College of
Business
Administration
College of
Business
Administration
Thinker
Decisive Factor of Economy
Smith Accumulation of Capital
Malthus Counterforce of population growth
Ricardo Counterforce of population growth
Marx Struggle between worker and capitalist
Veblen Struggle between technician and financier
Hobson Need for market expansion to place the huge masses of capital
Shumpeter Innovation entrepreneurs
Of these, which decisive factors contribute to your “good society”? which detract?
2) Thorstein Veblen believed the businessman was the central figure of economics, but not the motor force. In fact, he believed businessmen to be ‘saboteurs’ of the economic machine, caring more about profit than producing goods. Do you agree? What is a contemporary example proving Veblen’s idea? (Hint: Think power company in Houston)
3) The recent dispute over tariff restrictions on steel would fall under whose school of economic thought? Which economist would be a proponent of this action? How expansive is the role of government intervention in your “good society”?
4) The value of accumulating material possessions played different roles for each economist (positive for Shumpeter, Keynes, Smith—negative for Marx, Veblen, Mill). What is the value of material possessions in your “good society”? Is the drive to accrue more wealth a positive or negative force in your economy?
5) Heilbroner writes economics at its core is an “explanation system, the problems and prospects, of the complex social entity we call the economy.” (p. 311) One can argue each philosopher’s theories were skewed by personal events and current events of their day. If this is true, is economic theory and economics a science, or simply explaining the world as one sees it? Can ‘economics’ be trusted?
6) Veblen talks about his theory of the leisure class, “…for these societies were not only rich enough to be able to afford a nonproductive class, but aggressive enough to admire them; far from being regarded as wasters or spoilers, those who rose to the leisured ranks were looked up to as the strong and the able.” (p. 231) “What is the nature of the economic man? How does it happen that he so builds his community that it will have a leisure class?” Will your “good society” have a leisure class or do you believe in the equity theory? “What is the economic meaning of leisure itself?” (p. 230)
7) Keynes believed that savings needed to be invested in businesses and if instead we “tuck these savings into mattresses or hoard them in cash, we should break the circular flow of income….and we should be suffering from a depression.” (p. 266) Thus, “if our savings do not become invested by expanding business firms, our incomes must decline.” The General Theory “pointed out the consequence of a lack of sufficient investment: if business was not able to expand, the government must take up the slack.” (p.275) Do you believe that it is the role of government to pick up the slack or is it the consumer’s responsibility? What responsibilities do corporations have to the system?
8) Hobson saw the imperialistic fight for and protection of new markets as the ultimate end of the world, however, the cold war brought imperialism to an end. We now live in a world of globalization founded on the fast-paced transfer of capital, information and technology. Would Hobson assign a similar prognosis for globalization? If not, where will globalization take us?
9) “At it’s core, economics is an explanation system whose purpose is to enlighten us as to the workings, and therefore to the problems and prospects, of that complex social entity we call the economy.” (p. 311) Economics is often implemented as a science yet does not follow physical rules or the laws of nature. What is the social usefulness of this abstract science? How can economics grow to accommodate the global demands of capitalism?
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