Philosophy Terms

Globalization

the interconnectedness of national economies, facilitating the movement of goods, services, and capital across borders, thus creating economic opportunities and challenges

Feudalism

a medieval European system where land was exchanged for loyalty, military service, and labor which created a social hierarchy

Capitalism

an economic system where private individuals or businesses own capital goods, and the free market controls the production of goods and services

Mercantilism

economic system where governments regulated trade to build national wealth and power, focusing on exporting more than important to accumulate gold and silver

an economic practice from the 16th to 18th century, where nations sought to increase wealth through export surplus and controlled trade

Free Market Economy

a free market is an economy with minimal or no government control of supply, demand, or prices

Socialist Democracy

is a political and economic system that combines democratic political processes with a socialist-leaning economy, often emerging from the voluntary transition of a capitalist society

Marxism

A social, political, and economic philosophy named after Karl Marx. It examines the effect of capitalism on labor, productivity, and economic development and argues for a worker revolution to overturn capitalism in favor of communism

Plutocracy

a form of government or society controlled exclusively by the wealthy, where power is held by individuals or families with significant financial resources

Oligarchy

a system of government where power is held by a small group of people, often based on wealth, family ties, or military control

Economics

studies how societies manage scarce resources to produce, distribute, and consume goods and services

Confirmation Bias

is the tendency for people to actively seek out, interpret, and favor information that confirms their pre-existing beliefs while disregarding or discounting contradictory evidence

Super PAC (political action committee)

a political action committee that can raise and spend unlimited money to support or oppose candidates, but cannot donate directly to them or coordinate with campaigns

Earned Income Tax Credits

is a refundable federal tax credit designed to assist low- to moderate-income working individuals and families, particularly those with children

Goodwill

an intangible asset recorded when one company acquires another for a price exceeding the fair market value of its net identifiable assets

Current US Tax Structure

a progressive system where tax rates increase as income rises, funded mainly through federal income taxes, payroll taxes (Social Security & Medicare), corporate taxes, and state/local taxes like sales and property taxes

is a progressive system, where higher income earners pay higher marginal tax rates

GDP (gross domestic product)

measures the total value of everything a country produces in goods and services over a set period

Consumer Index

a measure that tracks the average change in prices of a basket of goods and services over time, used to gauge inflation

World Bank

an international organization dedicated to providing financing, advice, and research to developing nations to aid their economic advancement

IMF (International Monetary Fund)

an international organization that provides financial assistance and advice to countries to stabilize their economies, manage debt, reduce poverty, and promote global financial stability

The Monetary Fund

an organization that lends money and gives financial guidance to countries to help stabilize their economies and manage currency or debt issues

ETF (exchange-traded fund)

is a basket of securities—such as stocks, bonds, or commodities—that trades on exchanges, similar to individual stocks

Consumerism

is the belief that increasing the consumption of goods and services is beneficial for individual well-being and economic growth

Communism

an economic and political ideology advocating for a classless society with communal ownership of the means of production, directly opposing capitalism and private property

Libertarian

is a political and economic philosophy that advocates for minimal government intervention in both personal and economic matters

It emphasizes individual liberty, free-market capitalism, and the protection of private property rights

Democracy

a system of government where all citizens have a direct say in decisions and laws

Representative Democracy

a system where citizens elect officials to make decisions and pass laws on their behalf, rather than voting on everything directly

Hannah Arendt

a 20th-century political theorist known for her work on totalitarianism, authority, and the nature of power, particularly in books like The Origins of Totalitarianism and The Human Condition. She explored how societies can lose freedom and the banality of evil. Also wrote the promise of politics that we discussed in class

George Will

a U.S. political commentator and columnist known for his conservative commentary. He writes about American politics, government, and culture, emphasizing limited government, tradition, and “ordered liberty”

Infrastructure

the essential, long-lived, and capital-intensive physical systems—such as transportation, utilities, and communication networks—that support a region's or nation's economic development and productivity

