Professional Documents
Culture Documents
Presented by: Elyssa I. Del Campo Krizzia Mae D. Navarro Jerica Mae J. Lim Katherine M. Nadongga Kim Villaflor
Introduction
Industry Policy Should govnt regulate and coordinate the activities of business firms? Or; Should business firms be left to pursue their own interests within unregulated markets? Should the business system be a planned economy or shoult it be a free market economy?
Ideology
It is a system of normative beliefs shared by members of some social group. It expresses the groups answers to questions: about human nature, about the basic purpose of our social institutions, about how society actually function and about the values society should try to protect.
Business Ideology
Is a normative system of beliefs on these matters, but specifically one that is held by business groups such as managers.
The role of government is limited. Purpose: to protect property, enforce contracts, and keep the marketplace open so that competition among firms may be vigorous and as free as possible.
The role of government is prestigious and authoritative, sometime authoritarian. Purpose: to define the needs of the community over the long as well as the short, and o see that those needs are met.
Two main ways to solve a fundamental economic problem that all societies face:
1.) Command System 2.) Market system
Command system
a single authority makes the decisions about what is to be produced, who will produce it , and who will get it.
The two main arguments that are usually advanced in favor of the free market system are:
FREE MARKETS AND RIGHTS: JOHN LOCKE THE UTILTY OF FREE MARKETS: ADAM SMITH
Keynesian Criticism:
Keynes argued that without government intervention, the demand for goods may not be high enough to absorb the supply and the result will be rising unemployment and a slide into economic depression.
Government can influence the propensity to save through its influence on the interest rates.
Keynesian Criticism:
Government spending can also close the gap between aggregate demand and aggregate supply by taking up the slack in demand from households and businesses. Keynes arguments became less convincing though, after stagflation of 1970s. It has been replaced by a post-Keynesian school of thought, which argues for even more governmental intervention in the market.
Marxist Criticisms
is the most influential critic of the inequalities that private property institutions, free markets and free trade are accused of creating. According to Marx, capitalist systems offer only two sources of income: sale of ones own labor, and ownership of the means of production. The workers are forced to sell their labor to the owner for a wage.
Marxist Criticisms
Those who own the means of production (bourgeois) become wealthier and workers (proletariat) become relatively poorer. In Marxs view capitalism alienates the lower working classes by not allowing them to develop their productive potential, nor real human needs.
Is a society consist of the material and social controls that society uses to produce its economic goods
Those in power promote the ideologies that justify their position of privilege. This view of history is called Historical Materialism.
Immiseration of workers
The result of unrestrained free markets and private ownership will be a series of disasters for working people, leaving them immiserated.
Immiseration of workers
3 general tendencies will bring this about: A.) Increasing concentration of industrial power. B.)Repeated cycles of economic downturns. C.)The position of the worker in capitalist societies will gradually worsen.
Immiseration of workers
Though many of Marxs predictions have turned out to be correct, immiseration of workers has not occurred. Still many claim that unemployment, inflation, alienation and false desires do characterize much of modern capitalist society. Defenders of free markets claim that justice really means distribution according to contribution.
Immiseration of workers
Even if private ownership creates inequalities, defenders of free markets still maintain that the benefits of the system are greater and more important than the incidental inequalities. Whether the free market argument is persuasive depends ultimately on the importance one gives to the rights to liberty and property, as opposed to a just distribution of income and wealth.
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