Animal Spirits – How Human Psychology Drives the Economy, And Why It Matters for Global Capitalism
‘Animal Spirits’ is a term used by John Maynard Keynes in his renowned ‘General Theory’ to describe the psychological factor that drives consumer confidence in the economy. During the financial crisis of 2009, Akerlof and Shiller took it upon themselves to expand further on the term, devising five key ideas in which they associate with the phrase in Part I of the text. These key ideas are confidence, fairness, corruption, money illusion and stories. The authors believe that animals spirits are present in the everyday economy and they must be taken into account otherwise economic policies may not be particularly useful. In Part II of the book,
The authors give another history lesson with this one addressing two significant depressions in US history, the depression of the 1890s and The Great Depression. They link the characteristics of these depressions with the five ideas included in their theory of Animal Spirits giving us further justification on why these spirits should not be ignored.
The seventh chapter asks, ‘Why Do Central Bankers Have Power over the Economy?’. In this chapter, the authors evaluate the power of central banks during normal and tough times and question whether central banks ‘have the power to control something as huge as the macroeonomy’ (p.74).
‘Why Are There People Who Cannot Find a Job?’ is the question Akerlof and Shiller wish to tackle in chapter eight. In this chapter, they focus on the idea of fairness in their theory of Animal Spirits then conclude that low wages which workers consider unfair will reduce their productivity.
In chapter nine ‘Why is there an employment/inflation trade-off?’ the authors critique the natural rate theory. They agree with the fact that wage setting is influenced by expectations of inflation but disagree that inflationary expectation affects ‘wage and price setting one for one’
This chapter focusses mostly on the injustice against black people and commences with an insert from Martin Luther King Jr.’s famous ‘I have a Dream’ speech. The chapter describes an America that has a lot ‘unfinished business’ and due to this unfinished business not being remedied, black people continue to be among the most impoverished races within the United States. This chapter makes for a very interesting read as authors sum up the issues within the US while they include their theory of fairness and stories to explain why special poverty among minorities
Ta-Nehisi Coates, author of the article “The Case for Reparations” presents a powerful argument for reparations to black African American for a long time of horrendous injustice as slavery plus discrimination, violence, hosing policies, family incomes, hard work, education, and more took a place in black African American’s lives. He argues that paying such a right arrears is not only a matter of justice; however, it is important for American people to express how they treated black African Americans.
William Julius Wilson creates a thrilling new systematic framework to three politically tense social problems: “the plight of low-skilled black males, the persistence of the inner-city ghetto, and the fragmentation of the African American family” (Wilson, 36). Though the conversation of racial inequality is classically divided. Wilson challenges the relationship between institutional and cultural factors as reasons of the racial forces, which are inseparably linked, but public policy can only change the racial status quo by reforming the institutions that support it.
While the formal abolition of slavery, on the 6th of December 1865 freed black Americans from their slave labour, they were still unequal to and discriminated by white Americans for the next century. This ‘freedom’, meant that black Americans ‘felt like a bird out of a cage’ , but this freedom from slavery did not equate to their complete liberty, rather they were kept in destitute through their economic, social, and political state.
Employment is hard to find and hard to keep and a job isn’t always what one hoped for. Sometimes jobs do not sufficiently support our lifestyles, and all too frequently we’re convinced that our boss’s real job is to make us miserable. However, every now and then there are reprieves such as company holiday parties or bonuses, raises, promotions and even a half hour or hour to eat lunch that allows escape from monotonous workloads. Aside from our complaints, employment today for majority of American’s isn’t totally dreadful, and there always lies opportunity for promotion. American’s did not always experience this reality in their work places though, and not long past are days of abysmal and disgusting work conditions. In 1906 Upton Sinclair’s “The Jungle” was published. His novel drastically transformed the way Americans felt about the unmitigated power corporations wielded in the ‘free’ market economy that was heavily propagandized at the turn of the century. Corporations do not have the same unscrupulous practices today because of actions taken by former President Theodore Roosevelt who felt deeply impacted by Sinclair’s famous novel. Back in early 1900’s in the meatpacking plants of Chicago the incarnation of greed ruled over the working man and dictated his role as a simple cog within an enormous insatiable industrial machine. Executives of the 1900’s meatpacking industry in Chicago, IL, conspired to work men to death, obliterate worker’s unions and lie to American citizens about what they were actually consuming in order to simply acquire more money.
Civil rights activist, Martin Luther King, Jr, in his powerful speech, “I have a dream” indicated that even though we own the Emancipation Proclamation, we also had been suffering the discrimination. King’s purpose is to invert the current unfair situation and make the Negros have the same rights as white people. He adopts a poignant tone in order to claim that Negros should have their own rightful place and appeal the Negro people who have the same inequity experiences.
Baumeister, Roy F. "Cultural Animal." Why Does Money Matter? The Psychological Meaning of Money. N.p., 18 June 2008. Web. Mar. 2014. .
Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, we decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the monetary policy of the power that it holds.
