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37 Cards in this Set
- Front
- Back
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What are the main features of the fordist economy? |
-fast rate of technological improvement (mechanization and automation of industries) -mass production and consumption (standardization of production, consumerism, instant gratification, energy-intensive but also possibly unsustainable)) -urbanization -substantial improvements in education and healthcare |
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Name the 2 reasons an increasingly larger part of the economy became state-run after the great depression. |
1. increased demand for public goods 2. notion that state-run economy is conducive to less volatile GDP |
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What are the 2 factors on which the fordist economy depended, exogenous to economic policy? |
1. high demographic growth: took place after WWII, ended by cultural changes 2. high rates of economic growth and employment: dependent on cheap energy, ended by new technology and high energy prices |
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Why might the growth rates of the fordist era have been unsustainable? |
Governments struggled to balance budgets when exogenous factors stopped growing at previously observed rates. |
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What are the differences between the forest economy and the postindustrial economy? |
Fordist: -extensive regulation -organization and institutions over markets -collectivism, mass production, and mass consumption -one size fits all solutions -national industrial champions -big capital (schumpeter) and big governance (keynes) Postindustrial: -flexibility and deregulation -markets over hierarchies -importance of networks -individualism over collectivism -service-intensive, customer-centric |
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What are the 2 recent trends of the postindustrial society? |
1. access more important than ownership 2. experiences more important than acquisitions |
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Name some of the few main features of the information society. |
-significant role of creation, distribution, manipulation and use of information -information goods represent increased share of GDP -emergence of cognitariat/creative class -increasing social and economic relevance of cognitive skills and abstract thought compared to other skills -increased reliance on intellectual property rights and collaborative networks |
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What are the likely causal factors of the information society? |
-Technological factors: exponential ris in our ability to store and process information (computer revolution, internet, www, etc) -Other factors: cultural, social & ideological (postmodernism, decreasing collectivism, loss of appeal of communism), economic (poor performance of western economies, 1973 oil crisis), and cold war rivalry (US investment in new tech in order to match USSR in key moments) |
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Who developed the first internet network? |
ARPANET (US research agency) |
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What are the mainstream interpretations of the information society? |
1. neoconservative: a feature of the emerging society is the demise of homo economics - preindustrial (people vs. nature) - industrial (people vs. fabricated nature) - postindustrial (people vs. other people) - emergence of caring economy 2. continental european interpretation: shift towards individualism. expansion of markets, downfall of planning and erosion of national sovereignty - fordist ROA unsustainable - fordism increasingly hard to maintain with globalization - nation-states undermined by MNCs - emphasis on flexibility of employees, production and consumption 3. Libertarian interpretation: - Hayek: price signals are permitting economic agents to communicate tacit information to each other - allowing emergence of frictionless markets & reduced need for planning -scepticism towards institutional ability to aggregate preferences 4. Notion of a network society: optimistic - networks provide sociability, info, social identity etc. - hacker ethic: adventure and lawlessness - labor theory of value replaced with knowledge/info theory of value - concept of prosumer 5. more pessimistic recent theories: less self-satisfaction, less ties with local communities |
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How can the information society lead to inequality? |
Inequality in terms of quality and quantity of information available point to net winners and losers of the information revolution. |
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Why was deindustrialization not as lucrative as predicted? |
-technology did not follow expected path -importance of manufacturing in the creation of wealth (industrial economy) - manufacturing allows developing countries to catch up with advanced ones |
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What was the fall of manufacturing in terms of employment? (US & UK) |
From 25% to 10% in the US and from 33% to 10% in the UK |
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What was the fall of manufacturing in terms of GDP (US & UK)? |
GDP remained constant in the US, but fell from 25% to 15% in the UK |
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What are the likely explanations for why manufacturing is plateauing as a share of employment? |
1) higher productivity growth
2) low elasticity of substitution between manufacturing and other sectors 3) secular shift in demand away from manufacturing and toward services - 2 and 3 are mutually reinforcing |
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Why are emerging economies plateauing at increasingly lower levels of manufacturing share of GDP (premature deindustrialization)? |
1) differential tech improvement 2) secular demand shift away from manufacturing 3) terms f trade of manufactured goods deteriorated - likely only a combination of all 3 factors account for observed shift in relevant variables |
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What are the economic and political implications of premature deindustrialization? |
