Economic Theory and Democracy

Economic Theory and Democracy - Economic Theory and...

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Unformatted text preview: Economic Theory and Democracy Democracy From Laissez-Faire to Reaganomics Laissez Faire Economics Laissez The rise of corporations: Blackstone: Religion Learning Both of the above: “consolidated and united into a Both corporation they and their successors are then considered as one person in law : as one person, they have one will, which is collected from the sense of the majority of the individuals : this one will may establish rules and orders for the regulation of the whole. the Commerce: “corporations, by the civil law, seem to have “corporations, been created by the mere act, and voluntary association of their members…but, as with us in England, the king's consent is absolutely necessary to the erection of any corporation, either impliedly or expressly given. Laissez-Faire Economics Laissez-Faire Thus: the corporation was invented early in the colonial era as a the grant of privilege extended by the Crown to a group of investors investors The corporation limited the liability of investors to the amount The of their investment--a right not held by ordinary citizens of Corporate charters set out the specific rights and obligations of Corporate the individual corporation, including the amount to be paid to the Crown in return for the privilege granted the The corporation was a LEGAL INVENTION--a socio-economic The mechanism for concentrating and deploying human and economic power economic Laissez-Faire Economics Laissez-Faire This began to change in the mid-19th century. Corporations began This abusing their charters to become conglomerates and trusts, amassing great private fortunes at public expense in the creation of factory systems and company towns. As a result, their political clout grew. and Corporations set wages, hours, production processes and machine Corporations speeds. They kept blacklists of labor organizers and workers who spoke up for their rights. Essentially, corporate officials Maintained unfair bargaining leverage over their workers. Industrialists and bankers: Hired private armies to keep workers in line, Hired Bought newspapers and bribed state legislators. Bought Campaigned to replace existing chartering laws with general incorporation that Campaigned set up simpler administrative procedures, claiming this would be more efficient. efficient. Attempted to end legislative authority over charters. Attempted Laissez-Faire Economics Laissez-Faire Corporations availed themselves of the “Due Process” Clause in the 14th “Due Amendment to the American Constitution in order to elevate themselves to the status of a citizen in American politics The Progressive Era (1901The 1917) 1917) City Reforms City City City Commissioner Plan Plan City Manager Plan Plan Cities hired experts in different Cities fields to run a single aspect of city government. For example, the sanitation commissioner would be in charge of garbage and sewage removal. A professional city manager is professional hired to run each department of the city and report directly to the City City The “Progressive Era” The State Reforms Secret Ballot Privacy at the ballot box ensures that citizens can cast votes without party bosses knowing how they voted. Initiative Initiative Allows voters to petition state legislatures in order to consider a bill desired by citizens. by Referendum Allows voters to decide if a bill or proposed amendment should be passed. Recall Recall Allows voters to petition to have an elected representative removed from office. Direct Direct Primary Ensures that voters select candidates to run for office, rather than party bosses. The Progressive Era The Newlands Reclamation Act (1902) (1902) Federal Reforms Encouraged conservation by allowing the building of dams and irrigations systems using money from the sale of public lands Elkins Act Elkins (1903) (1903) Outlawed the use of rebates by railroad officials or shippers Pure Food and Drug Act Pure (1906/1911) (1906/1911) Required that companies accurately label the ingredients contained in processed food items. Meat Inspection Act Meat (1906) (1906) In direct response to Upton Sinclair's The Jungle, this law The this required that meat processing plants be inspected to ensure the use of good meat and healthuse minded procedures. minded Hepburn Act (1906) Hepburn Strengthened the Interstate Strengthened Commerce Commission, allowing it to set maximum railroad rates. Federal Reserve Act Federal (1913) (1913) Created 12 district Federal Reserve Banks, each able to issue new currency and loan member banks funds at the prime interest rate, as established by the Federal Reserve Board. Clayton Antitrust Act Clayton (1914) (1914) Strengthened the Sherman Antitrust Act by outlawing the creation of a monopoly through any means, and stated that unions were not subject to antitrust legislation. Federal Trade Act Federal (1914) (1914) Established the Federal Trade Commission, charged with investigating unfair business practices including monopolistic activity and inaccurate product labeling. “The New Deal” The Emergency Banking Act/Federal Deposit The Insurance Corporation Insurance Civil Works Administration Public Works Association Works Progress Administration Tennessee Valley Authority Civilian Conservation Corps National Recovery Act (price fixes by labor National unions) unions) The “New Deal” The Keynesian Economics Regulation: the Administrative procedure Regulation: Act: Act: Congressional code writing (the CFR) Outreach to community (interest groups) Congressional hearings, oversight The Post WWII Era The The Bretton-Woods Conference: G.A.T.T. The IMF The World Bank The WTO Globalized Free markets: The Washington Consensus The “Chicago Boys” Milton Freidman Modernization “Shock Therapy” The “race to the bottom” Democracy vs. Free markets: Chili as a case study Blowback: culture vs. markets ...
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