In class notes
In class notes FER 403 Free Enterprise
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This 2 page Class Notes was uploaded by Samantha Bressler on Friday October 7, 2016. The Class Notes belongs to FER 403 Free Enterprise at College of the Ozarks taught by Mr. Gary Hiebsch in Fall 2016. Since its upload, it has received 15 views. For similar materials see Free Enterprise in Business Administration at College of the Ozarks.
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Date Created: 10/07/16
Adam Smith: Custom Duty Collector of the port in Scotland. Proposed the idea of Free Trade, until it removes barriers to get into the country. This provides people with some degree of competition. Mercantilist system: Colonies provide raw materials to home country and then the home country would ship finished goods back to the colonies Measured the wealth of country by its gold or silver Purpose of Colonies: Make the home country rich Advantages of Free Trade: Provides greater variety of goods Allows lower prices on good bought Extra money spent on other items In 1990s, a host of Free Trade agreements including NAFTA, a trade agreement between Canada, Mexico, and America. Disadvantages of Free Trade: Competition can undercut you, which leads to fewer jobs Get around Labor laws: child labor Can get around environmental laws Do not benefit the poor Fair Trade: minimum price for the raw material being purchased tries to organize farmers, making it have socialistic characteristics No one regulates fair trade Proposed Direct Trade: similar to fair trade for a guaranteed minimum price but tries to do that through a local connection. Adam Smith (17231790) Wrote "The Wealth of Nations" published in 1776 Smith was concerned about monopoly. If you lived in Scotland or England you were required to be a member of the church. When a firm gets monopoly power the prices go up because there is no competition and quality goes down for the same reason. For there to be a free religion this is what to be needed: 1. legal freedom: have to be free to choose their religious path 2. Free of State Support: the government does not need to be paying for it 3. Free of Regulation: has to be able to do what it needs to do High protective tariffs gave a De Facto monopoly Under legal freedom: 1. enforces the law 2. Insure property rights 3. rules for commerce Invisible Hand: regulate the economy every individual will pursue his or her own best interest. occasionally there will be an unbalance in the economy people will move to meet the markets demands allowing things to work out. Criticism of the Invisible Hand: It takes too long to put into affect it relies on selfishness and greed the returns can vary dramatically Government should have a role in national defense there needed to have a legal system for contracts government should be able to take care of the public. Roads, parks, etc. there should be a public school system
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