Lecture 2 Flashcards
What are the two different versions of liberalism (in PE)?
Orthodox & Hetrodox
Give the five different phases of liberalism (in PE).
Also what was their historical context
What are the (5) core ideas of orthodox economic liberalism? What are two critiques?
Where and when was liberalism developed? What are three key liberal thinkers? What did they believe?
What are four conclusions from orthodox liberal economic perspectives?
Which form of liberalism is most prevalent in economics departments?
What are two key thinkers of neoliberalism (in PE)? What are their key beliefs?
Who implemented neoliberal policies in the 1980’s?
Thatcher & Reagan
What are core ideas to a neoliberal policy program?
When did the neoliberal consensus (alledgedly) break down?
2020’s
Why did the neoliberal consensus alledgedly break down?
Who is a key thinker of hetrodox liberalism? Who is he?
What is Keynesian demand management? What are its two policies?
What did Adam Smith describe in the Wealth of Nations?
- Critizing the Parliament for creating monopolies
- He believed in the cooperative, constructive side of human nature.
- The best interest of alll of society is served by rational individual choices, also described as the invisible hand that guides the economy
What are the five main elements of capitalism?
- Markets coordinate society’s economic activities
- Extensive markets exist for the exchange of land, labor, commodities, and money
- Consumer self-interest motivate economic activity, while competition regulates economic activity
- Individuals have the freedom to start up new business enterprises without state permission
- Individuals have the right to private property and are entitiles to the income that flows from their property
What does it mean when said that competition regulatess economic activity?
The way markets convert the persuit of self-interests into an outcome that benefits all of society. The persuit of self-interests keeps a single self-interest going to the extreme.
What did Smith concede that governments should do?
Name six
He believed that they had a legitimate role in:
- defending the country
- policing
- building public works
- preventing the spread of discease
- enforcing contracts
- helping to achieve individual rights
What is rent-seeking? Why did Smith oppose it?
Rent-seeking: the manipulation of the market to reward powerful business intrests)
Smith opposed it because the invisible hand does not work if there is no competition.
What did Riccardo do to Smith liberal ideas?
He internationalized it, implying that free trade is good.
How did Mill change Smiths liberal ideas?
He believed a greater role for government, since he lived in a time of great inequality.
Who thought of the “paradox of thrift”? What does it mean?
Keynes, the idea that everyone acting in their own personal intrest might cause short term problems. He believed this could be solved by a more active state.
Why did neoliberals believe that the size of the state had to be reduced?
They believed a paternalistic government would be stand in the way of the persuit of the good life and happyness.
What are the five characteristics that globalization caused?
- An economic process that reflects dense interconnections based on new technologies and mobility of capital
- The integration of national markets into a single global market
- A political process that weakens state authority
- A cultural process leading to complex cultural interconnections
- A process that benefits everyone economically and helps spread democracy in the world
What are critiques of neoliberal markets?
- Those in power heavily benefit from it
- It looks to much at equilibria, and not at the uncertainties
What is new constitutionalism?
The idea that sensitive economic issues should not be in the hand of politicians but placing it in independent bodies and the private markets.
What four charcteristic ideas do orthodox liberals propose?
- Limit government support for banks, infrastructure projects, and social welfare projects
- Decrease regulation of the economy
- Cut taxes for the middle class and wealty to stimulate economic growth
- Foster more globalization
What are the four characterstic ideas do hetrodox liberals propose?
- Spend more to grow the economy and create jobs, without worrying about inflation
- Invest more in renewable energy, infrastructure, education and health care
- Break up big banks and impose tougher regulations
- Better manage globalization, but without stopping it
