Chapter 1:
The world is made up all types of economic systems that undergo billions of transactions every day, the vast majority without any government involvement. Too much government interaction can lead to the failure that occurs in the Soviet Union. For example, a soviet official visited an American pharmacy and recognized how everything worked in harmony. He asked how this is possible and the answer was simple economics. A store sells products and the companies produce items that stores want to stock. But why is it that we have rich people with private jets and in the same place homeless people? In the market economy, most markets are self-correcting and produce competition. Fixed-price market systems, such as communism/socialism, there is no competition in prices but in quality. A gas station in South Africa might have concierges who clean your car and wear bowties. Firms, consumers, workers all work in their best interest. The real question is how it all works. Economics starts with the fact that individuals act to make themselves as well of as possible. This is not actin selfishly but maximizing utility. Life is about tradeoffs/opportunity costs and so is economics.
Chapter 2:
People commit to crimes because they have a larger gain if they succeed than if they fail. The results outweigh one over the other. People believe that there are more benefits if they succeed than the failures of the same task. They don’t care about the risk of getting caught when the opportunity of getting money is possible. It is also easy to be a “free rider” and let someone else do the work and contribute. Just like this theory says, many tourists and safari operators do exactly what this specifies. One company who invests in conservatism c...
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...to go anyway. They have no incentive with a monopoly. Government shouldn’t be the sole provider of goods or services unless they have legitimate reason to believe that the private sector would fail. Even if government has the role, they don’t have to be the ones who enforce it. They could hire a private company to pour the cement for a road. The private sector allocates resources to where they need it the most and government allocates to where the political process sends it to. But by global standards, the United States has a relatively lightly regulated economy. Taxes can disrupt productivity and many chose not to pay them causing a ripple effect on the economy. Taxes can disrupt investments because people would have to pay for them. The government controls the economy through these measures and the better the government handles the economy, the better we will be.
For this reason, conflicts are bound to arise because not everyone is getting what they want. This unsettlement and resentment will eventually lead to the inevitable economic disorder we see today as described by Karl Marx over 100 years ago. The capitalist Society initially promised that everyone will benefit, that we will all become wealthy as long as we put in the hard work. It is through our hard work and dedication where success will come. We’ve evolved away from the old feudal ways where you were just born into you economic background and you would remain there until you next life. This old idea of feudalism was abolished because we realize that we are all created equal, what makes you royal is your flesh and blood is the same as I. Feudalism also did not promote any incentive to work hard because you only produced enough for your king and for yourself. Eventually people had their wants and Hennce the inevitable birth of Modern day Capitalism. Through first forms of trading in the medieval time with other kingdoms, we saw early forms of specialism. Like how modern day countries have their very own specialized good, Saudi Arabia with their oil for example, we can use these goods to trade for goods or services. What is creates is efficiency. Though Capitalism is truly a powerful and very efficient in society as we’ve produced more than we ever did, there are certain flaws that are bound arise as
While it is great that citizens live under similar economic terms and are assured of the same paycheck every week, communism is not an environment that will allow businesses or people to flourish. On the opposite side of a Capitalist society, where businesses are able to skyrocket earnings, a Communist society affects businesses ability to grow. If each worker is given the same amount of money, this can affect their motivation to do things and go above and beyond. Everyone who earns the same amount of money for the same amount of work seems like a peaceful agreement and a proletariat paradise, but it does not always turn out that way. Unfortunately, communism can often lead to widespread corruption and sometimes encourages greed.
Economic systems are affected by the two opposing systems of Capitalism and Communism. They each can meet the needs of people; however, both affect the lives of people in good and bad ways, affecting industrialized nations and nations in the process of being industrialized.
...ommit crimes every day just for the sake of committing a crime; in other words, they have periods of no criminal behavior. So, their rational choice is to turn to burglary only when they are desperate for money. In essence, they have chosen burglary as their line of work.
