Economics 1

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Economics 1

• Lecture 3
• Are we all subjects
• of market capitalism now?

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CEI

• In this lecture we say something about
• similarities and differences between real
  world
• economies (and in the ways economists see
  them)
• the common features of economies
• outcomes some international comparisons
• characteristics of capitalist economies
• the end of history and the great capitalist
  
• restoration
• why economists might differ

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CEI

• Common Characteristics of Modern Economies
• 
  
• the predicament of scarcity and the
• need for social co-ordination in
• their use
• institutions of ownership
• private social

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CEI

• specialisation / division of labour
• money and monetary institutions
• productive other economic organisations
  (firms)
• the state law regulation economic
  infrastructure public services redistribution
• markets

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CEI

• The predicament of scarcity
• This predicament and its relationship to economic
  outcomes can be illustrated in a simple diagram
  see Sloman Ch 1
• How does the UK Perform ?

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CEI

• Core institutions of a capitalist
• economy
• competitive markets
• markets for goods services
• markets for resources
• private ownership of resources
• the employerworker relationship

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CEI

• selfinterested rational maximising by
• individuals as consumers, workers etc
• ends and means
• maximising efficiency
• hierarchical organisationsfirms
• the profit motive
• M gt Cgt Cgt M

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CEI

• government
• ruleslaw and regulation
• resource using provision
• active policy interventions

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CEI

• Traditional pre-1989 Typology of
• Economic Systems
• Mechanism? Market or Plan
• Ownership? Private / Social
• Western capitalist market
• v Soviet socialist centrally planned

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CEI

• A neo-liberal Global Economy?
  
• Have we reached the end of history?
• Are we all living in liberal market capitalist
  societies now?
• What does that mean?
• global economic integration ?
• common forms of economic organisation
• at the nation state level ?
• a dominant neo-liberal ideology?

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CEI

• the great capitalist restoration ?
• transition
• privatisation
• capitalist market developmnet models
• international integration of markets for gds
  serv. and capital and technical knowledge
• significance of CIT

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• Varieties of Capitalism ?
• Capitalism against capitalism
• M Albert 1990
• liberal market capitalism
• social capitalism

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• Our preferred definition
• ...economics has three aspects or functionsto
  try to understand how an economy operates, to
  make proposals for improving it, and to justify
  the criterion by which improvement is judged.
  The criterion of what is desirable necessarily
  involves moral and political judgements.
  Economics can never be a perfectly pure science
  unmixed with human values.
• J ROBINSON J EATWELL (1973)
• An Introduction to Modern Economics
• McGraw-Hill, London

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CEI

• Economics is never value-free and always
• influential
• The ideas of economists and political
  philosophers, both when they are right and when
  they are wrong, are more powerful than is
  commonly understood. Indeed the world is ruled
  by little else. Practical men, who believe
  themselves to be quite exempt from any
  intellectual influences, are usually the slaves
  of some defunct economist. Madmen in authority,
  who hear voices in the air, are distilling their
  frenzy from some academic scribbler of a few
  years back.
• J M KEYNES (1936) The General Theory of
  Employment, Interest, and Money London Macmillan