Lecture-6-Economy - Economic Institutions and Inequality...

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Unformatted text preview: Economic Institutions and Inequality Lecture 6 Outline Economic Institutions? Economic Systems Capitalism Welfarism Socialism Globalization of Economy Socioeconomic Consequences of Capitalism Michigan Revenue Highest Paid CEOs Richest of the World What Are Economic Institutions? Social organization of production, distribution, and consumption of goods and services in a society. Production of goods – relationships with consumers Distribution Consumption- Capitalism Welfarism- western socialism Socialism - Responsible as state for food money healthcare ect… - No social stratification - State is responsible for basic needs Economic Systems the - Based - of on capitalism Gov. owns means of - Rich people own production - Production for use, means of production World - Production is for profit not profit - Individuals own means of production - Production for profit - Social stratification - individuals are responsible for basic needs Capitalism- individuals own means of production Welfarism Socialism Means of production are owned by the state Production for use, not profit Sweden, No social Norway, stratification Denmark, Finland State is responsible Free health care for basic needs Education is free Globalization of Economy Globalization refers to economic and political interdependence of nations around the globe Globalization of production International Trade International Finance (World Bank, IMF, World Trade Organization, NAFTA) Consequences of Globalization Socioeconomic Consequences of Capitalism Environment degradation – replacing nature with infrastructures Economic insecurity – hired or fired Social inequality – how much inequality we have because of capitalism Ascribed Economic Inequality Inheritance of property Inheritance of occupations Politics of Inequality – with money you can buy anything Education and Economic Inequality Legal systems and Economic Inequality- no such thing as justice, based on economic class, race, age, religion, ect… Socioeconomic Consequences of Capitalism Continued… Advertising and Consumerism Create perceived desire or needs for products that are not necessary Planned artificial obsolescence Influence on the contents of mass media Over-emphasis on consumer goods and services (leading to alienation?) Strengths of Capitalism Social Darwinism – Competition leading to excellence Creativity, Innovations, and Inventions Motivation to succeed Trickle down effect – in a capitalist society you strengthen the rich they will invest the money and create jobs No longer open up jobs for our people they open plants in Mexico or China Michigan Revenue (2015) Federal Government $18.3 Billion Sales Tax Individual Income State Education Tax Transport Tax Tobacco Business Tax Other Taxes $8.7 $8.9 $1.8 $1.9 $1.0 $.76 $5.6 Billion Billion Billion Billion Billion Billion Billion State of Michigan, 2015 Highest Paid CEOs David Zaslav (Discovery) $156 Million Michael Fries (Liberty) $111 Million Mario Gabelli (GAMCO) $88 Million Satya Nadella (Microsoft) $84 Million Nick Woodman (GoPro) $77 Million Greg Maffei (Liberty Media) $74 Million Larry Ellison (Oracle) $67 Million Steve Mollenkopf (Qualcom) $61 Million David Hamaoto (Northstar) $60 Million Les Moonves (CBS) $54 Million Money Morning 2015 Richest of the World (2008) Warren Buffett Carlos Slim Helu Bill Gates III Lakshmi Mittal Mukesh Abani Anil Ambani Ingar Kamprad KP Singh Oleg Deripaska Karl Albrecht United States Mexico United States India India India Sweden India Russia Germany $62 $60 $58 $45 $43 $42 $31 $30 $28 $27 Billion Billion Billion Billion Billion Billion Billion Billion Billion Billion Richest of the World (Forbes 2011) Carlos Slim Helu William Gates Warren Buffet Bernard Arnault Larry Ellison Lakshmi Mittal Amanico Ortega Eika Batista Mukesh Ambani Christy Walton Mexico United States United States Germany USA India Spain Brazil India USA $74 Billion $56 Billion $50 Billion $41 Billion $39.5 Billion $31.1 Billion $31 Billion $30 Billion $27 Billion $26.5 Billion Richest of the World (Forbes 2015) Bill Gates Carlos Slim Helu Warren Buffet Amancio Ortega Larry Ellison Charles Koch David Koch Christy Walton Jim Walton Liliane Bettencour USA Mesico USA Spain USA USA USA USA USA $79 $77 $73 $72 $54 $43 $43 $42 $41 Billion Billion Billion Billion Billion Billion Billion Billion Billion USA $40 Billion Richest of the World (Forbes 2016) Bill Gates Amancio Ortega Warren Buffet Carlos Slim Heu Jeff Bezos Mark Zuckerberg Larry Ellison Michael Bloomberg Charles Koch David Koch USA Spain USA Mexico USA $75 $67 $61 $50 $45 Billion Billion Billion Billion Billion USA $45 Billion USA $44 Billion USA $40 Billion USA USA $40 Billion $40 Billion ...
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