Day 5

liberalism began as a move away from government intervention in economics
adam smith was a philosopher, wrote his book in 1776, "the wealth of nations", written in the common tongue
advocated a lack of government intervention, instead having the people relying on each other for goods
another aspect of society is the private sector, an exclusive part of society, one person has control and can exclude others
public-governement controls
private-cannot be invaded by the government
the individual is free

adam smith assigned 3 roles to the governemnt
1 - law and order
2 - defense
3 - infrastructure; included education

everything else would be handled by individuals
the government was seen as a monarchy
the liberal system at the start did not work out as intended
belief systems, ideologies, people have ideas that do not necessarily translate to the real world
wealth is true power
why did they not have equal wealth and power?
because of uneven distribution of resources

when it was seen that the liberal system was not working as it should, there was a second revamp of the system, except by those who benefitted, who justified it
the populist movement; people first
progressives; making progress
we were forced by a crisis, the stock market crisis, that brought the great depression (the collapse of an economy)
loss of jobs
unemployment means no buying of things
no companies selling anything
can;t sell things, can;t pay loans back

FDR pledged himself to a new deal
mobilization of government power to revive the economy, stimulate the economy
the first idea of neo liberal
providing for the first tier of maslows hierarchy
social security takes care of those who are handicapped, elderly, can;t work, then provided for those who were out of work
they decided that the government should be brought back into society
most of the people who were in government positions were committed to the people, because they had seen the effects of the crash
it was decided that the government was the only organization that could effectively distribute wealth
after WWII, dollars were seen as as good as gold
what is produced by the dollar's government is the value of it

the government under FDR decided that the problem was getting people back to work; the lynchpin for economics

kayneism has three stages

1. government needed to provide more dollars, through cutting taxes, borrowing (deficit financing) the budgeting proccess in which the government spends more money than it collects in taxes, or the government can print it's own money

2. demand the money will be given to the demand side

3. once the demand side has it, they will go out and buy things, stimulated the production
this leads to jobs
then earnings
and spending, creating a positive feedback loop
saving, creating a need for banks
people trust banks because of the FDIC

kayne suggests that the government become interested in the macroeconomy

fiscal policy - controlling the spending
monetary policy-determining how much money is put into circulation

inflation: general rise in prices

every person in society had to be included for a compassionate society
they introduced social security for the first time
the term was descriptive; they wanted people to feel secure
1946 the full employment act, but it has not been enforced
just having something being a law, or having something in a constitution does not mean it will be enforced

the vietnam war led to an expenditure of weapons, big companies monopolizing
OPEC - the oil price increase
all of these combined made the economy worse
another group rose in the society, that said they knew the source of the problem - the new deal
1975 the end of the vietnam war
but the monopolies still stayed in power
in the 80s, reagan came into office
said the problem can be solved, in three steps

1. the governement reduced taxes and borrowed to increase dollars
2. money went to support businesses, specifically the entrepreneurs (the supply side)
3. now the businesses will increase production
which means more jobs
people pay less taxes, but more people paying taxes

reaganomics did not work very well for the economy
reagan added to the debt pool by 1 trillion dollars
neoconservatism, neoconservatives
what did they want to conserve?
they wanted to preservethe classical idea of liberalism, no government intervention, each individual acquires as much property as he can earn
however, it didn;t work because they were still involved in the economy
just changing the name

clark pepper, affiliated with the AARP, said that reagan would not come back if he destroyed social security, and it worked because the elderly/retired are the voting population
bush admin wanted to privatize social security
social security was established for inter-generational cooperation
17 workers to every retired person, now it's 3 or 4 people to each retired person
people live longer, smaller families
start with the reagan administration
purely by expenditure, it is true that the current administration has run our deficit up
looking at our educational system, it is clear that since the cold war it has been degraded
the educational system has not been improved
trickle-down economics
garfinkle - the american dream vs the gospel of wealth
we have gotten away from the american dream, equality, to the idea of wealth

we could have included other nations in our plan, in our philosophy
the united states forced the europeans to unite through economics
the arrangement could move europe into the united states of europe
this would be better for it

why did we not look at our domestic scene to deepen our unity
why did the monopolists not educate the other economies worldwide to become consumers?
do we need to have a global disaster to create a "new new deal"

the world bank
and the International monetary fund
exploitation of labor instead of education is thinking short term, and the savings are not re-invested in the youth of those nations
humans tend to think short-term

criticism of the new deal was that it was haphazard, not well planned
it was sprung on the people like an accident
the programs were fragmented
afdc
tanp (temporary aid to needy persons)

social security was a form of connection, making both people

adam smith used the term "the invisible hand of the market"
if you leave the economy alone, and individuals pursue their own destiny, who will take care of the collective?

socialism
traditional or early socialism, implies cooperation between the private sector and the public for changes brought about through education and on a gradual basis. The public would control most of the important areas of the economy for the benefit of all
the kayenism form of socialism called it mixed economics, to differentiate itself from soviet socialism
marxist socialism is the period of revolution by the proletariat (workers). marx beleived that society is seperated into two classes: the bourgeoisie and he prolitareit. the revolution in which the workers would take over, and dismantle the exploitative institutions of the capitalist society that rob the people of their hard-earned goods and re-educate and re-socialize the people, in preparation for the last stage, a communist society
communist society: a state in which the states and the classist system would wither away
marx's belief was that society goes through these stages of belief
1. primitive communism (communalism)
2. slavery
3. feudalism
4. capitalism (state of the bourgeoisie)
5. socialism (revolution)
6. communism (where you need no force for people to be decent) (from each according to his or her ability, to each according to needs)

marx's ideas of communism weren't as liberal as plato's
all societies have stopped at socialism
from suffering you understand what needs to be done
the workers should theoretically not impose unfavorable things on others
we have not been able to transcend human greed