Lecture+15+-+Work+and+Economy - Work and the Economy...

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Lecture 15 Work and the Economy
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The social institution that deals with the production, distribution, and consumption of goods and services in a particular society is an economic system . The Economy as a Social Institution
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Three defining features of capitalism: 1) Private ownership of the means of production (i.e., individual citizens own land, machines, factories) 2) Pursuit of profits 3) Market competition (owners decide what to sell, prices, etc.) Capitalism Pure (laissez-faire) capitalism does not exist anywhere.
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Private property describes all our possessions and the right to shield those possessions from others. The conventional wisdom is that private property gives us a zone of individual freedom where the government cannot intrude. Capitalism Private property refers to all those possessions that are needed for human life and our right to shield those possessions from others.
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All property rights are in fact delegations of power from the state. The state defines the rules for the purchase and inheritance of property and enforces the rights of owners to exclude non-owners from their property. Capitalism “Property and law are born and must die together. Before the laws there was no property; take away the laws, all property ceases.” Jeremy Bentham
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The United States practices welfare capitalism : private citizens own the means of production and pursue profits, but within a system of laws designed to protect the welfare of the population and to collect taxes. Capitalism
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Compliance with the Pure Food and Drug Act Manufacturing must meet hygiene, worker safety, hazardous waste regulations Must pay Social Security taxes and at least minimum wage Cannot discriminate Must pay taxes Welfare Capitalism - Example Cure for balding?
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Three defining features of socialism: 1) Government ownership of the means of production 2) Central planning 3) Distribution of goods without a profit motive (goal is to produce and distribute goods according to people’s needs, not their ability to pay) Socialism
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There are no purely socialist economies. While socialist countries emphasize equality, the reality is that some people must be paid higher salaries in order to get them to take on greater responsibilities. Socialism and communism are not the same thing. Communism is a hypothetical economic and political system in which all members of a society are socially equal. Socialism
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1) Capitalism produces a tiny group of wealthy owners who thrive at the expense of the rest of the working population. 2) Wealthy owners exert undue political power and influence. Capitalism’s Critics
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1) Socialism does not respect individual rights. The government controls most aspects of people’s lives.
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