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28 Cards in this Set
- Front
- Back
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What were the two broad problems that absorbed AS in Wealth of nations?
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1. self interest provides the framework for competition and will answer the three basic economic questions. it is the "invisible" hand that promotes self harmony
2. "whither society" to where society is going and what is the long term objective |
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Name a paradox in Wonderful World of AS
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1. selfishness leads to prosperity
2. market should represent freedom, but it is also the biggest regulator |
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Does Heilbroner really think the world works like AS described?
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Essentially yes, with some reservations. At AS time it did work like he said. lots of small factories and competition. Now, large corps that go around law, govt intervenes, large unions. but still generally applies
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What does AS see as the result of a capitalist/industrial system?
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propelled to positive goal. increase in prosperity for all.
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What does AS see as the result of self interest?
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SI is the framework of competition. it encourages specialization/division of labor and high prosperity
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What does competition regulate?
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income/wages
quantity what to prices |
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What does AS say should be done with savings?
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Savings should be reinvested into society and not wasted on charities or excessive buying of luxuries
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What will balance the law of accumulation?
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law of population. higher wages leads to more workers leads to lower wages
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Why would historian, Rothschild, find it ‘thrilling’ that Washington too read Smith? Any evidence the thinker had an impact?
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Washington was concered with equity and the overall ideas of AS. In his farewell address he references an equal and impartial hand.
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How has Smith been re-invented according to Rothschild?
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Smith has been reinvented as unyielding advocate of the free enterprise.
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What kind of views would the unreconstructed Smith have that might be contentious with those who hold fast to his re-invented and packaged views?
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AS championed the disadvantaged and viewed freedom in a broad sense. Smith in favor of government intervention when its goal is to reduce poverty. Also in favor of regulation when it supports the workman. In favor of helping poor.
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What was Rothschild’s ‘most controversial point’ in her book, ‘Economic Sentiments’?
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that smith was skeptical of the "invisible hand". she suggests he may have used it as an ironic joke
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What impact does Muller say the irony of Smith’s invisible hand have on its readers?
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it becomes blinding. moralists don't like that their intentions aren't to help others, but the outcome does.
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What reservations does Smith have about the role of self-interest in economic matters? EX
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he says it actually plays a pernicious role. self interest in government and high levels of society hinder competition and overall market flow . EX -- merchants can divide up market, unions circumvent labor/wages
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What is the role of the legislator? in MULLER
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to regulate self-interest. to stay out of way of free market
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Give two examples Smith uses to describe the pre-capitalistic world.
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France - traders in tents, no accounting, no uniform currency
Boston - church condemned greed, said should be no profit -said basic principles of economics were false |
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What does Smith deduce from his historic examples.
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economic world is connected to social behaviors (ie church). there is not a secularized economy
-no profit motive |
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What does AS say about greed in the past?
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It was always present, but in the past it was suppressed through social norms. now greed is good, greed is encouraged
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what factors led the economic revolution?
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-growth of national spirit
-increase in wealth -curiosity for science and tech |
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pre capitalistic economies were resistant to change. certain nations even suppressed innovation.
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..
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Define liberal in US/Euro terms.
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US: big gov't, high spending, high taxes
Euro: no hands on at all. kinda considered anarchists |
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What was AS's point as it related to LLK
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LLK were not viewed abstractly/as commodities. they had not yet been commercialized
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How do both regions view the term similarly?
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individual rights
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pre capitalistic economies were resistant to change. certain nations even suppressed innovation.
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..
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How does the ‘Economist’ prefer to define the term ‘liberal’? What do they view skeptically?
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as the old definition of individual rights, no arbitrary rule
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How do both regions view the term similarly?
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individual rights
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What was the 18th century definition of liberal?
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individual rights and freedoms and challengers over mighty government
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How has modern politics split the term ‘liberal’?
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democrats kept: social/civic ideas (SS marriage, pro choice)
did not keep: economics (progressive taxes, welfare) repubs kept: econ (low taxes, privatization, private welfare) did not keep: social/civic (pro life) |
