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 14 views. For similar materials see Free Enterprise in Business Administration at College of the Ozarks.
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Date Created: 10/07/16
Responses to Keynes: Fredrich Von Hayek (18991992) Born in Austria Austrian School: group of economist who argued for a free market economy. He is one of the most well known amongst this group. London School of Economics hired Von Hayek to publish a response to Keynes' articles. However, he could not publish a response the general theory... After WWI, Von Hayek moved to America and worked at the University of Chicago. The Road to Serfdom (1944) military and industrial planning might not disappear afterwards. during the war, there were a lot of price controls Hayek really focused on price. Two things price does: gives you a choice is a form of information Central planners frequently have to control price the minute you start controling price you start controling choice and information World was moving more towards central planning Central planned economy is where agencies of the government plan all economic activities for that economy. Hayek's plan was to create Gosplan, a 5 year economic plan. The US and all major countries fighting the war are centrally planned; thus, everyone rationed. Several ways to control price: Price control: government says this is how it is Government subsidies Licenses or certifications When the government begins messing with price it is the first step to a totalitarian state MontPelerin Society: conservative group that meets once a year to talk about free market economics Ayn Rand (19051982) from Russia hated communism due to it pushing her dad out of business blamed Christianity for communism immigrated to the United States, leaving family completely behind became a screen writer in Hollywood marries Frank O'Connor, semisuccessful actor No children During WWII, she published "The Fountainhead" (1943) The Fountainhead: about a man named Howard Roark an architect Second handers: people who steal other people's property Ayn Rand left Los Angeles to New York Developed a following called the "Collective" Members of the group were: Alan Greenspan: Chairman of federal reserve Nathaniel Brandon: Psychiatrist Wrote second novel "Atlas Shrugged" (1957) Atlas Shrugged: John Galt appears 600 pages into the novel Story mainly about a woman who is heir to a railway fortune Brother reeled into the collectivist movement and giving her fortune away Another man creates a better type of metal and get together "Who is John Galt?" Sold really well, surprisingly Objectivism is formed from this. Rejects any notion of sin Objective reality is all their is can perceive objective reality with our senses the purpose of life is your own happiness live for yourself you should be able to earn and consume whatever you desire argued against charity proper form government promotes laissez faire Spread Objectivism through the arts Alan Greenspan argued for deregulation people will lookout for their own best interests Milton Friedman (19122006) went to the University of Chicago Invented the withholding tax to fund the government continuously win the noble prize of economics Four terms to define Friedman: Gold Standard vs. Fiat Currency Gold Standard: currency backed by a specific quantity of a precious metal. US was on a Gold Standard up to 1971 Fiat Currency: currency where the government requires people to use the currency it issues Fiscal Policy vs. Monetary Policy Fiscal Policy: the governments taxing and spending patterns Monetary Policy: how much money is in the economy to circulate typically controlled by a central bank, such as the Federal Reserve Noble Prize Winner: Studied the Great Depression What caused the Depression and why did it go on so long? Discovered that during this time, the Federal Reserve contracted the money supply Money Supply: amount of money in the economy Too much money causes inflation Very common in Fiat Currency, when the government just prints a bunch of money Two Friedman advices: The government needed to gradually increase the money supply, like 23% a year. If there was a down turn, the money supply really needed to increase. Quantitative Easing: Increasing the money supply
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