The January 29 test

1. The January 29 test

3. I Pencil by Leonard Read “I am a lead pencil – the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.... Simple? Yet, not a single person on the face of this earth knows how to make me.”

4. Some basics of econ

5. what is capitalism? first, what is capital?

7. capital • Cash or goods used to generate income either by investing in a business or income property

8. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities

9. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities • The money, property, and other valuables which collectively represent the wealth of an individual or business

10. capital • Cash or goods used to generate income either by investing in a business or income property • The net worth of a business; that is, the amount by which its assets exceed its liabilities • The money, property, and other valuables which collectively represent the wealth of an individual or business • Human resources considered in terms of their contributions to an economy

11. capitalism

12. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand

14. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand • Capital, property and enterprises are privately owned and managed for a profit

15. capitalism • A broad economic system where competition in a free market determines the price, production and consumption of goods and services through the “invisible hand” of supply and demand • Capital, property and enterprises are privately owned and managed for a profit • New enterprises may freely gain market entry without state restriction

16. capitalism • Employment and wages are determined by the market and there will be some unemployment

17. capitalism • Employment and wages are determined by the market and there will be some unemployment • Some government intervention is necessary to guard against price fixing and collusion by producers

18. capitalism • Employment and wages are determined by the market and there will be some unemployment • Some government intervention is necessary to guard against price fixing and collusion by producers • The capitalist economy will likely follow a cycle of growth and recession

19. capitalism • Several basic forms:

20. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services)

21. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services) -- Laissez-faire (state plays minimal role)

22. capitalism • Several basic forms: -- Mixed (state intervenes in market activity and provides some services) -- Laissez-faire (state plays minimal role) -- Anarcho (markets completely free from state)

24. What are the world’s freest economies?

25. What are the world’s freest economies? • Hong Kong, 18th consecutive year

26. What are the world’s freest economies? • Hong Kong, 18th consecutive year • Singapore, Australia, New Zealand, Switzerland

27. What are the world’s freest economies? • Hong Kong, 18th consecutive year • Singapore, Australia, New Zealand, Switzerland • Canada, Chile, Mauritius, Denmark, U.S.

29. The U.S. only 10th?? • “The United States, with an economic freedom score of 76, has lost ground again in the 2013 Index. Its score is 0.3 point lower than last year, with declines in monetary freedom, business freedom, labor freedom, and fiscal freedom.”

30. what are world’s most restricted economies?

31. what are world’s most restricted economies? North Korea, Cuba, Zimbabwe

32. what are world’s most restricted economies? North Korea, Cuba, Zimbabwe Guess which are three of the poorest nations in the world?

33. what is socialism?

35. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state

36. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state • Some socialist societies direct the economy through a national plan, but most favor a mixed economy of public and private ownership

37. socialism • Broad economic system in which the major enterprises are either owned or controlled by the state • Some socialist societies direct the economy through a national plan, but most favor a mixed economy of public and private ownership • Others (Social Democrats) advocate social welfare programs in a mainly market-based economy

38. socialism • Private property and private ownership of capital typically is restricted

39. socialism • Private property and private ownership of capital typically is restricted • The state usually decides what is produced, prices, incomes and levels of production

40. socialism • Private property and private ownership of capital typically is restricted • The state usually decides what is produced, prices, incomes and levels of production • Often, unemployment is abolished and employment is guaranteed for life

41. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia

42. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia • Lots of social democratic nations including Sweden, Netherlands, Norway, Finland, U.K.

43. socialist countries? • Would include Venezuela, Bolivia, Laos, Syria, Belarus, Turkmenistan, Zambia • Lots of social democratic nations including Sweden, Netherlands, Norway, Finland, U.K. • Do we now include U.S. among social democracies?

44. U.S. owned/controlled companies • Fannie Mae, Freddie Mac, Amtrak, General Motors, Corporation for Public Broadcasting • Current administration financing hundreds of “green energy” companies… many of which are operated by cronies. Solyndra, A123, Amonix, Bright Source, Solar Trust of America, LSP Energy… all at room temperature

45. what is communism?

47. communism • The evolution of socialism

48. communism • The evolution of socialism • The role of the state has withered away and is no longer necessary for the functioning of the planned economy

49. communism • The evolution of socialism • The role of the state has withered away and is no longer necessary for the functioning of the planned economy • All property and capital are collectively owned and managed in a communal, classless and egalitarian society

50. communism • The evolution of socialism • The role of the state has withered away and is no longer necessary for the functioning of the planned economy • All property and capital are collectively owned and managed in a communal, classless and egalitarian society • “…from each according to his ability, to each according to his need…”