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Chapter 12

Chapter 12 . Exploring Economic Equality . In Calgary from 2006-2007 Rent average $1089 Average House price was $414 046 Minimum Wage is $8.00 (at this time) $16 640 / year Can someone making minimum wage afford to live?. Chapter Introduction (Pg 309) . Chapter Introduction (Pg 309).

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Chapter 12

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  1. Chapter 12 Exploring Economic Equality

  2. In Calgary from 2006-2007 Rent average $1089 Average House price was $414 046 Minimum Wage is $8.00 (at this time) $16 640 / year Can someone making minimum wage afford to live? Chapter Introduction (Pg 309)

  3. Chapter Introduction (Pg 309) • What should a society value more? • Economic freedom and to take the risk of success and failure • Economic Equality – Sharing successes and failure as a society

  4. Chapter Introduction (Pg 309) • The chapter issue: To what extent should governments encourage economic equality, is related to two other chapter we have learned • Chapter 2 – Individualism • Chapter 3 – Collectivism

  5. Defining Economic Equality (Pg 310) • Competition is a key value in liberalism • Competition will set the prices for goods and services, determine who will get paid what and who will succeed and who will fail.

  6. Defining Economic Equality (Pg 310) • However, people who fail under a system of liberalism can find themselves without money to provide for their basic needs.

  7. Defining Economic Equality (Pg 310) • Economic inequality can occur from the following reasons • Competition • Individualism • Free markets

  8. Understanding of Economic Equality (Pg 310) • Economic Equality can mean many different things • Egalitarianism • Equal opportunity • Equitable distribution of wealth

  9. Understanding of Economic Equality (Pg 310) • Egalitarianism • People should own the means of production collectively • There should be a guaranteed annual income to meet the basic needs of people

  10. Understanding of Economic Equality (Pg 311) • Equality of Opportunity • There should be a minimum wage • There should be no discrimination in hiring workers

  11. Understanding of Economic Equality (Pg 311) • Equitable distribution of wealth • All people should earn equal wages for work of similar value • People with higher incomes should pay higher rates of taxes

  12. Understanding of Economic Equality (Pg 311) • The values you hold on collectivism or individualism will likely influence greatly your ideas on economic equality

  13. Understanding of Economic Equality (Pg 311) • The three approaches in dealing with economic inequality • Egalitarianism • Equal opportunity • Equitable distribution of wealth Can be placed on an economic spectrum

  14. Economic Spectrum Dealing with Economic Inequality Values of Collectivism Values of individualism Low degree of government intervention in the economy High Degree of government intervention in the economy Equitable division of wealth

  15. Understanding of Economic Equality (Pg 314) • Parties on the political right tend to favour • Small government • Less government involvement • Competition • Trickle down theory • More money will be created at the top by competition and will find its way to the common people

  16. Summary of Defining Economic Theory (Pg 310) • People have different understandings of economic equality • Egalitarianism • Equal opportunity • Equitable distribution of wealth • People from individualistic beliefs will define economic equality differently than people with collective beliefs.

  17. Promoting Economic Equality (Pg 315) • Is there economic equality in Canada? • When compared to 17 other industrialized nations Canada ranks 10th and is given a grade of C (See 315 for graph and details)

  18. Promoting Economic Equality (Pg 315) • Do you believe it is the governments responsibility to address economic equality?

  19. Promoting Economic Equality (Pg 316)

  20. Promoting Economic Equality (Pg 316) • Sometimes political and economic goals are closely aligned • Which quadrant would liberalism fit into ?

  21. Economies and Liberalism (Pg 317) • Liberalism and individualism value these concepts when it comes to an economic system • Self interest • Competition • Economic freedom • Private property

  22. Economies and Liberalism (Pg 317) • Any economic system exists to answer one question: • How do we deal with scarcity?

  23. Economies and Liberalism (Pg 317) • Scarcity looks at: • What will be produced? • How will goods and services be produced? • Who will make these decisions?

  24. Economies and Liberalism (Pg 317) • The way the government answers the previous three questions will determine what type of economic system will be in place.

  25. Economies and Liberalism (Pg 317)

  26. Command Economy (Pg 318) • Recall that communism was a response to the problems of Classical liberalism created by the industrial revolution.

