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
CAPITALISM  SELF-INTEREST PRIVATE PROPERTY FREEDOM OF CHOICE COMPETITIVE MARKETS NO GOVERNMENT INTERVENTION
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			NO PROBLEM: FREE MARKETS ARE COMPLETELY SELF-CORRECTING
SOLUTION: COMPLETE PUBLIC OWNERSHIP OF THE MEANS OF PRODUCTION SOCIALISM (which eventually leads to COMMUNISM)	MOST MODERN ECONOMISTS AGREE THE GOVERNMENT SHOULD BE RESPONSIBLE FOR: PROVIDING A LEGAL FRAMEWORK MAINTAINING COMPETITION CORRECTING FOR EXTERNALITIES REDISTRIBUTING INCOME PROVIDING PUBLIC GOODS
	SOLUTION: DIRECT GOVERNMENT INTERVENTION GOVERNMENT AS REFEREE	FLAWS OF SOCIALISM: RATIONAL IGNORANCE SPECIAL INTERESTS SHORT-TERM THINKING BUREAUCRATIC CAPTURE DEADWEIGHT LOSS
		SOLUTION: INDIRECT GOVERNMENT INTERVENTION GOVERNMENT AS REPAIRMAN

EXAMPLE: CIGARETTES EXTERNAL COST Lung Cancer, Second-hand Smoke PUBLIC GOOD: Better Health for Everyone ASYMMETRIC INFORMATION: Ammonia Added to Nicotine to Create Greater Addictive Properties MONOPOLY POWER: Two Tobacco Companies Control 80% of the Market
SOLUTION
GOVERNMENT SHUTS DOWN TOBACCO FARMS AND CIGARETTE FACTORIES	GOVERNMENT TAXES CIGARETTES, AND BANS SMOKING FOR EVERYONE UNDER 18	GOVERNMENT PUTS WARNING LABELS ON CIGARETTES; LAWYERS CAN SUE TOBACCO COMPANIES	LET EVERY INDIVIDUAL DECIDE FOR HIMSELF