History Of Economic Thought: Progressive Period PDF

Chapter 4 HISTORY OF ECONOMIC THOUGHT: PROGRESSIVE PERIOD Overview Progressive economic thought comprises a wide range of economic principles and doctrines that have evolved or been included into modern economic schools This...

Chapter 4 HISTORY OF ECONOMIC THOUGHT: PROGRESSIVE PERIOD Overview Progressive economic thought comprises a wide range of economic principles and doctrines that have evolved or been included into modern economic schools This chapter of your learning journey will of thought. provide you an outline of these fundamental ideas and how they relate to SOcial progress and political economy. Beginning with Bentham's Utilitarianism, which emphasizes maximizing general happiness and wel. being in economic decision-making, the course will delve into a variety of prominent theories. Another important subject is monetary policy, which focuses on the impact of money supply and central bank policies in influencing economic stability and growth. This chapter consist of the following units: Unit 1: Economic ldealisms Unit 2: Socialists' Economic Standpoint Unit 3: Marxian Dialectic Materialism Through this chapter, you will gain a greater understanding of progressive economic theory and its consequences on society by looking into these diverse economic concepts, allowing you to assess and evaluate different economic systems and their impact on social progress and economic well-being. Learning Outcomes After finishing this module, students will be able to: 1. Determine the underlying concepts of diverse idealisms. 2. Evaluate socialism's key contributions. 3. Critique Marxian doctrine froma dialectic materialist standpoint.  Unit 1 Economic ldealism Objectives 1. List theimportant key points of capitalism.. 2. Align Utilitarianism to the idea Evaluate the impact enterprise market. ofjustice. of economic conservatism on the free Inis chapter's first unit examines the origins of numerous economic ideologies, ranging from classical economics through neoclassical economic philosophy. These ideas have had a significant influence on S SOCIely, altering socioeconomic and political processes. As an essential concept in all disciplines, including economics, ideology seeks to effectively allocate finite resources for the welfare of society. Capitalism, Socialism, and Communism are three important ideologies that have affected human discourse, and they are frequently viewed as opposing ideologies. Economic Darwinism, Utopianism, Bentham's Utilitarianism, and other ideologies that appeared during the pinnacle of Political i2 Economy, such as Social Conservatism and Theological Economics, are all covered in this unit. A detailed consideration of these notions leads to a better grasp of thekey beliefs held by the Socialist and Marxian schools of thought. This lesson will provide you with important insights into the formation of economic concepts and ideologies, as well as their significance in molding societies throughout the course of time. The information provided will improve your knowledge of the many economic viewpoints and their enormous impact on society as a whole. Formation of Economicldealism ldealism refers to wide range of philosophical positions that arque for a the inseparability of "truth" from human experience and comprehension. It implies that truth is formed within a given environment or is intimately linked to ideas. ldeology, on the other hand, is a theory, concept, or set of individual or group views and values. Ineconomics, idealism serves as the foundation for all human professions, with the goal of optimizing the allocation of our limited resources for the benefit of society. According to Morgan (1931), idealism thrives when sufficient preparations have been made to allow it to resist and preserve a balanced existence crises disciplined and modest lifestyle prepares us with the courage to withsted unfortunate circumstances by converting riches into reservVes rather than yielding to urgent demands. Different schools of thought in economics have supported diverse socio-political and economic idealisms. These ideologieshave affected conomic thought and policy throughout history. For example, classical economics, which evolved in the 18th and 19th centuries, championet laissez-faire capitalism and the belief in open markets as the mos effective way to allocate resources. Economists like Adam Smith and David Ricardo advocated for the aforementioned perspective. The growh of industrialization and the resulting social and economic inequities resulted in the emergence of competing idealisms during the nineteenth century. Socialism, for example, emphasized the need of collective Ownership and control over the means of production in order to achieve a more, fair society. This philosophy was expressed in the works of writers such as Karl Marx and Friedrich Engels, who criticized the capitalism system and demanded a revolutionary social reform. Marxism, which drew on socialist goals and integrated a full explanation of class and historical materialism, struggle another prominent ideology that emerged during this period. Marx maintained that the capitalist mode of production necessarily leads to exploitation and alienation, and he advocated for the creation of a classless society based on common ownership of