ESG (environmental, social, and governance)

are a set of standards for a company’s operations that socially conscious investors use to screen potential investments

It is a framework used to measure a company's sustainability and ethical impact, incorporating environmental stewardship, social responsibility, and transparent governance into financial analysis

Cryptocurrency

a digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend

NFT (non-fungible token)

is a unique, non-interchangeable unit of data stored on a digital blockchain, which serves as a secure, verifiable certificate of ownership for digital or real-world assets

Crypto Exchange

is an online platform that acts as an intermediary for buying, selling, and trading digital assets, such as Bitcoin, using fiat money or other cryptocurrencies

Index Fund

is a type of mutual fund or exchange-traded fund (ETF) designed to mimic or replicate the performance of a specific market benchmark, such as the S&P 500

Managed Fund

an investment fund actively managed by a professional who chooses assets to try to beat the market or meet specific financial goals, usually with higher fees

401(k)

is a company-sponsored, tax-advantaged retirement savings account that allows employees to contribute a portion of their paycheck before or after taxes

Roth IRA

an individual retirement account where contributions are made after-tax, so withdrawals in retirement are tax-free, including any investment gain

Micro vs. Macro economics

Microeconomics studies the behavior of individual people, households, and businesses and how they make decisions about resources and prices.

Macroeconomics looks at the economy as a whole, focusing on national income, inflation, unemployment, and economic growth.

Fatal Conceit

a concept by economist F.A. Hayek describing the mistaken belief that humans can perfectly design and control complex economic and social systems, often leading to unintended negative consequences.

Closed cognition

a thinking style characterized by rigid beliefs, resistance to new ideas, and limited openness to evidence or alternative perspectives

Discretionary Spending

refers to non-essential expenses—costs that individuals or businesses can live without

These are "wants" rather than needs, such as entertainment, dining out, and luxury goods

Economies of Scale

are cost advantages companies gain through efficient, increased production

Market Economy

is an economic system where production, prices, and purchasing decisions are determined by the laws of supply and demand, rather than government control

Social Capital

the value derived from positive connections, networks, and relationships, enabling individuals or organizations to achieve goals more effectively

Welfare

government-funded assistance providing subsidies for food, housing, and healthcare to individuals and families with incomes below the federal poverty line

Economic Parity

a state in which individuals, groups, or regions have equal access to economic opportunities, income, and resources, minimizing wealth and income gaps

Lobby

a group of people or special interest group that bands together to persuade government officials to act in ways that benefit their specific interests, such as influencing legislation, regulations, or policies

1. Number of Lobbying Associations: 2,435

2. Number of Lobbyists: 13,000

3. Average Salary: 50 - 100 thousand 

4. Largest Lobbying Group in the US: US Chamber of Commerce

Diffusion of Responsibility

is the phenomenon where individuals feel less personal accountability to act or intervene in a situation as the number of other people present increases, assuming someone else will take charge (the bystander effect), leading to inaction, riskier group behavior, or less contribution to group tasks

Cognitive Dissonance

as the mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time

Corporate social welfare

a self-regulating business model where companies integrate social and environmental concerns into their operations and interactions with stakeholders. The core philosophy is that businesses have a duty to society beyond merely maximizing profits for shareholders

Social Capital

Herbert Simon - he was critical of the term, arguing it was poorly defined and should be replaced by "community governance". His philosophy on the topic focused on the behavioral assumptions and institutions that underpin social interaction, particularly in the context of economics and decision-making.

Meritocracy

is a system in which advancement, rewards, and positions of power are assigned based on an individual's demonstrated talents, abilities, and efforts, rather than on wealth, social class, or nepotism

%

personal consumption expenditures—which include consumer goods and services—drive approximately 67.7% of U.S. GDP as of Q2 2024. Consumer goods are final products (durable and nondurable) purchased by individuals for personal use, rather than for business production.