Honors Economics
Mr. Crawford
REVIEW
MARKET FAILURE AND GOVERNMENT
|
Structure:
|
Content:
|
 |
 |
 |
 |
| KARL MARX | JOHN KENNETH GALBRAITH | MILTON FRIEDMAN | ADAM SMITH |
| DAS KAPITAL, 1867 | THE AFFLUENT SOCIETY, 1958 | FREE TO CHOOSE, 1980 | THE WEALTH OF NATIONS, 1776 |
| SOCIALISTS | LIBERALS | CONSERVATIVES | CAPITALISTS |
| WEALTH = UTILITY LABOR CREATES VALUE PROFIT IS SURPLUS LABOR |
WEALTH = GOODS INVESTMENT CREATES VALUE PROFIT IS RETURN FOR RISK |
||
| FLAWS OF
CAPITALISM: EXTERNALITIES MONOPOLIES INEQUITY PUBLIC GOODS BUSINESS CYCLES ASYMMETRIC INFORMATION |
MOST
MODERN ECONOMISTS AGREE THE GOVERNMENT SHOULD BE RESPONSIBLE FOR: PROVIDING A LEGAL FRAMEWORK MAINTAINING COMPETITION REDISTRIBUTING INCOME PROVIDING PUBLIC GOODS CORRECTING FOR EXTERNALITIES  |
CAPITALISM SELF-INTEREST PRIVATE PROPERTY FREEDOM OF CHOICE COMPETITIVE MARKETS NO GOVERNMENT INTERVENTION |
|
| SOLUTION: COMPLETE PUBLIC OWNERSHIP OF THE MEANS OF PRODUCTION  SOCIALISM (which eventually leads to COMMUNISM) |
SOLUTION: DIRECT GOVERNMENT INTERVENTION  GOVERNMENT AS REFEREE |
FLAWS OF
SOCIALISM: RATIONAL IGNORANCE SPECIAL INTERESTS SHORT-TERM THINKING BUREAUCRATIC CAPTURE DEADWEIGHT LOSS |
NO PROBLEM: FREE MARKETS ARE COMPLETELY SELF-CORRECTING  |
| SOLUTION: INDIRECT GOVERNMENT INTERVENTION  GOVERNMENT AS REPAIRMAN |
|||
|
Karl marx |
John kenneth galbraith liberal protective function distributive function corrective function productive function PROGRESSIVE TAX REGRESSIVE TAX PROPORTIONAL TAX FLAT TAX |
MILTON FRIEDMAN PUBLIC CHOICE theory CONSERVATIVE RATIONAL IGNORANCE SHORTSIGHTEDNESS DEADWEIGHT LOSS SPECIAL INTEREST EFFECT LOBBYING RENT-SEEKING LOG ROLLING PORK BARREL CROWDING OUT BUREAUCRATIC CAPTURE |