the means of production. Communism, an ideology closely connected with Marxist ideals, rose to popularity in various countries during the twentieth century, including the Soviet Union and China. Communism sought to create a classless society by abolishing private property and establishing a state-controlled planned economy. These examples demonstrate the wide diversity of economic idealisms that have influenced economic philosophy and policy throughout history. We can acquire insights into the fundamental principles and values that have shaped socioeconomic dynamics by analyzing the evolution of these ideologies. Types of Economic System An economic system serves as a framework for the creation, allocation. and distribution of capital, goods, and services within a certain geographical area or society. It consists of the institutions, organizations. decision-making processes, create a and Consumption patterns that community's economic structure. AS a result, an economic system is an essentlal component of the social structure as a whole. The providesS tabie bo a concise comparison of the three systems: main types of econoe Traditional and Cultural Values Limited custom-influenced Stability and technological policy decisions Preservation progress Traditional are largely Concerned with Use of renewable Economic growth the nation, tribe, resources and development or ethnic group. are lacking. Social integration The distribution of and community Economic money is cohesion opportunities are determined by limited. heritage. Inequality and gender Farming, hunting, discrimination and gathering practices have essentially remained unaltered over the centuries. Environmental factors are critical." Private control Encourages Inequality of of resources and entrepreneurship income and manufacturing and innovation. concentration of Capitalism means. wealth. Market i, 3. i Economy based mechanismsfor Externalities on the free efficient resource andmarket market. allocation. failures.  motive Individual liberty There are no Profit and competition. and economic social safety mobility are nets. Individual liberty intertwined. and autonomy. Individual Collective Greater social freedom and ownership or justice and choice are control of equality. restricted. Socialism resources and All members of producing Profit incentives means. society have for innovation equal access to are lacking. basic Economy that has been requirements. Centralized planned. decision-making Economic has the Wealth planning for the benefit of potential to be redistribution. inefficient. society. Essential servicesare provided by the government. Common Equality and Incentives for ownership of freedom from productivity and resources and exploitation. initiative are Communism producing lacking. means. Theabolition of social Personal There are no hierarchies. liberties are social classes. restricted due to Making decisions centralized society A as a grOup. authority. without astate or classes. Full-time There is arisk employment. of autocratic Distribution of control and commodities corruption. and services on an equal footing.  Bentham'sUtilitarianism Utilitarianism is a philosophical thought that advocates for acts that aximize satisfaction while reducina miserv or harm. Proponents of this Concept include Jeremy Bentham and John Stuart Mill. Bentham's theory nighilights the role of pain and pleasure in human behavior, which Milladds on by pushing for government involvement to rectify wealth imbalances and ensure a fair distribution of profits. Utilitarianism has had a large impact on several sectors, including economics, politics, and education. The central tenet of utilitarianism is that ethically correct behaviors promote happiness or pleasure for the greatest number of people. Utilitarianism is founded on three fundamental ideas:. i ii. The ultimate intrinsic worth is pleasure or happiness. Actions are correct when they foster happiness and incorrect when i*2s they bring unhappiness. Everyone's happiness is valued equally. :Act utilitarianism and rule are the two primary types of utilitarianism Act utilitarianism considers the effects of individual actions in utilitarianism. order to optimize overall utility or well-being. In contrast, rule utilitarianism addressesthe implications of following a set of rules or principles. Tiered 5pricing is an example of rule utilitarianism in the business sphere, where ar-different customers pay varying prices for a product or service based on their ability to pay. Act utilitarianism can be seen when pharmaceutical corporations create government-approved pharmaceuticals while taking tominor adverse effects into account in order to benefit a wider number of people. Act utilitarianism embodies Machiavelli's famous statement that the end justifies the means. It is crucial to highlight that. despite its popularity; utilitarianism has been the topic of criticism and ethical controversy. Critics claim that it may prioritize enjoyment over individual rights and justice issues. overall Furthermore, measuring happiness and determining which activities actually enhance utility are difficut and subjective undertakings. In practice, utilitarianism has influenced policy and ethical considerations in 2ir variety of disciplines. In economics, for example, cost-benefit analysis frequently