SOC 295 Transnational Capitalist Class Flashcards

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Questions and Answers

What is capitalism?

Capitalism is an economic system based on capital.

Why does capitalism have to grow?

To compete. Capitalism must grow so that money can still be made.

How can the cost of production be lowered?

By increasing demand through advertising, producing products cheaper than others, using cheap raw materials and labor, and better technology.

Where does demand come from?

The workers. Signup and view all the answers

What happens to demand if the cost of labor continues to lower at an increasing rate?

Demand decreases. Signup and view all the answers

How do we fix the problem of decreasing demand due to lower labor costs?

By expanding markets and moving businesses around the world to sell to those who have more money, or providing credit to those without current money. Signup and view all the answers

What summarizes the overall crisis of capitalism?

Capitalism has to grow due to competition and faces challenges in lowering production costs while managing worker demand. Signup and view all the answers

What is the Transnational Capitalist Class (TCC)?

Comprised of transnational corporations and global political elites. Signup and view all the answers

What are the four fractions of the TCC?

Corporate fraction, Political fraction, Technical fraction, Consumerist fraction. Signup and view all the answers

Describe the corporate fraction of the TCC.

Those who own and control the major transnational corporations and their local affiliates. Signup and view all the answers

Describe the political fraction of the TCC.

Globalizing politicians and bureaucrats, such as the U.S. president. Signup and view all the answers

Describe the technical fraction of the TCC.

Globalizing professionals, exemplified by figures like Steve Jobs and Mark Zuckerberg. Signup and view all the answers

Describe the consumerist fraction of the TCC.

Merchants and media. Signup and view all the answers

What is neoliberalism according to Sklair's definition?

A variation of capitalism allowing unrestricted operation of the free market. Signup and view all the answers

What is the term 'Washington Consensus'?

A set of economic policy prescriptions promoted to developing countries by Washington, D.C.-based institutions. Signup and view all the answers

What do developing countries need to do if they adopt the Washington Consensus suggestions?

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Give an example of a state enterprise.

National banks and natural resources of a specific country. Signup and view all the answers

How does the IMF make decisions?

They vote, and some countries have more power when voting. Signup and view all the answers

What are 10 things typically covered by the Washington Consensus?

<ol> <li>Fiscal policy discipline, 2. Redirection of public expenditure, 3. Tax reform, 4. Interest rate reform, 5. Lower currency exchange rate, 6. Deregulate trade restrictions, 7. Foreign direct investment, 8. Privatization of state enterprises, 9. Deregulation to abolish barriers of entry and exit, 10. Legalization of property rights.</li> </ol> Signup and view all the answers

What did Babbs discuss about loans issued by the IMF and World Bank to developing countries?

They are issued in exchange for policy reforms. Signup and view all the answers

Study Notes

Capitalism

An economic system centered around capital accumulation and profit generation.
Requires constant growth to sustain profits due to competitive pressures.

Cost of Production

Lowering production costs can be achieved by:
- Increasing demand via advertising.
- Producing cheaper goods than competitors.
- Utilizing inexpensive raw materials and labor.
- Implementing advanced technology.

Demand Dynamics

Demand primarily originates from workers.
As labor costs drop rapidly, demand tends to decrease.
Solutions include expanding market reach globally and offering credit options to consumers.

Crisis of Capitalism

Capitalism faces crises stemming from the need for growth and declining labor costs.
Ongoing reduction in labor costs may threaten overall demand, prompting actors to seek alternative markets.

Transnational Capitalist Class (TCC)

Composed of global corporations and influential political figures.
Key players include:
- Bankers from international banks.
- Political elites from powerful nations.

Fractions of TCC

Four main divisions within the TCC:
- Corporate fraction: Owners and controllers of transnational corporations.
- Political fraction: Globalizing politicians and bureaucrats (e.g., U.S. president).
- Technical fraction: Global professional leaders (e.g., Steve Jobs, Mark Zuckerberg).
- Consumerist fraction: Merchants and media representatives.

Neoliberalism

A variant of capitalism defined by unrestricted free market operations.
Emphasizes national interests in enhancing global economic growth by dismantling traditional trade and labor regulations.

Washington Consensus

A collection of economic policy recommendations promoted to developing nations by entities based in Washington, D.C. (e.g., IMF, World Bank).
Fosters policy reforms in exchange for financial assistance and loans.

State Enterprises

Examples include national banks and control over natural resources within a country.

IMF Decision-making

Voting system in the IMF allows some countries greater influence and power in decision-making processes.

Washington Consensus Guidelines

Key aspects often addressed include:
- Fiscal discipline and efficient public expenditure.
- Tax reform to broaden the revenue base.
- Adjustments in interest rates to reflect market conditions.
- Deregulation of trade and investment barriers.
- Privatization of state-run entities.

Loans from IMF and World Bank

Loans are typically contingent on implementing identified policy reforms in recipient countries.

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Description

Explore key concepts related to capitalism through these flashcards designed for SOC 295 course. Each card provides definitions and insights into fundamental aspects of the capitalist system, including its necessity for growth and strategies to lower production costs. Perfect for students looking to deepen their understanding of transnational capitalism.