DECK 5 Flashcards
(62 cards)
1
Q
What is Nudge?
A
You push people towards decarbonization, a nobel prize concept
2
Q
How critical is freedom of though, expression and speech to innovation?
A
A good example is the RENAISSANCE period
3
Q
What does innovation mean?
A
Technological -
Political - Nudge
Social -
4
Q
Greek Philosophy and Arts
A
- Socrates
- Plato
- Aristotle
5
Q
Dark Ages, Medieval Period in Europe
A
- Scientific advances at a sandstill
- Rule of royal famillies/dynasties
- Arts focus on religious imagery
6
Q
History of China
A
- Advances during Han and Ming Dynasties
- Many energy-related innovations
7
Q
History of the Islamic Golden Period
A
- During Abbasid Caliphate
- Algebra, chemistry, astronomy
8
Q
Renaissance
A
- Transition from gark Ages
- Literally rebirth (Greek thought and art)
- Focus no longer just on religious imagery
- Religion in science, think Copernicus, Galileo
9
Q
Reformation
A
- Catholics
- Protestant
10
Q
Enlightrnment, Age of Reason
A
- Rationalism and empiricism
- Think Descartes, Newton
- Locke (separation of church and state)
- Montesquieu (separation of powers)
- Adam Smith, the invisible hand, markets, decentralization of economic activity (private property)
11
Q
What happend to GDP in the industrial revolution?
A
GDP skyrocketed globally from 1800 - 2000
12
Q
What is the fundemental change in the human condition that drives the advances of the industrial revolution?
A
- Innivation and advances in thought drive increases in per capita incomes, lomnger life-spans, thecnological advances, and social or political advances
- These all happeed due to the increasing rapid rate of increasing the freedom of thought
13
Q
18th Century Revolutions
A
- 1776 American Revolution installs a Constitional Government (people have teh right to abolisha nd create a new government if the initial government becomes destructive)
- 1789 French Revolution (followed by regression in the ‘reign of terror’ Napoleonic era)
14
Q
Late 19th Century Revolutions
A
- Capitalism (accumulation of financial and physical capital to achieve greater productivity)
- Changes in social conditions (workers can live a better life now)
15
Q
What is the right size and role of the government?
A
We need to ask, how do we draw the line between individual resppnsobility and responsibilities that belong to the state and its institution?
16
Q
In the late 19th century, what did Dickens write about?
A
He wrote about the miery and destitution of workers and their families
17
Q
What are the fundemental problems of the system of capitalism?
A
- Capital should be communally owned
- Game-changing book dedicated to the subject
The book was called Das Kapital; by Karl Marx
18
Q
What places experienced rapid GDP growth and democratization?
A
- Western Europe
- North America
19
Q
Which empires persisted?
A
- Russian Empire
- Austro-Hungarian Empire
- Ottoman Empire
- British Empire
- French Empire
20
Q
Some would —– the coming World War
A
Not survive
21
Q
Others would be ——–
A
Permanently Transformed
22
Q
What did the industrial revolution lead to?
A
- Accumulation of Capital, in the hands of the few
- Destitution, societal disruptions, and great inequality
23
Q
Call for communal rather than private ownership of the means of production
A
Marx – Das Kapital
24
Q
What were the two competing models that emerged in the early 20th century?
A
- Markets and Capitalism
- Central Planning and Communism
25
What were the two cataclysmic events that began in the 20th century?
- First World War and the dissolution of major empires (Ottoman, Austro-Hungary)
- Russian Revolution
26
What was the solution to the excesses of capitalism seem by many intellectuals?
A bigger role of the government
27
At the extreme, what was seem as the solution to the inequalities of capitalism and lead to a more efficient economy?
Centralized (government) ownership of the means of production
28
What happened in the Russian Revolution in 1917?
Replaced the Tsarist regime with communism. In 1949, after decades of conflict, Mao's forces would be victorious and communism would prevail in China
29
What was the fundamental ideological battle of the 20th century?
- Should we reply on capitalism and markets as the fundamental organizing principle of economic activity?
- Should we rely on the government to direct how much to produce, who produces it, and who receives it?
30
What are the other Fundamental Ideological Battles of the 20th Century?
- Markets vs Central Planning
- Capitalism vs Communism
- Small government or Big Government?
31
What are possible outcomes of Central Planning
Nobel Prize Winner, Amartya Sen believes that famines are unlikely to occur in functioning democracies in part because of free speech
32
How many deaths were due to the Soviet famine in 1930 (collectivization)?
5+ million deaths
33
How many deaths were due to the Chinese famines of late 1950s (great leap forward)?
30 million deaths, (Vaclav Smil estimates)
34
What were the three world wars in the 20th century?
WW1- The collapse of aged empires
WW2- The ruse and fall of fascism
WW3- The cold war
35
What was the origin of regulations in Western Market-Based Democracies?
Failures of the "market"
- Early 20th century monopoly abuses (Rockefeller and Standard Oil Trust)
36
Explain the Great Depression
- Failure of "markets" to provide employment during the 1930s
- Central planning advocated by many as a better approach
37
What did they mean when they wanted to increase regulations?
From the 1930s on, steady increase in regulation, government ownership, and "nationalization", and expansion of the role of government
38
Explain the Great Stagflation
- Government Failure
- High inflation and unemployment in the 1970s
- People began to ask whether the government is too large and whether the pendulum has swung too far to the left
39
Who is Alfed Kahn?