Rational choice theory is the basis of almost all decisions one makes in their life. Starting at a young age kids make choices based off of self-interest, whether it be taking a toy another kid is playing with or asking the other parent for something when the first already said no hoping for an answer they want. Rational choice theory is based on intentional, goal oriented behavior (“Rational Choice Theory” 74). Before making decisions, people consciously and unconsciously weigh the pros and cons of each choice usually opting for the choice that benefits them the most or has the most desired predicted outcome. So why do people commit crimes even though they know they could get into a lot of trouble could go to jail? People enter an interaction
...ulture and beliefs. Another reason one might commit a crime, is when people fail to achieve society’s expectations through legal means such as hard work and delayed gratification, they may attempt to achieve success through crime. People also develop motivation and the skills to commit crime through the people they associate with. Some criminals commit crimes because of the controls that society places on a person through institutions such as schools, workplaces, churches, and families. Sometimes there are occasions where a persons actions goes against what society considers normal, and as a result it is instead considered a crime. Also some criminals continue their criminal acts because they have been shunned by their society because once a person is labeled a criminal, society takes away their opportunities, which in most cases leads to more criminal behavior.
Lack of market discipline. Governments have chosen to keep certain companies/industries under public ownership because of their strategic importance or sensitive nature.
All nations can get the benefits of free trade by being specialized in producing goods they have a comparative advantage and then trade them with goods produced by other nations in the world. This is evidenced by comparative advantage theory. Trade depends on many factors, country's history, institution, size and. geographical position and many more. Also, the countries put trade barriers for the exchange of their goods and services with other nations in order to protect their own company from foreign competition, or to protect consumers from undesirable products, or sometimes it may be inadvertent.
When we think of crimes we always wonder why people do them in the first place. Usually when a person commits a crime we automatically assume that he or she is a bad person. But we don 't know the circumstances on how that person end up stealing, killing, raping, and etc in the first place. My perspective is that people commit crimes for many reasons, especially seeing it throughout the neighborhood I grew up in and the school I went to in California. But after taking the Crime in America class, it gave me it a better insight of why people commit crimes through the theories that other people research about, and the video examples we seen in class. One of the theories that seem plausible on why people commit crimes is the life course
If one looks at liberty and individual freedom, it is evident that command economies tend to oppress their citizens. Therefore, socialism, which allows for basic needs to be met and personal freedoms to be upheld, is the best economic system for all of a country’s citizens. Market economies, as a whole, inherently and inevitably lead to poverty and a large class disparity. In a capitalist society, the ones who supply labor, the ones who work the hardest, are the ones who are paid the least. The owners, who are already rich, receive most of the profit and accumulate large masses of wealth.
The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.
Capitalism is the best economic system for many reasons. The first one is because the government believes in “ Laissez Faire”, which means “Hands off”. The government has no role
One of the first and major differences between a Communist and Democratic government is their contrary economic systems. In a communist government, the community owns the major resources and means of production. The goal of such a system is to prevent any one person or group of people from becoming radically rich, while others are extremely poor. The system attempts to eliminate lower class by balancing the wealth between rich and poor, therefore giving everyone equal pay and ownership. Unfortunately, this results in an increased lower class. However, in a Democracy, free enterprising is permitted, and smiled upon. ? Here, free enterprising helps the economy to flourish. People can organize their own businesses and receive their own profits if it succeeds, or debts if it fails. In this system, the harder a person works, the more money they receive, allowing them to ‘make ends meet.’ The downside to democracy is that people can get a high paying job through education, but may work just as hard at a lower paying job and receive less money. As Winston Churchill once said, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." Generally, Democracy’s seem be more successful economically.
Several decades ago I used to enjoy an occasional lunch in with the late Professor G. Warren Nutter, a distinguished economist who taught at the University of Virginia. Professor Nutter had considerable expertise in comparative economic systems, particularly that of the former Soviet Union. While he had a deep understanding of economic theory, he always stressed that markets do not operate within a vacuum and we gain a greater understanding of human behavior if we paid attention to the role of institutions and other non-market forces.
Supply and demand play a key role in all of this, no matter which institution governs what. The demand always comes from the society itself. Without the need or want for certain things these institutions would have little to no effect on individuals in society today. “Society needs to make decisions about what should be produced, how certain goods and services should be produced and who is allowed to purchase these goods and services” (Supply and Demand: The Market Mechanism, 2000) For finances the marketplace, by way of supply and demand, has solutions to these problems. If individuals were to make these choices, these institutions wouldn’t be needed to determine what is regulated to the society. These markets consist of just about everything in everyone's day to day lives without them really even knowing it and is controlled by these institutions rather than that of the people of the free society we live in today. For example, they dec...