Main Concepts Flashcards
The rule of law
The individual has some autonomy and freedom.
Locke’s belief that there are natural laws.
Includes generality, prospectivity (action in the future not past), publicity, and due process.
Key threats: politicians and constituents (us!)
**gives predictability
**without the rule of law there is no chance a society will be near a good society.
Incentives
Motivate/encourage us to do something.
How governments are designed.
We expect officials to respond to the incentives of their office as defined by the people.
Representation can be based on the idea that elected officials have an incentive to do what the people want.
Revolutions
Successful founding often depend on revolutions.
Virtue
The people in a society must be capable of governing themselves with sufficient virtue to do so.
Interest
Virtue alone is not enough. You need a legislature that is incentivized to respond to the people.
Conflict of interests between England and the colonies. (England wanted an economy regulated for the interests of the British Crown while the colonies wanted economic freedom)
Ingredient list
1) a commitment to creating a good society.
2) the rule of law.
3) a history of self-government.
4) Distance from the center of power.
5) People virtuous enough to want to have this society.
6) A legislature that is incentivized to respond to the people.
Markets
As decentralized as something can get.
Works by incentives and is very efficient.
Key terms: competition, law of demand, law of supply, equilibrium price.
prices regulate behavior for the common good!
Factions
Parties: democrat and republican.
Feared that the factions would divide the country.
Washington was very against them.
Thomas Jefferson supported different political parties.
Bicameral congress
Divided house and senate. Separated elections (house every 2 years, president every 4 years, senate every 6 years, states whenever they want)
The Washington temptation
The belief that the people in charge are more important to government than the processes, precautions, and systems put in place.
Who rather than what.
Elements of exchange
- Money facilitates exchanges.
- Prices provide information about how to make choices based on your costs.
- Opportunity cost.
Gains from trade
We are rarely self sufficient.
Ex) making a sandwich from scratch.
Roles of the government in marketing
markets AND government
- Provide coercion and fraud.
- Provide money.
- Provide infrastructure.
- Define property rights.
- Enforce exchange. agreement.
The cobra effect
When an attempted government intervention actually makes the problem worse.
An unintended consequence.
Ex) The stamp act.
Four premises (the declaration)
1) all individuals are created equal.
2) all are endowed by their Creator with unalienable rights.
3) government, with power from the people, should secure these rights.
4) if government fails to do this it should be removed.