Week 4 Discussion Notes Flashcards
Influences we’ve discussed this far
Religion Land Feudalism Monarchy Industrialization
Phrenology Social Darwinism The Great Depression The Gilded Age Manifest Destiny Federalism
St. Augustine The Puritans Karl Marx Freidrich Nietzsche Thomas Hobbes John Locke Emile Durkheim
[Classical Economics/Adam Smith/ 1750-1790: American Revolution] Basic Beliefs- How would the market function?
“Laissez-Faire”- leave the market alone; it’ll self adjust
Competition between firms means the invisible hand will bring prices to an equilibrium without government intervention
Pursuit of individual interests will be most efficient
[Classical Economics/Adam Smith/ 1750-1790: American Revolution] Assumed causes of poverty under this theory
Monopolist greed could raise prices out of reach of working class
Production only happens to meet the demand of those with money; those without will have nothing produced for them
[Classical Economics/Adam Smith/ 1750-1790: American Revolution] Policy interventions advocated for under this theory
The free market is most efficient
May advocate for anti-trust laws, suspicious of monopoly behavior
Overturn any policies that limit or suppress the poor
[Malthusianism/Thomas Malthus/1790-1834: Gilded Age] Basic Beliefs- How would the market function?
Markets should be unrestricted for greatest economic growth
Redistribution inhibits growth
The affluent are morally superior, therefore the free market rewards them
[Malthusianism/Thomas Malthus/1790-1834: Gilded Age] Assumed causes of poverty under this theory
Endless procreation would mean there weren’t enough resources for everyone
People’s unrestrained breeding would cause them to be poor
Subsistence-level wages were natural for workers
[Malthusianism/Thomas Malthus/1790-1834: Gilded Age] Policy interventions advocated for under this theory
Nothing; financial assistance would cause poor to procreate-only by having fewer children could they escape poverty
Poverty is a moral problem with no government solution
[Marxism & Communism/Karl Marx/1835-1883: Civil War and Reconstruction] Basic Beliefs- How would the market function?
Politics and economics cannot be separated
- Therefore, the state is not just, but serves the interests of wealthy people who own means of production
[Marxism & Communism/Karl Marx/1835-1883: Civil War and Reconstruction] Assumed causes of poverty under this theory
The only real outcome of capitalism is that wealth becomes concentrated in the hands of a ruling class, at the expense of the workers
[Marxism & Communism/Karl Marx/1835-1883: Civil War and Reconstruction] Policy interventions advocated for under this theory
The government should control all means of production
Control by a central government will result in equality
[Keynesian Economics/John Maynard Keynes/ 1920-1946: Great Depression & WWII] Basic Beliefs- How would the market function?
Markets are inherently unstable
Government is needed to stabilize the economy and cushion the effects of economic downturns
“Laissez-faire” is not always appropriate
[Keynesian Economics/John Maynard Keynes/ 1920-1946: Great Depression & WWII] Assumed causes of poverty under this theory
Poverty is structural, not based on a person’s worth
Unstable economy will increase the number of people in poverty
[Keynesian Economics/John Maynard Keynes/ 1920-1946: Great Depression & WWII] Policy interventions advocated for under this theory
Government should step in during economic downturns to stabilize prices and promote full employment and economic growth
Human Capital Theory
Individuals are compensated relative to their ability
Differences in income/wealth we can explained by differences in skills or ability
An individual can increase their Human Capital by investing in education, job training, etc
