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10a_Economy_and_Society - 10a_Economy_and_Society Economy...

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10a_Economy_and_Society Economy and Society You can take notes in Word as you listen to the audio files. Be sure to save the page when you finish. Audio File (running time: 44:23) 1. Play this mp3 file from your audio folder Use this link only if you've transferred audio files to your computer from a CD . 2. Play this streaming REAL audio file You can listen to this lecture online with your media player. 3. Download & play this mp3 file There are several ways of saving and accessing these downloads. Politics into Economics Lecture part 1 Politics has the potential to dominate the economic sphere. Adam Smith, in The Wealth of Nations outlines principles to prevent politics from exercising excessive domination. He argued that, in reality, the person who looks out for his/her own interests IS ONE WHO DOES MORE GOOD FOR SOCIETY . It was this "kernel notion" that became the bedrock of the liberal economic and political system of the United States. When the 1929 depression came, Smith's ideas came to be questioned. Franklin Roosevelt came up with a new idea. He got that idea from a British economist named JOHN M. KEYNES , who was one of the early students of MACROECONOMICS . The problem, Keynes said, is that people aren't SPENDING MONEY . If money isn't being spent in the private sector, then IT NEEDS TO BE SPENT BY THE GOVERNMENT . What was the important thing, for Roosevelt's program? What is the downside of this approach? How did World War Two affect the Keynesian approach? JOBS, WPA, CCC, BUILD PARKS, SIDEWALKS, TREES, ETC. PEOPLE HAD WORK! THEY HAD MONEY, AND COULD SPEND IT. WHEN THE GOVT SPENDS, THEY GO INTO DEBT, IS THE PROBLEM. WWII WAS EXAGGERATED-- SPENT WAY MORE THAN IT SHOULD HAVE, BUT GOVT SPENDING HELPED GET OUT OF THE DEPRESSION. At the same time that Keynes was advocating his particular approach, Milton Friedman was advocating a very different approach -- one that harked back to ADAM SMITH . What did Friedman think that government should do, in the economy? THEY SHOULD STAY OUT.
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What functions should a government perform, according to Smith? ONLY THE MINIMUM. PROVIDE FOR DEFENSE, PROVIDE INTERNAL ORDER, PROVIDE PUBLIC WORKS.
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