Unit 2: History of Growth, Capitalism, and Modernity Flashcards
System
A set of components working together as part of a mechanism or network. It often can be defined as having specific goals, purposes, or outputs. They are exist at many scales and have interrelationships between each other.
Social system
All systems where humans (or groups of humans) are the primary components.
Economic system
Social system of production, allocation, distribution, and consumption of goods and services within a society.
Economic growth
When the output of an economy grows due to more land, labor, or capital (equipment, animal power, fossil fuels, etc.) being devoted to the production of goods and services. The productivity and consumption of these factors are increased.
Paleolithic era
Anatomically modern humans emerged and formed small social groups with very simple social systems of governance and economic production/exchange.
Overall production and consumption in society was very low.
Technology
Knowledge and processes that can be applied to expand human capabilities.
Neolithic era
The first agricultural revolution transformed human social systems. Settlements form and domestication of plants and animals begins and increasingly complex social systems evolve.
Individual Property Rights Institutions form for plants, animals, and land.
Institution
Structures and mechanisms of social order and cooperation governing the behavior of a set of individuals. They are the human devised constraints that shape human interaction. All of the rules (formal) and norms (informal) that affect members of society.
Property rights
Rules or formal institutions that outline who has ownership over property (and if it can be sold), who can use it, what can be done with it, and who can make further rules regarding its use.
Early modern era
The Renaissance introduced the rise of the scientific method, nation states, capitalism, and global interaction. The influence of the Catholic Church (over knowledge, governance, and economic production) is reduced and liberalism prevails.
Classical liberalism
Political and social philosophy that promotes individual rights, civil liberties, democracy, and free enterprise. Contrasts with individuals being seen as having inherently different worth and status due to their birth status or religious standing.
Late modern era
Health improvements lead to population growth during the second agricultural revolution and the industrial revolution.
Capitalism and government led modernization (and related institutions) prevails.
Second agricultural revolution?
Europe common lands were declared private property through enclosure acts, which increased incentive to improve land productivity and led to the modernization of farming. Increased yields with new kinds of crops and innovative farming practices were developed which increased economic growth and freed up labor for other forms of work.
Industrial revolution?
A massive increase in coal consumption and beginnings of fossil fuel driven economy
Accompanied/Accelerated by major institutional changes led to a dramatic productivity increases and to ‘globalization’.
Homo Economicus?
An ideal self interested individual that does a perfect cost-benefit analysis on every decision (production/consumption) based upon their own preferences.
Freedom of choice
The person being able to choose his own course of action and his own pattern of living, subject to the requirement that he shall not act so as to violate the freedom of choice of others.
Free market theory
Decision making power is in the hands of the individual, who is incentivized to maximize their own productivity, and to value and protect their property. Prices are driven by supply and demand.
Capitalism
System based on the principles of free market theory. An important factor in increasing economic growth because it incentivizes increased production
Gross Domestic Product
Total value of final goods and services produced/sold within a territory during a specified period.
20th Century
Economies start adopting capitalism and increase modernization efforts. These efforts resulted in a sharp rise in population and heavy GDP growth, however this also led to frequent market crashes.
