Mid-Term Short IDs

Question 1

Sticky Wages & Animal Spirits (Smith and Keynes)

Answer 1

Sticky Wages - more organized capitalism, prices and wages are not totally fluid, markets are not self regulating therefore are sticky, (Previously Small firms, Now Large Corporations)
Animal Spirits - people pursue irrational self interest, act through emotion

Question 2

New Freedom (Hayek) / Old 
Keynesian view of freedom 
Equal freedom for each and all do as they please within the limits of law 
Power to do what you want

Answer 2

Old Freedom
“Freedom from coercion, freedom from the arbitrary power of other men…”
New Freedom
—“Freedom from necessity, release from the compulsion of the circumstances which limit the range of choice of all of us.’

Keynesian = Equal freedom for each and all do as they please within the limits of law
—Power to do what you want

Question 3

Sovereign is he who decides the exception (Schmidt)

Answer 3

Only works if everyone wants the same thing

What is the state of “State of Exception”?
— Exception is principally unlimited authority
Who decides in the state of exception?
—-Liberalism has no answer

Question 4

Fictitious Commodities (Polanyi)

Answer 4

Land, Labor, Money, from The Great Transformation, objects that are traded in the market but are not actually produced as normal commodities

Question 5

Double Movement (polanyi)

Answer 5

1) birth of liberal creed
2) self protection of society
Markets expand through free markets but this causes the need for more regulation (= as markets grow so does the need for regulation),

Question 6

Monetarism (Friedman)

Answer 6

= is an economic theory that focuses on macro effects;
—Relationship between government and individual,
—government mismanagement causes financial crises,
—crowding out leads to no multiplier effect,
—-government policies are slow to take effect,
Friedman wants
1) steady growth of money supply
2) rules rather than decision makers

Question 7

Visible Hand (Chandler)

Answer 7

• –Physical Hand within the market
• —Created a world in which the invisible hand does not matter but the managerial hand is impacting people’s lives (the hierarchy of business)

Question 8

Homo Economicus (Patel)

Answer 8

How to make sense of Economicus
What are the Arguments?
Natural State of Mankind –?
Profit-seeking
Patel - Humans are happier in these situations and homo economicus are
made up
Mills Monster
Homo Economicus= Ideal assumed by all economist that men are rational and
will always think of the margin and do what is most profitable
Rational = utility maximizing animals
Trying to get maximal utility or happiness
Patel Argues against this point

Question 9

Government (Foucault)

Answer 9

How people are governed or govern themselves,

Question 10

Consumer Sovereignty (Galbraith)

Answer 10

Lack of Consumer society
–Called the The Dependence Effect
1) Accepted sequence - demand drives supply
—-Market System
2) Revised sequence - producers create demand
—- Industrial System
——(How? Marketing and Advertising
——-Machinery of consumption demand creation
Consumers are no longer sovereign
Do we have unlimited wants?

Question 11

Technostructure (Galbraith)

Answer 11

Hired managers in industry make the decisions

— NOT the stock owners

Question 12

Dependence Effect (Galbraith)

Answer 12

-Lack of “consumer sovereignty”
1) Accepted sequence
— demand drives supply = Market System
2) Revised sequence -
producers create demand = Industrial System
—-How? Marketing and Advertising
Consumers are no longer sovereign

Question 13

Procyclical changes in supply of credit (Kindleberger)

Answer 13

Problem: Pro-cyclical Tendency of Credit
—–Credit expands when times are good and contracts when economy slows, credit exacerbates boom & bust,
Solution: lenders of last resort

Question 14

Lender of last Resort (Kindleberger)

Answer 14

Monetarism won’t work to fix financial crises, must have someone to provide credit during panics

Question 15

The Corporation (Drucker vs Film)

Answer 15

Drucker = Purpose Of Corporation
1) NOT the maximization of profit
——Profit = a need & limitation
2) The purpose of business is to “Create a customer”
—Basic Functions= Marketing & Innovation
FILM = Purpose of Corporation
1) Corporations are an externalization machine
——Pressure is on cooperation to make profit and externalize its problem
——Profit always becomes bottomline because it is always in competition

Question 16

Creative Destruction (Schumpeter)

Answer 16

Creation = innovation, destruction = old ways rendered useless, dynamic disequilibrium… new innovation brings destruction to older innovations

Question 17

Socialization of Risk Privatization of Reward (Mazzucato)

Answer 17

Gov makes the difficult, uncertain investments
Gov invests in human capital and infrastructure

In-turn private companies take all the reward which is credit for break throughs, This relates directly to apple. and do not give any profits to the gov.

Question 18

Monopoly Capitalism (Sweezy) - 3 themes

Answer 18

1. Monopolization = concentration of capital,
2. Stagnation = profitable outlets,
3. Financialization = shift from production to finance, crisis of surplus

Question 19

Post-Industrial Society (Bell)

Answer 19

1) Information led and service oriented economy,
- —Manufactured goods —–> providing services
- —Science & Tech based incentives dominate
- —Globalization & Automation
2) “third sector” of non-profits
- –Providing Services
3) The Corporate & Business
- –How Business and Corporation are evoling

Question 20

Nudging (Thaler & Sustain)

Answer 20

Make it Easy, libertarian paternalism - individualism and influence over others
make people opt. out rather than opt. in

Question 21

Economic Life vs. Capitalism (Wallerstein- Braudel)

Answer 21

Wallerstien;
Capitalism = World System Theory = the modern nation state exists within a broad economic, political, and legal framework which he calls a “world-system.”
—individual societies or nation states cannot be understood without reference to the world-system in which they are embedded.
—three basic types of social systems The Modern World-System
1. Mini-systems
2. World empires
3. World-economies
Braudel
Economic Life =Emphases large-scale socioeconomic factors in the making and writing history

Question 22

Monopoly(Friedman)

Answer 22

—Technical monopolies
—Government intervention
—private collision
None of three are desirable
Monopoly and social responsibility

Free Trade
--Eliminated all restriction 
---Enable the world to come in as competition 
--To hinder monopolies 
Where do they come from?
---Derive from government privileged
Less Gov intervention