He was a professor at Cornell University brought in by Jimmy Carter to deregulate airlines
40
What changed in the 1980s?
- The tide turned towards liberalization, deregulation, and privatization
- Election of Western Governments that seeked to reverse the tide -- Thatcher, Reagan, Mulroney
- It was decided to have competition where possible, and regulation where necessary
41
What happened in the era of deregulation, liberalization, and privatization?
- Rejection of Central Planning
- Collapse of Soviet Union
- Expanding belief in economic and political benefits of free markets and private ownership
- Economic liberalization and privatization in China, Vietnam, Eastern Europe, and South America
42
What were the failures of deregulation?
- Enron failure in 2001
- Collapse of California electricity market in 2001
- Financial Markets meltdown in 2008 (too big to fail)
- Is rising inequality a consequence of deregulation, or other factors? (just a question to have in mind)
43
Where is regulation to be necessary in certain sectors?
- Financial Markets
- Energy Markets
44
What were the central failures of central planning, communism?
- Much slower economic growth
- Weak innovation (think Nobel Prize) There seems to be a negative correlation between the number of nobel prizes in a country to gdp
- Concentration of power led to an abuse of power
45
What are the two guiding principles?
Separation and Subsidiary
46
Explain separation
Western Democracies rely on certain critical 'separations' to ensure that power does not become overly concentrated
1. Powers
2. Religious institutions
3. Government from Economy
4. Media
47
Explain Subsidiary
- Decisions should be taken and tasks should be performed at the lowest level at which they can competently be decided and completed
- The government should only undertake tasks and responsibilities if individuals or groups cannot fulfill them competently on their own
48
In the principle of Subsidiary, what are the arguments that favour decentralization?
- Individuals should take responsibility for themselves, or else eventually they lose the ability to do so
- Centralization concentrates power, which can be abused if they are not regularly checked up on
- Unnecessary centralization can lead to inefficient resource allocation
49
What are the benefits from the principle of subsidiary?
- Provides a rationale for markets (as opposed to central planning)
- Helpful in establishing regulatory boundaries
- Used for delineating boundaries between local, provincial, and federal government responsibilities
- Cornerstone for Maastricht Treaty which establishes the European Union -- limits infringement of national sovereignty
50
In the context of energy, what are applications of the principle of subsidiary?
- Recall "competition where possible, regulation where necessary"
- Informs the discussion of how to deal with climate change and what would be the best tool
51
Applying the Principles of Subsidiary, how can carbon taxes or feed-in-tariffs help climate change?
Carbon Tax
- By applying a sufficiently high tax, users are discouraged from burning as much carbon-based fuel and encouraged to switch to other sources of energy
- Think about Cap and Trade
Feed-in-Tariffs
- Regulators or government decides to promote certain types of renewable energy by requiring that they be paid higher prices
- In effect, the government can select technologies and appropriate prices to be paid for electricity from these technologies
52
What can the Principle of Separation do to benefit the economy/
They have the mechanisms to:
- Reduce concentration of power
- Create checks and balances for power abuse
- De-politicizing implementation of policy
53
What did Lord Action say in a letter to Bishop Mandel Creighton in 1887?
"Power tends to corrupt, and absolute powers corrupts absolutely"
"Great men are almost always bad men"
54
What is Shakespeare's Macbeth examples towards the concentration of power that aligns with Lord Action's statement?
Someone who began in a brave and even virtuous path and then eventually becomes progressively more evil as he pursues and gains power
55
Talk about the argument of concentration of power in politics?
- Plato sets out the argument that the best form of government is a philosopher-king who has absolute power
- But Plato also did no solve the problem of succession - how to ensure that the ruler that is selected is truly virtuous?
- Democratic forms of government seek to distribute rather than concentrate power
56
Talk about the argument of concentration of power in economics?
- Economists believe that competition is far better than monopoly
- If monopoly cannot be avoided, it must be controlled by laws, regulations, and agencies of government
57
What are some examples of Separation?
1. Government sets policy, regulator implements them
2. Governments have recognized the importance of independence of Central Banks, Governors are appointed to extend terms
- Bank of Canada
- US Federal Reserve
- Bank of England
58
What are some of the benefits of the example of separation?
- Integrity of currency or money supply is so critical that separation of government and the Central Bank is institutionalized
- Energy decisions are often more susceptible to politics of the day
59
What are the Objectives of the Green Energy Act 2009 (Ontario)
General Objectives:
- Promote renewable energy
- Promote conservation
Promote 'green jobs'
More Detail
- Establish 'feed-in-tariffs'
- Promote 'smart-grid'
- Enables various 'directives'
60
Provide a brief summary of the Green Energy Act in 2009 (Ontario)
- Created the potential for fundamentally changing the institutional structure and energy related decision making
- Previously, the OEB, the prime regulator, operated ostensibly at arms-length from the Provincial Government
- Under the GEA, the government provided itself much broader scope to directly influence choices through the use of 'directives'
61
What is Yatchew's take on the Green Energy Act in 2009?
The green energy act has potentially wide ramifications for energy related decision making in the province. The regulator is subject not only to government policy but to directives on the specifics of implementation. There are risks that political exigencies will lead to less than optimal outcomes. It would be preferable to return to the model where the regulator has greater autonomy.
62
According to Auditor Reports, what can be the cost of cancelling power plants?
- 1.1 Billion Dollars
- Ontario Liberal gas-plant costed 1 Billion Dollars