  27. Command Economy (Pg 318) • Communism is a command economy. • A command economy is one in which the government has a high control over the economy. • Examples include The Soviet Union and Cuba

  28. Command Economy (Pg 318) • A command economy is also called a centrally planned economy or a public enterprise economy. • How do you think they will answer the three questions; what will be produce, who will produce it and who will decide this?

  29. Command Economy (Pg 318) • What will be produced • The government will conduct studies to see what the needs of society are • Individual consumer wants are not a priority

  30. Command Economy (Pg 318) • How will goods and service be produced? • The government owns most factories and services • The government sets quotas as to how much to make and service • People are often pushed into vocations they appear to have skill in

  31. Command Economy (Pg 318) • To whom will goods and service be distributed to? • The government will distribute based on need. This will create economic equality • Distribution may also be decided based on other governmental goals (military, industrial, etc)

  32. Command Economy (Pg 318) • Who will make these decisions? • The central planners in the government, often the leaders of the government

  33. Free Market Economy (Pg 320) • There are no true free market economies • The best examples are Britain during Industrial Revolution and The US before the Great Depression • It is also called capitalism, Laissez-faire economy, and private enterprise

  34. Free Market Economy (Pg 320) • What will be produced? • Supply and demand will decide what is produced due to scarcity • People demand items and producers try to fill the demand.

  35. Free Market Economy (Pg 320) • How will goods and services be produced? • Companies decide how to use scarce resources to fulfill customer demand to make the most profit

  36. Free Market Economy (Pg 320) • To whom will goods and services be distributed? • Whoever can afford to buy the goods and services can purchase them

  37. Free Market Economy (Pg 320) • Who will make these decisions? • The marketplace will make these decisions. The government allows people to determine their demand and producers to determine supply

  38. Free Market Economy (Pg 320) • Competition between companies result in low prices, higher quality, and wider selection • Efficiency is encouraged to keep prices low • Technology and innovation are encouraged

  39. Free Market Economy (Pg 320) • Workers and owners are motivated to earn money and make profits • The economy can respond quickly to change • When workers are in short supply wages increase

  40. Free Market Economy (Pg 320) • There may be a large income gap • Economic cycles – Good time and bad times • Periods of high unemployment • Advertising can manipulate the consumer • Producers can form monopolies • Hidden costs such as pollution or resource depletion • Resources wasted on goods people want but do not need.

  41. Equality of Opportunity (Pg 322) • Some people believe that equality is simply the removal of barriers that stand in the way for people to achieve economic success.

  42. Equality of Opportunity (Pg 322) • In Canada people are not allowed to be discriminated against for employment based on • Race • National or ethnic origin • Colour • Religion • Age • Sex • Sexual orientation • Marital status • Family status • Criminal record if pardoned

  43. Equality of Opportunity (Pg 322) • This typed of economic equality is usually found in liberal democracies such as Canada, Britain and The US

  44. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322) • The Quiet Revolution is a period of about 10 years in Quebec that began with the election of the Lesage provincial government • A large part of the quiet revolution was the take over of the education in Quebec by the government from the Catholic Church

  45. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322) • The purpose of this educational take over was to allow a better education system for Francophones to allow them to compete better with Anglophones in Quebec.

  46. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322) • The modernization of the education system removed some barriers to success for the Francophone who had been discriminated in the province due to perceived poorer education

  47. Equality of Opportunity and Affirmative Action in the United States (Pg 323) • In the United States there was a major problem with people being discriminated on based on race. • The government passed the Civil Rights Act of 1964 to deal with this problem

  48. Equality of Opportunity and Affirmative Action in the United States (Pg 323) • The laws give certain advantages to groups that are disadvantaged in order to bring them to a level equal to those who are not disadvantaged.

  49. Equality of Opportunity and Affirmative Action in the United States (Pg 323) • These laws are very controversial and many states still try to fight them based on the fact the believe that they violate the constitution

  50. Mixed Economy (Pg 325) • A mixed economy is one in which there is some form of government intervention in the economy. • Government intervention occurred in large part due to the devastating effects of the Great Depression.

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