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?
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What happens to demand if the cost of labor continues to lower at an increasing rate?
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How do we fix the problem of decreasing demand due to lower labor costs?
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What summarizes the overall crisis of capitalism?
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What is the Transnational Capitalist Class (TCC)?
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What are the four fractions of the TCC?
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Describe the corporate fraction of the TCC.
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Describe the political fraction of the TCC.
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Describe the technical fraction of the TCC.
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Describe the consumerist fraction of the TCC.
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What is neoliberalism according to Sklair's definition?
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What is the term 'Washington Consensus'?
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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.
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How does the IMF make decisions?
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What are 10 things typically covered by the Washington Consensus?
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What did Babbs discuss about loans issued by the IMF and World Bank to developing countries?
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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.