incorporates utitarian principles by measuring the overall happiness or well-being provided by a certain policy or project. The pursuit of policies that attempt to increase societal benefit while minimizing harm In politics can be traced back to utilitarian reasoning. Econonmic Conservatism and Christian Liberalism Economic conservatism emphasizes fiscal responsibility and dok, control. Fiscal conservatives argue for policies that minimize overal government expenditure, prevent deficit spending, and balance national debt through balanced budgets. Conservatism's co values include veneration organic culture, hierarchy, authority, and for tradition, money. To guarantee societal stability and continuity, Conservatives strive toprotect institutions such as religion, parliamentary rule, and properv rights. In contrast, Christian liberalism translates into economic ideasthat promote the freedom to develop, associate, trade, and contract. In Christian teachings, the concept of equal rights serves as a solid foundation for the principle of equality before the law.While conservatism resists rapid change and favors the preservation of society traditions, Christianity has over the centuries contributed to the expansion of market freedoms and activities based on religious scriptures and ecclesiastical standards. Thomas More, a key figure in Christian liberal thinking, coined the term "utopian society" to describe an ideal society that does not exist in reality. Utopian societies are distinguished by beneficent governments that ensure citizens' safety and well-being. In these cultures, everyone is treated equally and with dignity, and everyone lives in safety and without fear. Economic conservatism favors the status quo, whereas maintaining Christianity promotes development and improvement. In practice, these ideas can be seen in taxation, welfare programs, regulation, and the balance of individual rights and collective duty. The degree to which economic conservatism or Christian liberalism impacts policymaking can vary according to a country's political landscape, cultural values, ano historical circumstances. Theocratic Economic Thought Economic ideas and theories that are affected or led by religious belo and doctrines are referred to as theocratic economic philosopny. includes economic systems and policies that are intended tobe consistel with religion ideals and teachings. Religious authorities or organizations may play a substantial influence in determining economic policies, rule and decision-making processes in a theocratic economic sys Theocratic economic theory varies according to societies or community pecific religious beliefs and traditions. Economic issues such as money  poverty, property rights, labor, in and social social justice may have different positions different religions. Religious beliefs, moral norms, and ethical considerations may guide economic actions and behaviors. There are and presentexamples historical theory. lslamic economics, for example. is based on of theocratic econoG and emphaszes themes such as Sharia law principles economic justice, interest prohibition (riba), and ethical business practices. The economy example, is inspired by Catholic of Vatican City, Tor social teachings that stress community well-being and individual dignity,. Reliaious ideals and standards interwoven into into are economic decision-making processes in theocratiC economic philosophy, with the goal of building a iust and equitable society s based on religious principles. The extent to which infused into economic policies and religious ideas, are practices, on the other hand, can r and diverse vary, readings of religious scriptures might result in varied economic methodswithin theocratic systems. Among the notable figqures. in the field of theocratic economic philosophy are: wic»lbn Khaldun: An Islamic thinker from the 14th century who wrote about therelationship between government, and economic religion, 9N3 prosperity. He highlighted the need of social cohesiveness and justice in economic progress. ii.Ayatollah Ruhollah Khomeini: The leader of Iran's Islamic.i Revolution who campaigned for an lslamic-based economic system. He advOcated for self-sufficiency, social fairness, and the r abolition of exploitation. Sayyid Abul Ala Maududi: A notable Islamic thinker who emphasized social welfare and equitable wealth distribution in an Islamic-based economic system. He advocated for the abolition of h interest-based financial systems as well as the construction of an equitable economic order. M Jean-Baptiste Colbert: King Louis XIV of France's finance itsminister:. who supported economic policies influenced by Catholicism and governmental interests. He emphasized government intervention in the economy in order to enhance national prosperity and progress.  