The Early Days
grew slowly between 1500 and 1700. Counts individuals income
income per capita
this governing mentality/practice consisted principally of protecting individuals right to private property and ownership. Democracy? sometimes!
liberalism
a rapid change in the motherland. Abolition of private property, and a beginning of the experiment of central planning
russian revolution of 1917
THIS period was characterized by 1945-1973 - high growth rates, Keynesian gov spending during downturns, virtually no bank crises. Stability rested on 1. new tech 2. Bretton Woods concepts and 3. Mixed economy (social gov spending and capitalism)
The "Golden Age" of capitalism
the selling of of SEO’s - electric, water, energy, steel, manufacturing industries worldwide.
privatization
industrializing/"developing" countries that had borrowed heavily in the 1970s to create industries. As interest rates doubled in the US, so did global interest rates - causing developing nations to default en masse
third world debt crisis
the practice of setting production, jobs, and overall economy from the government rather than businesses planning separately
central planning
another name for liberalism. With just enough ruls to protect property, but no other social services
minimal state
stock market crash, tariffs, balanced budget theory (govs don't deficit spend during depressions)
describe the two elements of a MIXED economoy
Mixed economy - gov planning and capitalist planning
- the economic policies of Maraget Thatcher and Ronald Reagan - policies of lowering income taxes, reducing welfare state spending (especially housing and transport), reducing union power, and allowing money to be banked out of country (offshore bank accounts)
defaulting countries could borrow from IMF (big global bank) if they accepted high interest loans, little to no tariffs, and privatizing state owned enterprises. 2023 total loans = 111 trillion from about 80 “third” world countries. Rich countries essentially loan poor countries money and collect dat cash from interest
structural adjustment programs
taxes on imports and exports
tariffs
The americanized moniker for a philosophy of government with essentially no regulations and low to no taxation
libertarianism
elements of the first new deal
glass steagall banking act - separated commercial and investment banking, FDIC (bank deposits back by federal reserve)
Public enterprise/state owned enterprise
taking private enterprises into public ownership by the state. Sometimes for profit, sometimes not. France, norway, austria, england examples (railways, steel, setc).
Reagan’s theory of econ. 1. Slashing taxes on wealthy incomes which would supposedly be invested to spur new business development and thus new payrolls. (did not work out). 2. Minimum wage frozen, subsidies to the poor slashed (housing, food stamps)
Trickle down economics
asset bubble
things being valued on a stock market much higher than they are actually “worth” and then defaults happen. (loans →company valued too highly and bet on in stock markets → cant pay loans → defaults/bubble bursts).e.g. Housing bubble, tech bubbles,
the approximate year that Britain Ahckchually began to engage in free trade internationally (no tariffs). They practiced THIS concept before this year
1860 - infant industry protection - tariffs on imports to support buying from local producers
Chang asserts that the mass production system, or capitalism in its modern form, consisted of these four elements
advanced tech for production, increased lending/banking, the welfare state, and the rise of union membership
second new deal elements
social security act (old age/disability pension and unemployment insurance), Wagoner act (right to unionize by federal law)
gov spending during downturns to boost consumption (drives production)
Countercyclical macroeconomic policies
a theory of making the rich richer to boost production and making the poor poorer (undoing welfare state) to make workers work harder (improving productivity) and having the rich invest their money to increase supplies. Increase supply (rich ppl employ poors) =cheap consumer goods and more jobs
supply side economics
quantitative easing
printing money out of thin air (as opposed to matching bank loan amounts) as a response to financial downturn
5 elements that helped create capitalism (according to Chang)
1. new tech 2. colonialism 3. Rationalism (as opposed to superstition/custom 4. bank lending 5. industrial revolution
this "new" form of liberal thinking, in which the government's only real role is issuing currency. Definitely doesn't advocate for social spending
neoliberalism
Who was pumpin out more stuff between the wars? The US or USSR (who had higher growth)
USSR
Indicative planning
essentially central planning for a few industries. Still capitalism. Example countries: japan, france, south korea
possible with deregulation of "neoliberalism" - taking over of companies (monopolizing/merging) to take valuable assets and firesale the rest)
hostile takeovers
austerity
meeting downfall in tax revenue by cutting budgets drastically. Largely exacerbates depressions
these agreements things were supposed to be free, but often involved military force/colonization
free trade agreements / unfree - free trade agreements
the non-U.S. way of thinking about development -- free trade somewhat forced upon countries seeking loans from groups like the IMF and World Bank
washington consensus
THIS period was characterized by 1945-1973 - high growth rates, Keynesian gov spending during downturns, virtually no bank crises. Stability rested on 1. new tech 2. Bretton Woods concepts and 3. Mixed economy (social gov spending and capitalism)
The "Golden Age" of capitalism
colonized countries such as China, North Korea, Vietnam, and Cuba that declared independence from forced free markets and became socialist did this--protected their industries from free trade globally while having essentially capitalist internal economies
Import substitution industrialization
a strategy to deliver quick profit - fire employees and or skirt regulations to “cut corners” to boost profit. Effect of stressed workforce and worsening safety regulations
downsizing
Chang's conclusion on what's caused recent malaise and bank crises worldwide
de-regulation of banking and cutting back welfare state