Chapter 5 Notes Flashcards
(36 cards)
What does it mean to “socialize” a cost?
To spread an individual cost to society
According to socialists, which economic goal should individuals strive to meet?
To promote the good of society
What did Marx say about production and distribution of goods and services?
“…from each, according to his ability, to each, according to his need…”
According to socialists, something keeps individuals from auctioning off their labor to the highest bidding firm. What?
Firms are not in competition–they are all on the same side.
What did Marx predict about unemployment rates? What reason did he give for his prediction?
Technological advances would replace labor with capital, causing a growing army of the unemployed
Why were socialists searching for new ways of selling socialism by the 1950s?
Because Marx’s predictions of worsening conditions of workers and worsening unemployment did not come to pass.
True, False, explain: Only government socializes costs and benefits that are socialized unless the government does it.
False. Some benefits and costs are not socialized by government, such as the benefit from national defense and the cost of pollution.
Costs that naturally spill over to others are called
External costs
What reason do capitalist philosophers give for not expanding the state to solve the problems of externalities?
The public choice school points out that government officials are self-interested and have limited knowledge. This means that 1) they may not be interested in solving problems, but getting money and reelection and 2) their limited knowledge may cause them to make things worse as they try to solve problems
How can the state maintain a socialist order if individuals disagree about their abilities, needs, or what is good for society?
By force
True, False, explain: Socialism can only exist with unelected dictators in power.
False. If costs and /or benefits are socialized by the legal system, socialism exists, whether or not the state is headed by a dictator
An economic system under which the state has title to all property is called
Communism
An economic system under which the state leaves property in private hands, but extensively regulates the use of property is called
Fascism
What is imminent domain?
The state taking private property, but compensating the owner
What is civil forfeiture?
The state taking private property from those it suspects of criminal behavior
Who typically receives the proceeds of a civil forfeiture?
The law enforcement body that seized the property
What is the latest rationale for socialism in the U.S.?
If the state produces any good with spillover benefits, the state is justified in dictating the use of individuals’ property
Why is the percentage of total spending done by the state a measure of the degree of socialism?
Because as the state spends more, it makes more of the economic decisions–that is, the individual, more and more, serves the state’s conception of “the good of society”
What do many capitalist philosophers consider the legitimate functions of the state?
Protection of property and persons
What does “the pursuit of happiness” mean?
The right to use property freely, to choose one’s profession, to make contracts, and to travel
If property rights are protected, how can an individual in a capitalist society advance materially?
By creating value through production and/or trade
How do markets encourage conservation of a resource that becomes scarcer?
By increasing its price
What do capitalist philosophers say about how markets solve fairness problems?
Markets may or may not solve fairness problems, but, given the limitations of the state, it might not do any better, and may make things worse.
What did Piketty and Saez’s research show?
Based on tax records, the average taxpayer’s income in the U.S. has been stagnant since the 1980s, while top incomes have grown.
