GALBRAITH John Kenneth Galbraith • Canadian born, US • • • • • naturalized citizen Grew up on farm Berkeley PhD – Agricultural Economics WWII government management of prices Later advisor to JFK Three best known books • American Capitalism • The Affluent Society • The New Industrial State 1908 - 2006 Galbraith Quote “Though a hungry man cannot be persuaded as between bread and a circus, a wellnourished man can. And he can be persuaded as between different circuses and different foods.” Galbraith Themes • Large corporation planning – has replaced market as major economic force • Large capital investments for technology - drive need for planning • Desire for steady growth moderates prices • Planning requires control of demand • Purchases are now wants – enables control • Create loyal customer base • Product design, model changes, etc. - focus on loyalty • Mass media fill need for repetitive communication John Ruskin 1819 - 1900 • British Artist, Scientist, Poet, Environmentalist, Philosopher • The leading art critic of Victorian England • Wrote and thought as early environmentalist • Published Unto this Last as a series until public protest called a halt Ruskin Themes Include • Political vs. Mercantile Economy • Definition of Money - value and virtue of money • Scarcity vs. Abundance Mentality • Relationship between Rich and Poor • Wealth is power over people • Healthy, happy educated people are real wealth • Economy: circulation of wealth like blood in body Ralph Waldo Emerson 1803 - 1882 • American essayist, poet, and leader of Transcendentalism movement • Graduate of Harvard Divinity School - seven ancestors were ministers • Great champion of the individual and self-reliance Emerson - Themes • Need for all men to be producers – contribute to society • Man is born to be rich • But not all will succeed • Poverty demoralizes – a man in debt is so far a slave • The basis of wealth is the application of mind to nature - wealth comes to those who seize opportunities • “The craft of the merchant is this bringing of goods from where they abound to where they are costly” • Wealth has its own system of checks and balances • Matter pays her debt • The basis of political economy is non-interference Measures of Economy 1. Each man’s expense must proceed from his character – “as long as your genius buys, the investment is safe…” 2. Spend after your genius, and by system – “the 3. Help comes in the custom of the country, and the rule of Impera Parendo - “Things themselves secret of success lies…in the relation of income to outgo” refuse to be mismanaged” 4. Look for seed of the same kind as you sow – story of Furlong and Hotspur 5. All things ascend + absorb and invest POLO INFRASTRUCTURE Marco Polo • Merchant from Republic • • • • • of Venice With father & uncle, journeyed thru Asia & to China Returned after 24 years to find Venice at war Dictated story of his travels to cellmate Influence Columbus, others Died free, wealthy 1254 - 1324 Marco Polo: The Kahn’s China 1. Marco Polo – The writing describes a society that is organized and quite advanced. Not unlike how we’re organized. 2. Describe the society a. Peaceful b. Abundance c. Had a leisure class d. Division of labor • Doctors, Courtesans, Traders, Manufacturers e. Public financing • Khan collects tax • Trade barriers (3.33% for domestic, 10% for foreign) • One kind of money f. Commerce • Products – Silks, Salt, Sugar, Porcelain, Fruit, Wine, etc. g. Public works & Infrastructure – • Town Squares, Bridges, Streets, Water & Sewer (sort of) Infrastructure (1) What China Transport Rivers & Canals Roads & Bridges Harbor Sanitation Water & “Sewer” Commerce Warehouses & Markets Public Finance 1 Money System Taxes to pay for infrastructure Power Communications US Today Infrastructure (2) What China US Today Transport Rivers & Canals Roads & Bridges Harbor Same plus Rail (& facilities) Trucking (roads) Air (& facilities) Sanitation Water & “Sewer” Same plus Water treatment & storage Waste treatment Trash collection & landfills Commerce Warehouses & Markets Same plus Stock markets, etc Public Finance 1 Money System Taxes to pay for infrastructure Same Power Electric gen & distribution Gas wells & distribution Oil wells, refine & distribution Communications Telephony (land) Cell Internet (email, etc) John D. Rockefeller, Jr. 1874 - 1960 • Philanthropist - gave more than $537 million to educational, religious, cultural, medical, and other charitable projects • Member of Rockefeller “Family Dynasty” • Wealth built on oil – Standard Oil Company Ludlow Massacre - April 20, 1914 In the decades before World War I, industrialists such as John D. Rockefeller had become millionaires; by the early years of the 20th century labor unrest blossomed in the United States, particularly in the coal mine industry. Strikes grew into riots occurring throughout the US, and then into full scale battles, the most famous of which was in 1914, the Ludlow Coal Massacre, when Colorado National Guard opened fire on a tent city of striking miners and their families in Ludlow Colorado. Basic Facts On April 20, 1914, Colorado National Guardsmen attacked a tent colony of 1,200 striking miners at Ludlow, Colorado, killing 25 persons including 12 children, and looting