Economic: - free trade might compromise economic convergence - growth could come from services, but they are highly skill-intensive and not all are tradable Political - no strong unions or possible social actors without manufacturing - western democracy is historically dependent on this particular institutional arrangement |
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What are the economic criticisms of Rodnik's 'premature deindustrialization argument? |
- does not address the key argument that free trade is welfare-improving at the global economic level - 20th century import substitution policies have not performed well historically - there is actually little opposition to globalization in emerging economies (contrary to what his argument implies) - no explanation for shift in secular demand |
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What are the political criticisms of Rodnik's 'premature deindustrialization argument? |
- highly essentialist: no evidence that LLK based institutional/political arrangement is appropriate today - representation of white blue collar males as the essential working class - definition of democracy used emphasizes role of social actors and mediators (collectivism) over empowerment of individuals (individualism) - |
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What are the characteristics of information goods? |
- economic value is derived from informational content - industries such as music, broadcasting/media, publishing, fine arts, design, software, R&D, teaching, etc. - vs. material goods |
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What are the key features of information goods? |
1) near zero marginal costs 2) less efficient excludability - piracy, etc. 3) uncertain utility - appreciation might depend on prior training |
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What is Jeremy Rifkin's zero marginal cost argument? |
Technology of the previous era encouraged a transition from collective ownership to private ownership and from traditionalist economy to a capitalist one. |
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Why is current technology conducive to zero marginal cost trend? |
- if prices go towards zero, profit driver progressively disappears as a motivational factor - society moves from scarcity to abundance - democratization of: 1) culture - blurring of professional vs. amateur divide with respect to intellectual property 2) higher education - emergence of MOOCs 3) electricity - energy internet 4) manufacturing - 3d printing 5) healthcare 6) collaborative platforms 7) currency - bitcoin |
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Why was the 2008 great recession an "a-ha" moment for people? |
People began to doubt the advertising-driven model of never-ending goods and capital accumulation |
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What are cultural goods? |
A subset of information goods that has been produced with the beginning of history/civilization. |
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Why might artistic markets display winner-take-all features? |
- technology - inequality in talent endowments - work efforts (variance in work-leisure lifestyle) - copycat behaviour of buyers/collectors/users - network effects (coordinating consumption) - higher price elasticity for entertainment than more established arts (high price difference for similar content) |
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What is the dual market for artists? |
the 'superstar' market and the average-artist market |
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What are credence goods? |
Goods that cannot be assessed in quality until after purchased. |
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What is the regular-artist market competing against? |
- the superstar market - the amateur market - individuals who subsidize other economic activities by offering free content to create a following/market a more lucrative service |
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Why has the supply of free content increased exponentially? |
- content is expensive to produce but inexpensive to reproduce - providing free content as a market strategy: provides specialized content putting other creators at a disadvantage, and renders competition for attention much fiercer |
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What is beaumol's cost disease? |
Certain artistic sectors, by design, have little technological improvement (i.e. performing arts, heritage institutions). Relative price of higher-tech sectors is decreasing over time and labour-intensive/technologically stagnant sectors increases over time. |
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Describe what is meant by the 'attention economy'. |
Simon: wealth of information creates poverty of attention - increase in information creates a need for consumers' attention to be allocated among the abundance of sources available |
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What is Joseph Stiglitz's learning-by-consuming argument? |
- consumers might need prior training/knowledge in order to fully appreciate cultural goods - appreciation for art, literature and opera not spontaneously developed |
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Why is there a blurring of the frontier between leisure and other activities? |
1) work and leisure: abundance of free content suggests that performing 'economic activities' is related to leisure activities 2) consumption and leisure: amateur dancing, going to the theatre, difficult to differentiate between consumption and leisure |
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Why are cultural goods considered 'merit goods'? |
They are intrinsically worthy, have worth beyond market mechanisms. However, their financial model might depend on them delivering audiences to marketers (i.e. in newspapers, magazines, broadcasters) |
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What industries make up copyright-based industries? |
50% cultural industries, 50% software-related industries |
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What are some factors of differential pricing? |
versioning: convenience, resolution, operating speed, flexibility of use, features & function freemiums: leverage the fact that digital goods have very low marginal cost |
