Midterm 2 Study Guide .docx

Midterm 2 Study Guide .docx - The Commodity Chain 1...

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The Commodity Chain: 1) Extraction of raw materials, 2) Manufacture it (production), 3) Distribution (who & how), 4) Consumption (people consume the products); planned & perceived obsolescence: companies purposely create products to make yours feel old, 5) Disposal; (99% of goods are in the trash in 6 months). The Golden Arrow= Consumption The Story of Stuff Capitalism : an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. Capitalism is not the best option for every country (ex. Malawi & WB) Adam Smith: Laissez Faire, ‘ No Tariffs’. Frederic List: free trade is bad & only benefits those already in power. Basic Standards that identify capitalism from any other system Protectionists Policies: Restriction of imports from other countries so local industries can grow; job/ economic growth. This goes against free trade and liberalism. Production subsidy: increase output and keep prices down. Supplier doesn’t transfer cost to buyer. and Consumption side subsidy : provided to consumers to change their lives. PG&E offering a reduced rate. Offered more in developing countries. Agricultural subsidies : (US) corn and soy. Farms get 15 mil. for AG. Europe: 47 Bil. Problem : it is based on input/ output and it favors larger industrial ag businesses. Overproduction: very little top soil, high yield monocultures, lose all ag if attacked by pests, reduces crop rotation, erosion and salinity, pesticides/ fertilizers get into water systems. The Great Depression : 1930s people stopped purchasing, started buying goods on credit, stock plummets, 25% unemployment rate.
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