Chapter 4: Money and Markets

Question 1

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.

Answer 1

economic growth

Question 2

What is the central problem of social organisation?

Answer 2

Understanding the origins of economic inequality.

Question 3

What is challenge capitalism always faces?

Answer 3

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.

Question 4

How does capitalism work?

Answer 4

Debt

Question 5

How do we bridge the wage-price gap?

Answer 5

By making economic “promises” that can be redeemed when the economy grows.

Question 6

How does a recession and/or depression come about?

Answer 6

When the economic promises made cannot be redeemed due to too much debt and not a enough economic growth.

Question 7

What is an unavoidable consequence of economic growth?

Answer 7

An increase in inequality.

Question 8

If you don’t want growth and are content the way you are you can avoid the stampede of money.

Answer 8

False

Question 9

Total amount of production in any area of business typically goes down when profits decline.

Answer 9

False: it’s precisely because you are making less that you need to sell more to keep income up.

Question 10

Treadmill of production

Answer 10

The feedback of firms increasing production in the face of declining profits, leading to monopolization, social inequality, and environmental decline.

Question 11

Why do corporate profit margins now typically exceed the rate of economic growth?

Answer 11

Because corporate employee compensation lags significantly behind corporate profits.

Question 12

Externalities

Answer 12

Economic effects not considered in the decision-making in a market.

Question 13

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.

Answer 13

negative; positive

Question 14

Negative externalities

Answer 14

costs not included in economic decision-making.

Question 15

Positive externalities

Answer 15

benefits that were not considered in an economic decision.

Question 16

Poor countries are _________ nations that provide cheap labor and natural resources to ______ countries.

Answer 16

Periphery; core

Question 17

Regions that send cheap labor and natural resources to some countries and receive it from others are called __________.

Answer 17

semi-periphery

Question 18

The US, Germany, and Japan are examples of what kind of countries?

Answer 18

Core countries

Question 19

Vietnam, Nigeria, and Colombia are all examples of what kind of countries?

Answer 19

periphery countries

Question 20

Mexico, Brazil, South Africa, and China are examples what kind of countries?

Answer 20

semi-periphery

Question 21

Resource trap

Answer 21

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.

Question 22

The core-periphery extraction can also exist within nations as part of the urban growth machine.

Answer 22

True

Question 23

Scholars call the process of forgetting, ignoring, or obscuring the origins of what we buy ________ ________ or ________ __________.

Answer 23

commodity fetishism or invisible communities.

Question 24

The crisis of overproduction

Answer 24

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.

Question 25

The crisis of underproduction

Answer 25

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.

Question 26

Jevons paradox

Answer 26

More efficient production can increase resource until in the end there is simply nothing left.

Question 27

metabolic rift

Answer 27

The divide of human production from ecological conditions.

Question 28

What does metabolic rift do?

Answer 28

Metabolic rift makes reforging social-ecological ties particularly hard and also separates the nonhuman parts of ecological processes from economic production.

Question 29

Markets in which governments do not intervene are called _______ ________.

Answer 29

free markets

Question 30

_____________ 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.

Answer 30

Freedom-from; freedom-to

Question 31

_______ _______ prevents interference; ________ _______enables interference.

Answer 31

Negative regulation; positive regulation

Question 32

Privatization

Answer 32

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.

Question 33

Neoliberalism

Answer 33

the defense of individual freedom, including private property rights, against feudal control by the aristocracy.