Econ Notes

Wednesday, July 07, 2010

5:49 AM

Fundamental Institutions of the Present Economic System

Private Property
Ownership
Protected by the state
Competition
Evidence of struggle
State of nature: Necessary Struggle
Property
Market
Methods of production
Free Enterprise
Serfdom in earlier economic developments
The modern period created some sort of freedom in enterprise
The Industrial Revolution
Rise of Individualism
Laissez-faire
Government Control on industries where laissez-faire would not be advisable.

Cooperation
Competition leading to cooperation
Adaptation of Strategy to preserve common interest
Alliances among:
Producers
Consumers
Co-existence with competition

Division of the Field of Economics

Production
Exchange
Distribution
Consumption

Production deals with the factors necessary in the creation of wealth

Land
Labor
Capital
Enterprise (business organization)

Exchange devotes to the consideration of values & price

Principles of money
Credit and Banking
Price: exchange goods
International Trade
Fluctuation of economic activities
Distribution-apportionment of the social income/national dividend among the
different factors that cooperate in production
Rent
Wages
Interests
Profits
Distribution shares of the different factors of production

It should not be confused with distribution in marketing (producer to consumer)

Consumption is the utilization of goods & services in the satisfaction of human

wants
Significance: how to get finished goods is just as significant as to produce them

Economics and Business

Economics is a problem of daily life
It's everyone's business
Economics as the science of business
Some haphazard business activates

Economics and the Statesman

The Mercantilists (16th-18th Century)
World problems as principally economic in nature
Economics used to be an aid to politics (p18)

Economics and the Citizens

Making a living: essential to our existence
"…while it is not the cherished part of our existence, it is the most essential"
"…the striving for wealth is the most important consideration, not only as part
of an end but a means to an end."
It is everyone's concern.
"the welfare and happiness of the population depend upon theor spphere of
the social income which all cooperate to bring about in their respective
capabilities as owners of the land, capital, labor, and enterprises."

"The size and amount of the social income will depend upon how perfect and
effective their cooperation is."
"We are all students of economics."

Theoretical and Practical Economics

Practical is not enough.
Faulty conclusions from insufficient evidences.
Theoretical soundness (p21)
A vast amount of data to verify a certain theory.

Fundamental Economic Concepts

Goods is anything that satisfies human want