basic concepts Flashcards
(17 cards)
When does economic conflict arise?
When competing interests or priorities clash over allocation of scarce resources.
What are the primary causes of economic conflict? [10]
- Scarcity of Resources
- Divergent Stakeholder Objectives
- Income Inequality
- Trade-offs in Policy decisions
- Globalisation and Trade
- Resource Ownership and Distribution
- Market Failures
- Culture and Ethical Considerations
- International Economic Dependencies
- Rapid Economic Change
What is the fundamental cause of economic conflict?
Scarcity.
Resources such as land, labour, capital, and raw materials are limited but human wants are virtually unlimited.
What is an example of a trade off with scarcity of resources?
A government may face conflict over whether to allocate scarce land for agricultural purposes or urban development
What are types of conflict in stakeholder objectives? [3]
- Conflicting Business Goals
- Consumer-Producer conflicts
- Employee-Employer Tensions
How may conflicting business goals be a trade off?
Businesses often prioritise profit maximisation while governments and consumers may emphasise environmental protection, safety standards or ethical practices.
How may Consumer-Producer Conflicts be a trade off?
Consumers want affordable prices and high quality goods, while producers aim to maximise profits which may result in higher prices or lower product quality.
How may Employee-Employer Tensions cause a trade off?
Workers demand better wages, benefits and working conditions while businesses aim to reduce labour costs to remain competitive.
How can Income Inequality lead to economic conflict?
Differences in income distribution often lead to tensions between high-income and low-income groups.
Policies to address inequality such as progressive taxation or welfare programmes can generate conflict among stakeholders.
What is an example of a trade off due to income inequality?
Tax increases on wealthy individuals or corporations may be resisted by those who believe it discourages investment + economic growth.
How can globalisation and trade create conflicts?
Can create conflicts between nations and within societies due to unequal benefits or perceived threats.
What are International Trade Conflicts?
Countries may impose tariffs or subsidies to protect domestic industries leading to retaliation and trade wars.
What is an example of conflict due to natural resources?
Conflicts between countries over access to freshwater sources such as the Nile River.
How can Market Failures cause conflict?
- Negative Externalities, e.g pollution and deforestation creating social costs can lead to tensions between businesses and affected communities.
- Public Goods - disagreements may arise over who should pay for or manage public goods such as national defence, healthcare and education. e.g debates over government intervention in healthcare to address inefficiencies or inequality
Why may cultural and ethical considerations cause conflict?
Can cause problems when global corporations operate in different cultural contexts. E.g. the introduction of genetically modified crops may create conflict in societies where traditional farming practices are valued.
How can international economic dependencies cause conflict?
Countries often depend on one another for trade, investment and financial aid. Unequal dependencies or exploitative practices can lead to tension.
Debt conflict - developing countries burdened by debt obligations may clash with creditors over repayment terms. E.g. disputes between developing nations and international financial institutions such as the IMF over austerity measures.
How can rapid economic change cause conflict?
Technological advancement - automation and technological changes can lead to job losses in certain sectors, creating conflict between workers and employers.
Economic restructuring - shifts from traditional industries to new sectors e.g coal to renewable energy can cause social and economic tensions. The closure of coal mines leading to unemployment and community protests.
