In class Notes
In class Notes FER 403 Free Enterprise
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This 3 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 12 views. For similar materials see Free Enterprise in Business Administration at College of the Ozarks.
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Date Created: 10/07/16
Jean Baptist Say (17671832) Downturn or Recession: how do you get out of it? Entrepreneur is the solution. That which was being produced is no longer in demand. People do not desire a certain product as much as they used to. A recession makes the price of things go down because deflation. Inflation: a price of good goes up without any improvement of product. Deflation: a price of a product decreases without any change to the product. During a downturn the asset prices decline. The entrepreneur can create a new product or service generate demand for that product or service In a deflation period your money goes farther making it cheaper to start up a business. Say's laws of production: Often times the supply of x creates demand for y. Labor vs. utility: labor value: the value of product is labeled by the labor put into it Utility value: what you get out of it. Products should be priced by utility value. Entrepreneur must have capital. Saving and Investing is a good thing. A country cannot have too much savings consumption uses up wealth. Jeremy Bentham (17481832) rejected Christianity at a young age left all his money to an university in London as long as they displayed his body in a case. He is known for his philosophy of Utilitarianism Utilitarianism: Life has two elements: pleasure and pain the purpose of life is to maximize pleasure and minimize pain the ideal government should do this for their citizens the government should share the wealth John Stuart Mill (18061873) the son of James Mill who was a disciple of Jeremy Bentham was separated from siblings and required to learn continuously learned Greek by three and Latin by eight and economics at 14 had a nervous break down by 20 Met a woman named Harriet Taylor encouraged going to communes and engaging in communal living On Liberty (1859) can trace the Libertarian movement to this book the government should be small and not interfere with business Libertarian party: little to no government Utopian Communities: groups of people that lived out a life style they deemed fit. usually involved sexual practices one group is the Shakers: did not marry, or have sex created furniture that is very durable Oneida Community: John Humphrey Noyes is the leader The problem of marriage is the exclusiveness of it. Groups of men can marry groups of women. called complex marriage created silverware that is still popular today even though the Oneida community no longer exists Often times marriage is the first form of private property 4 types of socialism: Utopianism: a group of people get together and share their resources and ownership of goods. Private ownership and reward is viewed as selfish and discouraged. All members contribute to the production of goods and share equally any income The US has a long history with such groups: Puritans, Oneida Community, Shakers, and Amana colonies. Strengths: people are free to come or go, start with great enthusiasm, have produced useful and desirable products. Weaknesses: hard to get people to join the group groups promote laziness called social loafing others who work hard feel like they do all the work and being used motivating people to over achieve a lot of the younger generations end up leaving National Socialism: Business, industry, and labor serve the national goals and interests. Large business is given the resources it needs to produce products. It is guaranteed a market (the government), and it is protected from competition. In return the large corporations support the government. regulates where resources are going and coming profit and prices are set by the government Examples: Nazi Germany, Fascist Italy Strengths: very efficient Weaknesses: Not a lot of motivation to innovate Not a lot of resources because so limited, limiting entrepreneurship Created a stagnant economy Could lead to war Democratic Socialism: Advocates government directed redistribution of wealth, some takeover of key industries, and a large social safety net. This advocates the advancement of socialism through democratic means. Government subsidizes major industries Heavy regulation and can't close certain things down nationalized industries Examples: PostWar Great Britain, Scandinavia Strengths: Usually accomplishes its goals through democratic means Weaknesses: Revolutionary: Adovocates the violent overthrow of the government. The state would take ownership of all industries and agriculture. The government centrally plancs the entire economy. All ownership is vested with the state. Examples: Soviet Union, China under Mao Tsetung, Cuba Strengths: can dramatically raise production in a crises. Weaknesses: