Econ434handout3 - Chapter 46 CAPITALISM AND ITS...

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© Ralph T. Byrns Capitalism and Its Alternatives Contemporary Economics 1 Chapter 46 C C APITALISM AND I I TS A A LTERNATIVES H ow should societies be organized? What mix of allocative mechanisms seems fairest, or most efficient? The Soviet bloc’s collapse in the early 1990s and growing reliance on market forces in Eastern Europe, China, and Vietnam has many fans of capitalism gleefully proclaiming that centralized socialism is being swept into the dustbin of history. Will global capitalism eventually dominate all economic activity? Or is capitalism ultimately doomed, as many of its opponents steadfastly predict? Is a more genteel version of socialism the wave of the future? Might some societies survive as feudal monarchies, or may some countries increasingly revert to rule by religious zealots bound to traditional ways of life? Disagreements about human nature are at the core of such debates. Numerous allocative mechanisms, including brute force, tradition, random selection, queuing, and government, continue to be used to resolve some economic problems in all societies, but one message comes through loud and clear: The market is increasingly accepted as the dominant means of allocating resources to foster economic growth. Major reasons for this ascendance are ( a ) the emphasis on efficiency emerging from the growth of international trade, and ( b ) advances in telecommunications that have globalized information about the successes and failures of alternative economic systems. We begin this chapter with an overview of capitalism and libertarians, its strongest defenders. Anarcho-syndicalism, our second topic, shares with libertarianism distaste for government, but is less enamored of capitalism. Then we survey several types of socialism, including Marxism. After a bird's-eye view of how different social philosophies have been expressed in contemporary economies, the chapter concludes with discussions of possible limits to economic growth and "Buddhist economics"—the idea that the ultimate solution to economic want is spiritual rather than physical.
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© Ralph T. Byrns Capitalism and Its Alternatives Contemporary Economics 2 Perspectives on Capitalism Although market higgling and haggling predate written history, the first systematic description of capitalism was in Adam Smith's Wealth of Nations (1776). This pathbreaking book spawned countless studies of market economies. Most developed economies rely heavily on the market system, but markets have historically played only minor roles in the lives of most of the world's population. In some countries, primitive economic conditions limited market transactions; in others, leaders opposed to capitalism outlawed most market activities. The collapse of central planning in the Eastern bloc only hints at a worldwide evaporation of barriers to modern commercial activities.
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This note was uploaded on 01/12/2010 for the course ECON 434 taught by Professor Byrns during the Spring '09 term at UNC.

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Econ434handout3 - Chapter 46 CAPITALISM AND ITS...

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