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Social Economics

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  1. Social Economics By, Andrew Hull, Laura Boyle, Rebecca Glass, and Daniel West

  2. What is Socialism? • Ownership of companies by the people • Production by quantity needed for consumption, not by the most profitable amount • All officials are elected to their position by the people that they serve over

  3. Why Does Socialism Seema Preferable Option? • Socialism allows people to spend other people’s money. • People are made to be equal, eliminating envy. • Frees people from worrying about their own economic standing.

  4. John Stuart Mill1806 - 1873

  5. Life History • Eldest son of economist James Mill • Raised by his father to rigid academic standards • Suffered from depression in late teens • Worked for East India Company most of his life

  6. Publications • Principles of Political Economy • The Subjection of Women • On Liberty

  7. Economies of Scale • During the initial stages of operation, a firm will experience diminishing costs as production increases

  8. Opportunity Cost • The most valuable alternative given up in a situation • Ex: The opportunity cost of buying a car is the down payment you could have put on a house

  9. Comparative Advantage • One country is more efficient at producing a good or service than another • These countries should trade with each other to get the best possible prices

  10. Modern Relevancy • Economies of scale, opportunity cost, and comparative advantage are accepted as building blocks of economic theory • These theories are still very relevant today

  11. Karl Marx 1818 - 1883

  12. Early Life • Born May 5, 1818 in Trier, Prussia Studied philosophy at Bonn University and University of Berlin • Received Doctorate degree at Jena • Died in London on March 14, 1883 at 64

  13. Radicalism • Member of Young Hegelians • Wrote for many radical newspapers and magazines which were suppressed for their radical views • Exiled from many countries and towns • Met Friedrich Engels in 1843 in Paris who became his life time friend and partner

  14. Radicalism (cont.) • Founded the German Workers’ Party • Active in Communist League • Helped to found the International Workingmen’s Association (First International) in London

  15. Published Works • The Holy Family (1845) • Misere de la philisophie (The Poverty of Philosophy) (1847) • The Eighteenth Brumarie of Louis Bonaparte (1847) • Critique of Political Economy (1859) • Das Kapital (1867,1885, 1894) • Communist Manifesto (1848)

  16. EconomicTheories • Economic system at any given time determines the prevailing ideas • History is an ongoing process regulated—predetermined—by the economic institutions which evolve in regular stages • Institutions shape ideas (materialistic interpretation of history)

  17. Economic Theories (cont.) • Capitalism=bad;Communism=GD! • Wanted classless society (no classes, exploitation, or inequalities) • History=struggle between owners of capital (capitalists) an workers (proletariats) • As wealth is concentrated more in the hands of a few capitalists, the proletariats will revolt (Commie revolution!)

  18. Economic Theories (cont.) • Capitalism contains the seeds of its own destruction • Key components of Marx’s economic thought: • labor theory of value • decreasing rates of profit • increasing concentration of wealth

  19. Economic Theories (cont.) • Workers in a capitalistic economic system become trapped in a vicious circle: the harder they work, the more resources in the natural world are appropriated for production, which leaves fewer resources for the workers to live on, so that they have to pay for their own livelihood out of their wages, to earn which they must work even harder. When the very means of subsistence are commodities along with labor, there is no escape for the "wage slave."

  20. Personal Reflection • I DISAGREE with his views • Communism works and is very appealing in theory in reality, it DOESN’T work • There have been NO true “by the books” Communistic societies

  21. Thorstein Veblen 1806 - 1873

  22. Life • Grew up in Norwegian Immigrant community; did not speak English until late teens • Studied economics under John Bates Clark, a leading neoclassical economist, but rejected his ideas

  23. Economic Theories • Best known for the term “conspicuous consumption “ • Veblen thought economists’ questions were too narrow

  24. Economic Theories • Wanted economists to understand the social and cultural causes and effects of economic changes • Unsuccessful at getting economists to focus in this area

  25. Publications • The Theory of the Leisure Class 1899 • The Theory of Business Enterprise. 1904 • Journal of Political Economy (managing editor)

  26. Agree/Disagree with Views • Agree; economics is relative to society and culture; one must understand societal and cultural changes to understand economic changes

  27. Criticism • Veblen’s ideas were largely ignored by the economic community; he died in obscurity and had lived off his family and his wife’s family for most of his life

  28. Theory Still Relevant? • Veblen’s ideas are still relevant, as economics is still dependent on the shifts of society. • Conspicuous consumption still relevant, as people still flaunt their accomplishments