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Flashcards in Chapter 5 Deck (70):
1

Socialism

an individual’s cost or value, we spread it to society, at large

2

Karl Marx

Founder of socialism; said production should come "from each, according to his ability, to each, according to his need"

3

Authoritarian Choice

Whether the state's decisions are made by a dictator, the peoples' elected representatives, or by popular vote

4

Original rationale for Socialism

Firms have more power than individuals, so they exploit workers

5

Socialists countered by saying...

Society has rigid classes and that firms are not really in competition with one another, but they are on the same team

6

Another original rationale

Fairness. Socialists view class structure as rigid said that members of the working class are forever disadvantaged by birth and cant rise above their station

7

Marx predicted that as technology advanced...

Machines would replace workers, which would leave masses unemployed, able to choose only between starvation and overthrow the system

8

By 1950's socialists were giving up on original ways of selling socialism since?

There was no reserve army of unemployed in non-socialist countries and many perceived that people could materially advance beyond parents's material wellbeing.

9

The exploitation rationale weakly survives, and

the fairness rationale- though without the rigid class ideas- is often used to justify socializing costs and benefits.

10

Modern rationale for socialism is....

Must socialize individual decisions by state force in order to counter nature's socializing effects.

11

External costs

Costs that naturally spill over to others. Some value also spills over to others.

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Externalities

External costs and external benefits

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Efficient decisions making in society requires that

firms pay the costs of their actions (ch1)

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With perfect regulation,

state can determine the amount of costs borne by each individual and force the firm to pay those costs, so production decisions will be efficient.

15

Since benefits are naturally socialized...

State socializes the cost, by forcing individuals to pay

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because efficient assessment of external costs and benefits must be done by those who have knowledge of all fecets of economy and....

nothing to gain from the regulatory process. DOES NOT DESCRIBE ANY REGULATOR, ANYWHERE!!!!

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State decisions makers protect...

their own self-interest and are not all-knowing.

18

Cannot depends on regulatory process to...

improve the disadvantages that nature's externalities give us

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In markets, people make decisions by...

balancing their own values & costs

20

Authoritarian decision makers choose for others based on?

their own assessments of values & costs

21

Marx's principle 1..

From each, according to his ability

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Marx's principle 2...

To each, according to his need

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If individuals do not agree with state's assessment of their abilities or distribution of goods, the state can respond by?

1. Allow individual choice, but this choice will not be based on what the state sees as serving societal wellbeing, so it will not maintain the socialist order.
2. Use force and the threat of force to maintain the socialist order.

24

It does not matter whether the state's decisions are made by dictator, elected representatives or majority rule....

force is necessary when individuals do not agree with socialist order

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The individual should act to promote the good of society, not...

the individuals wellbeing

26

The individual should act to promote the good of society, not the individuals wellbeings does not differentiate between...

various schools or socialist thought

27

The state must take some...

property rights

28

If state takes all property rights, we call it

pure communism

29

Fascism

System under which state does not take title to property, but orders the use of that property and the individual in any way it wishes

30

It does not matter whether in reality the individual is truly serving society of is serving the individuals who run the state...

After all, given that no individuals escape serving their own self-interest, all socialist orders serve the individuals who run the state.

31

US socialism is generally...

fascistic in nature

32

Eminent domain

Property is taken for state public use, but the owner is compensated.

33

Civil forfeiture

person is suspected of a crime and that person's property is seized because it is automactially suspected as having contributed to the crime.

34

Once state possesses the individuals property,

the individual must sue to recover it. often is not worth it because the price to sue.

35

Civil forfeitures are common when?

Individuals possess large amounts of cash, w/ law enforcement taking thee cash and not charging the accused w/ crime

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Latest socialist rationale

if the state provides any good from which the individual might derive external benefits, that no property is private and the state is justified in dictating the use of the individual's property and income

37

Latest rationale of socialism does not take into account the fact that..

the state originally confiscated individual's incomes to build the schools, roads, and courts

38

Percentage of total spending done by state is also a measure of

degree of socialism in a nation

39

When govt spending, as % of total economic activity grows...

the economy becomes more socialistic

40

If state-directed share of economy rises by 20%...

the state has become 20% more socialistic

41

Bastiat noted the equivalance between the state taking individuals income and...

commanding individuals to labor in service to the state

42

To ask for co-operation in form of money, from all citizens in a common enterprise, is in reality...

to ask of them actual physical co-operations, for each one of them procures for himself by his labor the amount he is taxed

43

Many capitalist philosophers consider the state's only function to be...

protection of property and persons.

44

The pursuit of happiness...

means the right to hold and use property freely, to choose one's profession, to make contracts, and to travel.

45

IN capitalist view,

society's best interest is promoted by individual w/ property rights making voluntary decisions.

46

Individuals who wishes to serve their own interest in a society where property rights are protected, cannot steal, so in order to improve their condition, they must?

Engage in value-creating production of trade

47

Adam Smith said...

He intends only his own gain

48

Adam Smith said...2

Led by an invisible hand to promote an end which was no part of his intention. by pursuing his own internet he frequently promotes that of the society more effectually than when he really intends to promote it.

49

Smith said he has never known much good done by...

those who affected to trade for the public good

50

Free makers give individuals incentives to

voluntarily serve

51

Socialism divorces consumption from productions and

takes the incentive to voluntarily serve

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Incentive problem of socialism

Socialsim divorces consumption from production, and in that way, take the incentive to voluntarily serve

53

Socialists favor regulations which they assert will conserve resources. What do capitalists view?

Capitalists view these regulations as wasteful, since they are not based on individuals' values of the resources and the products they produce, as reflected in market prices.

54

Capitalists charge the socialists...

rhetorically assert that they understand the value of resources better than individuals who make daily decisions regarding theses recourses uses

55

Don Boudreaux

economist at George Mason University. Leisure time (no money) vs stress (hella money)

56

Boudreaux points out that we cannot calculate how to compensate for...

these endowments. Things people like doing.

57

Socialists concentrate on pointing out only the difference in come, w/o

respect to how those difference came to be and propose that the state use force to correct the difference in come

58

Thomas Piketty and Emmanuel Saez (P&S) siaid

US has become more and more unequal since 1980. Income of top grew 200% and avg taxpayers income stagnated, going by only 3% in 30 yrs.

59

Burkhauser, Larrimore, and Simon (BLS) say..

P&S used individual taxpayer data, measure before tax-income, must also count transfer payments, such as social security and medical. P&S captured only money income and not fringe benefits.

60

Adjusted, 3% increase in incomes becomes...

37% increase

61

people sometimes gain income and sometimes lose income, making....

categories less useful than the news media or some researches realize.

62

With regard to socialists "fariness: rationale, capitalist philosophers point to the results of

the 2 systems. MILTON FRIEDMAN on how capitalism improves the material condition of the populace, at large. youtube vid.

63

SOCIALIZE THE CARE FOR POOR USING

TAX REVENUES

64

US poverty rate

16%, same as 40 yrs ago when state spent much less

65

When economic growth falls?

poverty eventually rises

66

When economic growth rises?

poverty eventually falls

67

Intrusive state makes the economy...

weaker and harms the poor

68

In free economy,

individuals contribute income in order to help others and there is competition between nonprofit firms to provide the most and best aid

69

Those who say private govt cannot replace govt giving should recall...

status quo minus fallacy
(ch2)

70

AS govt expands its attempts to help,

voluntary giving declines.