Economics Flashcards
economic systems
public enterprise
command economy
centrally planned
state economy
Karl Marx
theory- if a place that works together and runs on wage labour, then there would be class struggle (workers taking power)
capitalism would lead to communism
planning- social utopianism
Critique of Capitalism 1867
- society > individualism
- planned production > self interest
- profits should be shared
- capitalism ignored human conditions
- producers saw worker as no value
Communist Manifesto 1848
workers awareness of plight- works would do something about their problem, leads to revolution
Dialect Materialism
- exploitation of power
- bourgeoisie accumulate, and pay proletariat subsistence wages
- crisis falling profits
- rich-richer, poor-poorer
- inevitable revolution of plight
- dictatorship of proletariat
- classless society
- withering of state, everyone equal
main ideas of marxism
- class struggle
- bourgeoisie (oppressor) vs. proletariat (oppressed)
- inevitable victory of proletariat
- revolution, public ownership
Robert Owens
- Utopian socialism
- profit motive that revolves around collectivism
- ownership is voluntary, not through class struggle/revolution
- modern liberalism
Smith’s theory
- anti-mercantilism- royal controls producers, ignores consumers
- decentralization- should be made by producers/consumers
- barter system- fair exchange, if people have self-interest = long prosperity
Laissez-faire
smith, let it be, no gov
invisible hand
smith, market forces supply/demand and prices, long prosperity, competition
role of gov in free market
- national defense, stability
- private property, competition
- anti-monopoly laws, competition
unemployment
cheap labour = diversity goods
self interest
what was Dicken’s, chaplin, and marx’s response to smith’s theory?
does self-interest serves as a common good
capital
initial money needed to gain land and labour
scarcity
finite resources/infinite demand
economic bubble
price range exceeds value
social costs
capitalism/individualism/profit motive leads to achievments
consumer sovereignty
free to make their own decisions, dollar voting
profit motive
reasons producers produce to make a profit
innovation
competition
wealth of nation
sum total of production
Hubris
great crash of october 1929
free market factors that lead to the great depression
- unregulated banking (laissez-faire)
- consumer confidence
- inflated economic bubble
- domino effect of unemployment
hyperinflation
too much money, few goods
inflation of germany 1920- inflation to hyperinflation
stock market crash 1928/29
loss of consumer confidence and savings
John Maynard Kaynes
demand side, gov needs to spend money to create jobs, mixed economics, left wing, modern liberal, cradle to grave theory
demand side
gov intervention, public property, increase of regulation
Hayek and Friedman
capitalism is good, opposite of Kaynes, no gov, though like smith, central planning, free market, monetary policy, classical liberal
neo-conservative response
uses demand side fails to create free market, less gov
Naunced
freer market
reagonomics
- reduce gov spending
- reduce taxes
- reduce gov regulation
- control money supply to reduce inflation
Welfare state
protection of those who can’t provide
social safety net to prevent from going into poverty
fiscal policy
taxation and gov spending
progressive taxes- pay % of tax based on income
Monetary policy
encourages consumer confidence, limits inflation
- lack of confidence = money increases to lower interest rates
- show of confidence = money decreases to increase interest rates
monetary- controlling money supply
Bolshevik revolution 1917
overthrows monarchy and removes itself from WWI (war communism)
- Lenin and vanguard, extremists
goal- nationalize industries public property)
new economic policy 1921
Lenin, mixed economy with capitalism
NEP- pragmatic, private enterprise
Stalinism
- different than marx b/c communism should be world wide
- Stalin, USSR
- POLITBURO: executive committee of communist party
- GOSPLAN: economic state planning communism
5 year plan 1928-1953
- stalinism
1. modernization
2. industrialization
3. collectivism- ukraine famine (Holodomor), land owners (Kulaks), prison camps (Gulogs)
4. militarization
capitalism
boom and bust cycle
roaring 20’s
economic triangle
- long term prosperity
- consumer, producer, gov
unions
coming together to achieve a common goal, collective bargaining, center left
Leninism
communist vanguard leads to world proletariat rule (NEP)
Stalinism
using fear/terror to rule and to achieve communism (centrally planned)
Great Depression
demanded gov to reconsider social contract, created jobs for people
deregulation
leads to investment/growth, raising unemployment, improving taxes
privitization
selling public property to individuals
