Unit 2

Luddism

A protest movement against industrialization and mechanization

smashed machines

Chartism

A program of political reforms sponsored by British workers in the late 1830s

6 Goals of Chartism:

universal manhood suffrage

equal electoral districts

pay for members of parliament

no property qualifications for parliament

secret ballots

annual elections

Communism

a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs

(AKA Revolutionary socialism or Scientific socialism )

Pros of communism

Reduces unemployment entirely

No poverty of class divide

Basic necessities are assured

Social goals put before those of elites

Cons of communism

Requires a violent revolution and a dictatorship in which power can easily be abused

Government money can be spent poorly

Less incentive to work hard

Less freedom of speech

Socialism

An economic philosophy which advocates for public ownership of production and social services

desires to improve income equality

Pros of Socialism

Better income/wealth distribution

Little unemployment

Production is planned to meet societal needs

Consumers receive basic necessities

Essential goods produced before inessential ones

Cons of Socialism

Technological innovation can be discouraged by the need to meet production quotas

Lack of incentive leads to low quality goods

Economy inflexible to change due to planning

Wasteful of resources

Consumers do not have a wide selection of goods (freedom of choice restricted)

Utopian Socialism

Did not wish for a revolution of any kind, rather to alter the worst parts of capitalism and build an ideal society

Robert Owen

A utopian socialist who set up a model community at his cotton mill in Scotland

Monetary policy (Monetarism)

Government policy that attempts to manage the economy by controlling the money supply and thus interest rates

(keeps inflation low but encourages competition)

Fiscal policy

Government policy that attempts to manage the economy by controlling taxing and spending

Karl Marx

Father of Communism

Classical Conservatives

Pro-monarchy

tradition

hierarchy

Milton Friedman

American Economist. Strongly promoted the idea of free trade and condemned government regulation and socialism.

Edmund Burke

A classical conservatism enthusiast

Welfare Capitalism

Advocated for classical liberalism but saw major flaws in laissez-faire capitalism

wanted rights of workers seen and to develop a social conscience

Theodore Roosevelt

Square Deal

Protected consumers, controlled large corporations, conserved natural resources

Progressive Party

A liberal political party formed by Theodore Roosevelt . The party adopted a sweeping reform program.

What ended Laissez Faire?

The great depression

What caused the great depression

Over-speculation of stocks, stock market crash 1929

Banking collapse

Farming dust bowl

John Maynard Keynes

British economist whose theories helped justify New Deal deficit spending

Supported demand-side economics

Government intervention used to correct recession

Keynes critique of Classical economics

If economic crisis cause business spending to decline (recession), income will fall and lead to further increase in demand

The government must stimulate demand through __Fiscal__ and __Monetary__ policy

encouraged social democracy and welfare capitalism

New Deal

control inflation by raising taxes and reducing government spending

Government Deficit

This occurs when a government spends more money than it takes in

Humanism

moral values are founded on human nature and experiences

Reaganomics/Thatcherism

Reverse in ideological thinking (1970’s-80’s)

Promoted less government intervention in economy

Neoconservative

(AKA supply side economics)

Critique of government intervention in economy

Distorts operation of supply and demand

Undermines self-reliance

Government deficits lead to high interest rates

Removes incentive to work

creates unfair competition for private businesses

Interest rates

The cost of borrowing money

Indicative Planning

Government suggestions to industry to expand in certain areas

demand-side economics

government spending in jobs and social programs will increase demand

supply-side economics

less government regulation will cause better business and create more jobs

trickle down theory

decreased income taxes for the wealthy would promote business and therefore the whole economy

buying on margin

paying a small percentage of a stock's price as a down payment and borrowing the rest with intention to pay it back

Inflation

a general increase in prices and fall in the purchasing value of money

Deflation

a decrease in the general level of prices

command economy

An economic system in which the government controls a country's economy

Feminism

A female movement for gender equality

Labour standards

Government enforced measures which protect workers

Labour unions

an organization of workers that acts to protect workers' rights and interests

Marxism

A branch of socialism that emphasizes exploitation of the working class due to capitalism

Mixed economy

an economic system combining private and public enterprise

Progressivism

The movement to democracy in America

Fought to end corruption in government and business

Advocated for rights of women and others left behind in IDR

Universal suffrage

Equal voting rights for all adult citizens of a nation

Collectivization

a system in which private farms are eliminated and peasants work land owned by the government

(Soviet Union)

Nationalization

Changing something from private to state ownership or control

Dissent

not cooperating with an established authority

Fascism

A political system headed by a dictator that calls for extreme nationalism and racism

no tolerance of opposition

Totalitarianism

government control over every aspect of public and private life

Consumerism

the protection or promotion of the interests of consumers.

