
False: it’s precisely because you are making less that you need to sell more to keep income up.
Treadmill of production
The feedback of firms increasing production in the face of declining profits, leading to monopolization, social inequality, and environmental decline.
Why do corporate profit margins now typically exceed the rate of economic growth?
Because corporate employee compensation lags significantly behind corporate profits.
Externalities
Economic effects not considered in the decision-making in a market.
Increased inequality and pollution are examples of ________ externalities; Individual economic choices that promote greater equality, less pollution, and other public goods is an example of ________ externalities.
negative; positive
Negative externalities
costs not included in economic decision-making.
Positive externalities
benefits that were not considered in an economic decision.
Poor countries are _________ nations that provide cheap labor and natural resources to ______ countries.
Periphery; core
Regions that send cheap labor and natural resources to some countries and receive it from others are called __________.
semi-periphery
The US, Germany, and Japan are examples of what kind of countries?
Core countries
Vietnam, Nigeria, and Colombia are all examples of what kind of countries?
periphery countries
Mexico, Brazil, South Africa, and China are examples what kind of countries?
semi-periphery
Resource trap
Investment mostly comes from the core, little of the profit from natural resource extraction stays in the periphery to develop their home economies, leaving periphery countries to deplete their resources even more.
The core-periphery extraction can also exist within nations as part of the urban growth machine.
True
Scholars call the process of forgetting, ignoring, or obscuring the origins of what we buy ________ ________ or ________ __________.
commodity fetishism or invisible communities.
The crisis of overproduction
Despite any current success achieved in technology, markets, labor costs, and politics, the pinching and elbowing on the treadmill of production still goes on because overproduction lowers profit margins.
The crisis of underproduction
sometimes producers find themselves undermining the same social and environmental relations that make their production possible; they try to solve the first crisis by creating the second.
Jevons paradox
More efficient production can increase resource until in the end there is simply nothing left.
metabolic rift
The divide of human production from ecological conditions.
What does metabolic rift do?
Metabolic rift makes reforging social-ecological ties particularly hard and also separates the nonhuman parts of ecological processes from economic production.
Markets in which governments do not intervene are called _______ ________.
free markets
_____________ is the freedom from others stopping you from doing what you want; ____________ is the freedom to take agency over the conditions of your life, which is to say over other people.
Freedom-from; freedom-to
_______ _______ prevents interference; ________ _______enables interference.
Negative regulation; positive regulation
Privatization
the use of the market to monetize formerly uncommodified products like air, water, and wildlife as well as to outsource government activities to corporate contractors.
Neoliberalism
the defense of individual freedom, including private property rights, against feudal control by the aristocracy.