The topic of the book is how black America is on the wrong path and how it needs to be fixed. One of the problems that are stated in the book is the cultural of blackness treats victimhood not as a problem to be solved but an identity to be nurtured. Separatism is also a problem that encourages black Americans to see black people as superior, which the rules other Americans are expected to follow are suspended out of a belief that victimhood lets them be exempt from them. The author sought to accomplish getting black America back on track. He suggests that it will require some profound adjustments in black identity.
In Martin Luther King Jr.’s “I Have a Dream” speech, he elaborates on the injustices that were wildly plaguing America in the year 1963. Black people all over the country were being treated unfairly, locked up in prison for false crimes, and refused the great opportunities that white people were so lucky to receive. Before the year 1963, President Abraham Lincoln was the last person to make such an impact in the equal treatment of all people, so for about 100 years, blacks had no one to back them in their fight for equal treatment.
Delivered in August 1963, Martin Luther King’s most famous speech, I have a dream, was extremely influential and powerful, and it became a milestone of racial equality movements. King addressed the central idea--all people are created equal--passionately in the speech (Doc 7). His strong demands of racial equality and social justice became the mantra for African Americans. Moreover, his influential speech is as familiar to subsequent generations as the words in the Declaration of Independence. Not only did his contemporaries admired him, but when people nowadays look back to the history, they also honor and respect what King had done for African Americans. As a result of King and other leaders’ hardworks, President Johnson signed the Civil Rights Act in 1964; King was there to witness the great moment. The two men held each other’s hand, marking a great victory and major improvement in the civil rights movements (Doc 12). It outlawed discriminations based on race, sex, color, religion, or national origin, ending segregation in schools and giving everyone right to vote. The landmark piece not only benefitted people during the era, but has also been making profound impacts on people of subsequent generations. Its far reaching consequences must be considered a beneficial aspect of the years between 1962 and 1973. In addition to black rights, poor and less privileged people in general got the attention from the government and the president. Believing that money could gave poor people chances to get education and become successful, President Johnson was engaged in fighting poverty. He had a great vision for America’s future: a Great Society with education for all and without racial injustice (Doc 10). Admiring FDR’s New Deal programs, Johnson launched a set of domestic programs--job training, government aid--aiming at improving poor people’s
Martin Luther King Jr. made many claims about the American society in his famous "I Have a Dream" speech in 1963 that were all legitimate. Today, we have made many advances toward the racial equality that he sought. As a nation, however, we still have not "opened the door of opportunity to all God's children", as King so eloquently put it. In part, this is due to the fact that although our society has reached a degree of political nondiscrimination, this political nondiscrimination has not led to economic nondiscrimination. What it has led to, though, is affirmative action policy and awareness among the people of this country that justice is a complicated process that has yet to be realized. King made us aware that Blacks weren't receiving equal treatment under our laws, and this awareness led to equal rights policy. These equal rights policies have, in turn, led to affirmative action policies. Affirmative action policies of equal opportunity were necessary because political equality was not resulting in economic equality. Today's citizens are still not satisfied, however. This is because affirmative action policy, to date, has been based on egalitarian policy, which has not resulted in economic security nor a sense of balanced justice. In this paper, I will show how Martin Luther King Jr. initiated a growth process in our country by creating an awareness, and that this awareness is gradually evolving toward a justice that we have yet to realize. I will show that Americans are still in the midst of growing pains, and that equality, opportunity, and justice are complex issues that we are slowly working out over ti...
Racial inequality is a disparity in opportunity and treatment that occurs as a result of someone 's race. Racial inequality has been effecting our country since it was founded. Although our country has been racially injustice toward many different race this research paper, however will be limited to the racial injustice and inequality of African-Americans. Since the start of slavery African Americans have been racially unequal to the majority race. It was not in tile the Civil Rights Act of 1964 when African Americans received racial equality under the law of the United States. Many authors write about racial injustice before the civil rights act and after the civil rights act. In “Sonny’s Blues” James Baldwin tells a fictional
Shermer, Michael. The mind of the market: how biology and psychology shape our economic lives. New York: Henry Holt and Co., 2009. Print.
If financial markets are instable, it will lead to sharp contraction of economic activity. For example, in this most recent financial crisis, a deterioration in financial institutions’ balance sheets, along with asset price decline and interest rate hikes increased market uncertainty thus, worsening what is called ‘adverse selection and moral hazard’. This is a serious dilemma created before business transactions occur which information is misleading and promotes doing business with the ‘most undesirable’ clients by a financial institution. In turn, these ‘most undesirable’ clients later engage in undesirable behavior. All of this leads to a decline in economic activity, more adverse selection and moral hazards, a banking crisis and further declining in economic activity. Ultimately, the banking crisis came and unanticipated price level increases and even further declines in economic activity.
The Kings Speech or more famously known as the “I Have a Dream” speech, goes down in history as one of the greatest expressions of speech not only for the African American community but, for the world at that time. In short terms, in the fight for the disbandment of racial discrimination worldwide, the king’s speech was used to shed a light at the end of a dark, long tunnel throughout American society. Racial discrimination has had a black eye on the forefront of American culture but with Dr. Martin Luther King’s speech, it helped heal the wound of a century of punishment in the African American community.