Unformatted text preview: Economics Economics & International Studies Definition Definition Roots = oikos & nomos Roots oikos Basic social unit Way of behaving Study of production, distribution, & consumption Study of alternative uses of scarce resources Study of human behaviors in the above activities Study Liberal Theory Liberal Adam Smith – Wealth of Nations (1776) Adam (1776) Economic relations organized by market and price mechanisms Maximize economic efficiency Create economic growth (though distribution may be unequal) Promotes individual welfare Markets Arise spontaneously Are self-regulating through natural laws Actors in Markets Make rational choices based on self-interest Use cost/benefit analysis to make these decisions Policies: free trade Lower tariff and non-tariff barriers Minimize government interference in the market Nationalist/Mercantilist Theory Nationalist/Mercantilist Assumptions National wealth = National power A nation’s economy is subordinate to national interests Goals Create positive balance of trade (reduce imports/increase Create exports) exports) Create and protect domestic industry Limit others’ competitive advantage Policies (Protectionism) Tariffs NTBs: Subsidies & quotas State (nationalized) industry Marxist Theory Marxist Karl Marx & Friedrich Engels – Communist Manifesto (1848) Karl Communist Materialism: economic relations (production and distribution of Materialism:
wealth) are the foundation of all societies wealth) Capitalism is inherently unequal Two opposing classes: capitalists (owners of the means of production) Two & workers workers Surplus capital (profit) made at the expense of the workers’ labor and Surplus controlled by capitalists = exploitation controlled Workers will eventually revolt and overthrow this unequal system in Workers order to REDISTRIBUTE WEALTH EQUITABLY Alternative to revolution = Social Democracy Mitigates the inequalities within modern economic relations Creates social safety nets: cradle to grave welfare Development in LDCs Development Monetary Approach GDP GNI (Map 68) Purchasing Parity (Map 70) Policy: Structural Adjustment Programmes (SAPs) Conditions attached to loans from IMF/WB Focus on cutting government expenditures Focus on increasing national revenues through export trade Process controlled by MDCs Capabilities Approach: Human Development (Map 58) GNI Educational Levels (Maps 46 & 47) Health Indicators (Maps 50 & 52) Policy: Poverty Reduction Strategy Papers (PRSPs) Outlines the policies/strategies governments will implement Outlines to promote economic growth and reduce poverty to Process a partnership between MDCs and LDCs Sustainable Development Sustainable Brundtland Report, 1987: Brundtland
“development meets the needs of present generations without compromising the ability of future generations to meet their own needs” their Economic Growth/Efficiency Environmental Conservation/ Environmental Responsibility Responsibility Social Justice/Equity Components Components Maps 62, 88, 90, 91, Maps
93, 95, 96 93, Terms/Questions Terms/Questions Liberal Theory Nationalist Theory Marxist Theory What are the various ways of measuring What
development? development? Sustainable Development ...
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