Chapter 5 Flashcards
Socialize
spread to society, at large
A socialist asserts that
an individual should act to promote the good of society, not the promote the individual’s wellbeing
Karl Marx said that production should come
“from each, according to his ability, to each, according to his need”
External cost
costs that naturally spill over to others
Externalities
external costs and external benefits
Fascism
Economic system in which the state leaves property in private hands but closely regulates
Eminent domain
where property is taken for state public use, such as roads, and parks, but the owner is compensated.
Civil forfeiture
where a person is suspected of a crime and that person’s property is seized because it is automatically suspected as having contributed to the crime
What is the latest socialist rationale?
If the state provides any good from which the individual might derive external benefits- for examples roads, schools, and food courts- that no property is private and the state is justified in dictating the use of the individual’s property and income
What did Marx predict about unemployment rates?
technological advances would replace labor with capital, causing a growth in unemployment
According to socialists, something keeps individuals from auctioning off their labor to their highest bidding firm. What is it?
firms are not in competition, they are all on the same side
Why were people looking for a new way of selling socialism in the 1950’s?
because Marx’s predictions about worsening conditions of workers and unemployment did not come to pass
T/F: Only government socializes costs and benefits by taxation and subsidy. There are no costs and benefits that are socialized unless the government does it.
False; some benefits/costs are not socialized by government, such as the benefit from national defense and cost of pollution
What reason do capitalist philosophers give for not expanding the state to solve the problem of externalities?
public choice school points out that government employees are self interested and have limited knowledge. This means
1) they may not be interested in solving problems, but in getting re-elected and getting money and
2) their limited knowledge may cause them to make things worse as they solve problems
How can the state maintain a socialist order if individuals disagree about their abilities, needs, or what is good for society?
by force
What did Burkhauser, Larrimore, and Simon show?
we see a 37% growth in incomes when we use household data, account for taxes, transfers, and fringe benefits, and adjust for household size
What 2 observations did Thomas Sowell make about society?
- as people age, gaining experience and education, they grow richer.
- people who are poor can increase their incomes and the wealthy sometimes lose income, moving them to different brackets
What did Milton Friedman point out in an interview with a talk show host?
leaders of all states are greedy, but Capitalism harnesses greed to improve the general welfare
What is the approximate poverty rate in the US?
16%
How much does the US spend yearly on anti-poverty per poor person?
$20,000
How does the poverty rate relate to anti-poverty spending and economic growth?
poverty doesn’t seem related to anti-poverty spending but economic growth does reduce poverty, with a lag.
What is one area where government spending on fairness replaced private spending?
unemployment insurance and education
What does Bastiat say about countries with machines vs. those with less mechanization?
More mechanization allows people to have more satisfaction for less work, so mechanized societies are well off
Who typically receives the proceeds of a civil forfeiture?
the law enforcement officer that seized the property