theological and socio-politicalcontexts, these In their different of thneocratic economic theory..The personalities shaped the development theory can be found in economic policies. influence of theocratic economic welfare systems in a variety of religiously corporate practices, and social diverse countries and communities. Evolutionary Economics the evolution economics is a viewpoint that acknowledges role of individuals and Evolutionary society in and highlights the of economic systems that It opposes standard economic theories affecting economic behavior. decision-making and instead views psychological presuppose rational Thorstein Veblen. a as important drivers of economic behavior. variables from the United States, was an early proponent sociologist and economist do not He contended that economic processes of evolutionary economics. work but rather change throughout time. Veblen's remain static on economic the relevance of social and cultural factors emphasized rationality. economic theory's prevalent belief in conduct and questioned evolutionary economics the conventional economic approach, Unlike that economic activity and development can be viewed through contends This viewpoint draws analogies between evolutionary perspective. evolution, contending that economic economic systems and biological over time. It acknowledges that systems change, adapt, and transform and is influenced by human nature impacts economic decision-making however, psychological and social elements. It is crucial to emphasize, not always adhere to strict Darwinian that evolutionary economics does principles. While Darwin's theories have been associated with economics, in terms of adaptation and competition, there are discrepancies particularly inthe application of evolutionary notions to economics. Another well-known economist, Joseph Schumpeter, recognized He contendeu importance of entrepreneurs in driving economic proress. and business that economic development is dependent on invention While ownership, and that economies run in cycles of creative destruction, fo influenced by evolutionary thought, Schumpeter's perspective more on the role of individuals, particularly entrepreneurs, in determining economic processes.  Overall, evolutionary economics an alternative paradigm for offers comprehending economic phenomena by highlighting the dynanic nature onomicsystems and the impact of psychological and social elements on economic behavior. It calls into question the concept of pure rationality ald emphasizes thesianificance of examining economic processes in the Context of a larger societal backdrop. EvOlutionary economics has contributed to various disciplines within economic subfields as economics, behavioral such institutional etonomics, and the study of technological change have benefited from evolutonary economics, it has revealed how institutions, social norms, and cultural elements influence economic Outcomes. Economists get a more thorough grasp of economic dynamics and can constructmore realistic models and policy recommendations by taking into account the evolutionary nature of economic systems. It is important to recognize that evolutionary economics is a varied and dynamic field with continuous research and controversies. Scholars continue to investigate and improve the concepts and method ologies within this paradigm, thereby improving our understanding of the intricate relationships between individuals, society, and economic systems. Key Takeaway The main takeaway from the lesson on Economic ldealism is that ideological perspectives and have a strong influence on economic beliefs systems.Throughout history, much economic idealism such as capitalism, Socialism, and communism have formed human discourse and influenced these idealisms Socioeconomic and political dynamics. Understanding allows for a more in-depth understanding of the underlying concepts their enormous impact on espoused, by many schools of thought and SOciety as a whole. Economic idealism alsoemphasizes the significance of society distributing finite resources for the betterment OT successfully perspectives. While taking into account various economic  Unit 2 Socialists' Economic Standpoints Objectives 1. Explain circumstances that contributed the to the rise of he socialist schoolof thought. 2. Classify the various forms of socialism. 3. Summarize the basic concepts of socialism. Capitalism was previously associated with freedom, but this has changed over time. However, it is currently difficult to identify whollv socialist countries as dictatorial because of the government's control over resources, which attemptsto benefit the entire people. Nonetheless. several countries identify primarily as capitalism while adopting features of socialism or communism.As dissatisfaction with capitalism grew, socialism rose to prominence, while being frequently misunderstood and misaplied. This lesson tries to define socialism as an economic system in which the means of production are cooperatively owned rather than privately owned. It offers a thorough grasp of socialism as one of the most prominent economic systems of thought to emerge from the early 17th century. Furthermore, the lesson digs into socialism's important influence, helping learners to get a thorough aware awareness of of its its advantages and disadvantages in social, political,and economic elements of society. Emergence of Socialism as a School of Thought Socialism an economic and political system that can be distinguished is by public or community ownership of the means of production, which includes machinery, tools, and factories utilized for direct creation of go005 to suit human needs. It precedes communism and is regarded as a lei wing economic school of thought. Several influential socialist intellectuas including Robert Owen, Henri de Saint-Simon, Karl Marx, and Vladim