and burning the colony. This was the worst of many such skirmishes between the government and the miners in Coal Field War of 1914, which lasted for seven months. Battle Statistics The battle lasted 14 hours and included a machine gun and 200 armed militia; the tent city was destroyed. Of the 25 people killed, three were militia men, twelve were children, and one was an uninvolved passerby. The strikers were mostly Greek, Italian, Slav, and Mexican workers; the militia were sent by the Governor of Colorado and ultimately by John D. Rockefeller, owner of the Colorado Fuel and Iron Company. From: http://archaeology.about.com/cs/military/bb/ludlow.htm For any industry to be permanently successful 1. Ensure to labor adequate remunerative employment under proper working and living conditions 2. To capital a fair return upon the money invested 3. To the community a useful service Rockefeller - Themes • Purpose of Industry is profits and social welfare • Cooperation in Industry – 4 parties • Capital • Management • Labor • Community • Labor Unrest – causes and cures Rockefeller – Industrial Creed 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Labor and Capital are partners Community is an essential party Purpose of Industry is as much to advance social well-being as material prosperity Every man is entitled to earn a living, to fair wages, to reasonable hours, … Diligence, initiative, and efficiency should be encouraged and rewarded Provide an adequate means of uncovering grievances Adequate representation of all parties Representation should be built “bottom up” “Do unto others as you would that they should do unto you” Afford the largest number of men the greatest opportunity for selfdevelopment Milton Friedman 1912 - 2006 • American Economist • Nobel Laureate in Economics • for "his achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy." • Economic Advisor to Goldwater, Nixon, Reagan Friedman - Viewpoint • “… in a free society … there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” • Alternative is “preaching pure and unadulterated socialism.” Friedman - Themes • Responsibility of Corporate Executive • To business owners/shareholders • To employees • To customers • “Social Responsibility” involves “taxing” other stakeholders – this is a government function • Shareholder Action – “They are seeking to attain by undemocratic procedures what they cannot attain by democratic procedures.” Socialism “Nearly all self-described socialists would agree that a socialist economy must be run for the benefit of the vast majority of the people … rather than for a small aristocratic, plutocratic, or capitalist class. … There is general agreement among socialists and non-socialists that a socialist economy would not include private or estate ownership of large enterprises.” -- http://en.wikipedia.org/wiki/Socialism#An_economic_system Libertarianism • "Libertarianism is a philosophy. The basic premise of libertarianism is that each individual should be free to do as he or she pleases so long as he or she does not harm others. In the libertarian view, societies and governments infringe on individual liberties whenever they tax wealth, create penalties for victimless crimes, or otherwise attempt to control or regulate individual conduct which harms or benefits no one except the individual who engages in it." -- definition written by the U.S. Internal Revenue Service (!), during the process of granting the Advocates for Self-Government status as a non-profit educational organization. • "Libertarianism is what your mom taught you: behave yourself and don't hit your sister." -- former Advocates Board Chair Dr. Kenneth Bisson GOETHE’S FAUST BA 150 McNair Section Johann Wolfgang von Goethe 1749-1832 • German poet, dramatist, novelist, state minister, and scientist – Studied law, philosophy, astrology – Later studied music, art, anatomy, and chemistry, geology • Began to write Faust in 1773, finished in 1831 • May be the most famous figure in German Literature Goethe’s Faust 3 High Level Themes Faust Passage 1 Faust: Their stubbornness, their opposition Ruins my finest acquisition; And in fierce agony I must Grow weary now of being just. [pg. 74, line 42 -45] Goethe’s Faust 3 High Level Themes ▪ Needs vs. Wants Faust Passage 2 Faust: Well, do it! Clear them from my path! A fine new cottage, as you know, I’ve built, where the old folks can go. [pg. 74 line 48 - 50] And this you claim you’ve done for me? I said exchange, not robbery! Deaf savages! I curse this deed; Now share my curse, your folly’s meed! [pg 76, line 52 – 55] Goethe’s Faust 3 High Level Themes ▪ Needs vs. Wants ▪ Unintended consequences of action Goethe’s Faust We’ve proved ourselves as it behooves, Pleased if our patron but approves. With but two ships we sailed away, With twenty we’re here in port today. [pg 72, lines 45 - 48] … Not how but how much – that’s what’s counted! What seaman does not take for granted The undivided trinity Of war and trade and piracy? [pg 73, lines 8 – 11] Goethe’s Faust 3 High Level Themes ▪Needs vs. Wants? ▪Unintended Consequences of Action? ▪End Justifies the Means? Faust Themes Great Works! End ? Want ? Means Need Unintended ?
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