Mid-Term Short IDs Flashcards
Sticky Wages & Animal Spirits (Smith and Keynes)
Sticky Wages - more organized capitalism, prices and wages are not totally fluid, markets are not self regulating therefore are sticky, (Previously Small firms, Now Large Corporations)
Animal Spirits - people pursue irrational self interest, act through emotion
New Freedom (Hayek) / Old Keynesian view of freedom Equal freedom for each and all do as they please within the limits of law Power to do what you want
Old Freedom
“Freedom from coercion, freedom from the arbitrary power of other men…”
New Freedom
—“Freedom from necessity, release from the compulsion of the circumstances which limit the range of choice of all of us.’
Keynesian = Equal freedom for each and all do as they please within the limits of law
—Power to do what you want
Sovereign is he who decides the exception (Schmidt)
Only works if everyone wants the same thing
What is the state of “State of Exception”?
— Exception is principally unlimited authority
Who decides in the state of exception?
—-Liberalism has no answer
Fictitious Commodities (Polanyi)
Land, Labor, Money, from The Great Transformation, objects that are traded in the market but are not actually produced as normal commodities
Double Movement (polanyi)
1) birth of liberal creed
2) self protection of society
Markets expand through free markets but this causes the need for more regulation (= as markets grow so does the need for regulation),
Monetarism (Friedman)
= is an economic theory that focuses on macro effects;
—Relationship between government and individual,
—government mismanagement causes financial crises,
—crowding out leads to no multiplier effect,
—-government policies are slow to take effect,
Friedman wants
1) steady growth of money supply
2) rules rather than decision makers
Visible Hand (Chandler)
- –Physical Hand within the market
- —Created a world in which the invisible hand does not matter but the managerial hand is impacting people’s lives (the hierarchy of business)
Homo Economicus (Patel)
How to make sense of Economicus
What are the Arguments?
Natural State of Mankind –?
Profit-seeking
Patel - Humans are happier in these situations and homo economicus are
made up
Mills Monster
Homo Economicus= Ideal assumed by all economist that men are rational and
will always think of the margin and do what is most profitable
Rational = utility maximizing animals
Trying to get maximal utility or happiness
Patel Argues against this point
Government (Foucault)
How people are governed or govern themselves,
Consumer Sovereignty (Galbraith)
Lack of Consumer society
–Called the The Dependence Effect
1) Accepted sequence - demand drives supply
—-Market System
2) Revised sequence - producers create demand
—- Industrial System
——(How? Marketing and Advertising
——-Machinery of consumption demand creation
Consumers are no longer sovereign
Do we have unlimited wants?
Technostructure (Galbraith)
Hired managers in industry make the decisions
— NOT the stock owners
Dependence Effect (Galbraith)
-Lack of “consumer sovereignty”
1) Accepted sequence
— demand drives supply = Market System
2) Revised sequence -
producers create demand = Industrial System
—-How? Marketing and Advertising
Consumers are no longer sovereign
Procyclical changes in supply of credit (Kindleberger)
Problem: Pro-cyclical Tendency of Credit
—–Credit expands when times are good and contracts when economy slows, credit exacerbates boom & bust,
Solution: lenders of last resort
Lender of last Resort (Kindleberger)
Monetarism won’t work to fix financial crises, must have someone to provide credit during panics
The Corporation (Drucker vs Film)
Drucker = Purpose Of Corporation
1) NOT the maximization of profit
——Profit = a need & limitation
2) The purpose of business is to “Create a customer”
—Basic Functions= Marketing & Innovation
FILM = Purpose of Corporation
1) Corporations are an externalization machine
——Pressure is on cooperation to make profit and externalize its problem
——Profit always becomes bottomline because it is always in competition
Creative Destruction (Schumpeter)
Creation = innovation, destruction = old ways rendered useless, dynamic disequilibrium… new innovation brings destruction to older innovations
Socialization of Risk Privatization of Reward (Mazzucato)
Gov makes the difficult, uncertain investments
Gov invests in human capital and infrastructure
In-turn private companies take all the reward which is credit for break throughs, This relates directly to apple. and do not give any profits to the gov.
Monopoly Capitalism (Sweezy) - 3 themes
- Monopolization = concentration of capital,
- Stagnation = profitable outlets,
- Financialization = shift from production to finance, crisis of surplus
Post-Industrial Society (Bell)
1) Information led and service oriented economy,
- —Manufactured goods —–> providing services
- —Science & Tech based incentives dominate
- —Globalization & Automation
2) “third sector” of non-profits
- –Providing Services
3) The Corporate & Business
- –How Business and Corporation are evoling
Nudging (Thaler & Sustain)
Make it Easy, libertarian paternalism - individualism and influence over others
make people opt. out rather than opt. in
Economic Life vs. Capitalism (Wallerstein- Braudel)
Wallerstien;
Capitalism = World System Theory = the modern nation state exists within a broad economic, political, and legal framework which he calls a “world-system.”
—individual societies or nation states cannot be understood without reference to the world-system in which they are embedded.
—three basic types of social systems The Modern World-System
1. Mini-systems
2. World empires
3. World-economies
Braudel
Economic Life =Emphases large-scale socioeconomic factors in the making and writing history
Monopoly(Friedman)
—Technical monopolies
—Government intervention
—private collision
None of three are desirable
Monopoly and social responsibility
Free Trade --Eliminated all restriction ---Enable the world to come in as competition --To hinder monopolies Where do they come from? ---Derive from government privileged Less Gov intervention