Income disparity

the gap in income between rich and poor

Monopoly

Complete control of a product or business by one person or group

Social programs

services provided by government to reduce economic inequalities and promote the well-being of citizens

Reactionary

strongly opposed to change; conservative

social norms

Isolationism

When a country seeks to avoid alliances and involvement in international affairs, focusing instead on its own domestic issues and interests

Nativism

A political ideology that favours the interests of native-born inhabitants over those of immigrants

Stagflation

An economic condition characterized by a combination of no economic growth, high unemployment, and high inflation

when did capitalism begin to develop?

early 19th century

industrial revolution

who is the father of modern capitalism

Adam Smith (wealth of nations)

Laissez-Faire

Policy that government should interfere as little as possible in the nation's economy

production creates it's own demand

which system did capitalism replace

mercantilism

mercantilism

system that advocated tariffs and the king's involvement in the economy

Lassiez Faire

idea that government should stay out of business and economic affairs as much as possible

(developed by physiocrats, pushed by Adam Smith)

the invisible hand

term economists use to describe the self-regulating nature of the marketplace (coined by Adam Smith)

capital

The assets available to a business (buildings, machinery, vehicles, etc.)

man made items used to produce other items

Profit

the financial gain which drives free market economies

Why is competition important to capitalism

provides high quality goods at a reasonable price

supply and demand

the price of a good rises and falls depending on how many people want it (demand) and depending on how much of the good is available (supply) \n (price up if low supply high demand)

(price up if low supply high demand)

scarcity

A situation in which unlimited wants exceed limited resources

almost all nations/people struggle with this

role of banks in old capitalism

strictly used to hold people's money

role of modern banks

Intermediation

Management of payment systems

Offering financial services

Pros of Capitalism

Competition = high quality, low prices

Profit motive leads to productivity

Rapid innovation

Consumer influence, economy responds to demand

Cons of Capitalism

No "safety net"

class division

privatization of basic human services

exploitation

boom and bust

boom and bust

(Business cycle)

Rise in an economy (expansion)

followed by a downturn as the economy falls due to items losing value (recession)

how are the poor assisted in capitalism

they are not, poor individuals are considered a natural part of the economy

who introduced Keynes ideas

Franklin Roosevelt

("new deal" to re-inflate economy)

instability

A market economy is subject to

John Stuart Mill

Laws should reflect will of majority and respect rights of minority

Believed in personal liberty

supported women's suffrage

Empiricism

the view that knowledge originates in experience and that science should, therefore, rely on observation and experimentation

Utilitarianism

idea that the goal of society should be to bring about the greatest happiness for the greatest number of people

private ownership

A key component of the market system

private enterprise

another name for market economy

equilibrium

the point at which supply and demand are equal

individualism

the belief that everyone should be responsible for themselves

flint

micheal moore's hometown

monopoly

Complete control of a product or business by one person or group

profit margin

difference between production cost and selling price

the bunny lady

rhonda

profit

financial gain which drives free markets

sovereignty

an individual's ability to do as they wish

buy and sell what they desire

Friedrich Hayek

Wanted no government intervention.

Disbelieved in the use of Keynesian economics

Defended free market capitalism - system could fix itself

Robber barons

Industrialists or big business owners who gained huge profits by paying their employees extremely low wages

Divine right

Belief that a rulers authority comes directly from god

Anti-trust policy

A policy designed to ensure competition and prevent monopoly, which is the control of a market by one company

Friedrich Engels

Aided Marx in writing communist manifesto

Lenin

Founded the Communist Party in Russia

First Communist leader

led the October Revolution of 1917

Emancipation

Being set free of legal, social, or political restrictions

dissidents

people who oppose/disagree with the current government