Lenin, helped shape socialism doctrine. Robert Owen, an early socialist theorist, campaigned for cooperative societies and felt that appropriate education and the establishment of better working conditions might alleviate social issues. Another major socialist thinker, Henri de Saint-Simon, highlighted the necessity scientistsand industrialists to govern society, believing that their ShI would assure economic prosperityand social harmony. Kari Marx, pernapS the most well-known Socialist thinker co-wrote "The Communist Manifesto" and established historical materialism theory. Marx maintained that class struggle drives history and that the proletariat, or working class, would finally overthrow the bouraeoisie. or capitalist class. He envisioned a world in which workers jointly owned and controlled the means of production, rather than private ownership. During the Bolshevik Revolution of 1917 in Russia, Vladimir Lenin, significant player in the Russian Revolution. expanded on Marnx's ideas and implemented socialist planning. Lenin integrated past socialist doctrines and created the concept of a vanguard party to gulde. ne working class in anti-capitalist struggle. Socialism arose in response to its perceived excesses and abuses of liberal individualism and capitalism. Industrial output and rapid economic growth under capitalist systems in Western European countries throughout the late 18th and early 19th centuries resulted in wealth and power concentration, income disparity, and social concerns. Socialists contended that collective ownership of capital and centralized planning could alleviate these difficulties. The government controls every legal decisionabout production and distribution in a truly socialist society. People rely on the government for basic necessities like food and healthcare, and the government sets production rates and prices for commodities and services. Socialists think that common capital. ownership and centralized planning can result in a more fair distribution of goods and services that is beneficial to society as a whole. However, the breakdown of socialist central planning in the Soviet Union and Maoist China in the twentieth century led to a reevaluation of socialist systems. Many modern socialists took different paths, such as market socíalism or democratic socialism, Overall. socialism has changed over time in response to changing historica circumstances. It is an alternative to capitalist systems that aims for greater economic equality and social wellbeing through common ownership and centralized governance. Various Forms of Socialism Socialism takes several forms, all of which include the aspect of collective ownership.The following are key manifestations of socialism:  of socialism and a market i. Market Socialism is the combination and allocate to set prices economy. uses market mechanisms It social ownership. Individual resources while preserving under thie are permitted firms entrepreneurship and private of important on collective ownership which is based strategy, industries. socialism argues for ii. Democratic Socialism: Democratic It aims to and social control of companies. democratic processes equality and social welfare by redistributing achieve economic Democratic strong social safety nets. wealth and establishing through seeks to make society more egalitarian socialism democraticdecision-making and participation. state socialism ii. Authoritarian State Socialism: Authoritarian entails extensive state control and economic planning. It has a strong central government and limited democratic engagement. like the former This type of socialism was prevalent in regimes Soviet Union and other centrally planned economies. socialism strives to iv. Revolutionary Socialism: Revolutionary restructure society through revolutionary tactics. It highlights the importance of movements and class struggle workers' in destabilizing capitalism structures and building a socialist society. The eradication of private property and the development of worker controlled means of production are frequently advocated by revolutionary socialists. V. Utopian Socialism:In the early stages of socialist ideas, utopian socialism evolved, It aimed to build ideal societies founded on the ideas of cooperation, equality, and social harmony. Utopian socialists envisioned self-sufficient societies with shared resources and voluntary collaboration, and their ideas influenced subsequent socialist movements. vi. Libertarian Socialism: It is a form of socialism that places a major focus on individual liberty and decentralized decision-making. It advocates for direct democracy, self-government, and local sovereignty. Libertarian socialists advocate for in which a society power is shared rather than concentrated in the hands of the state corporations.  hought: Then and Beyond vii. Religious Socialism: This blend within socialist concepts with a religiousor spiritual numerous religious context. Based on the ideals and teachings of traditions, it stresses social justice, equality, and Community. Religious socialists freguently advocate for and socialreforms that are economic consistent with their religious vievws. These different types of socialismn 5 found within the larger show the variety of perspectives socialist movement. Each.ei. Vision and plan type proposes Its 0wn for attaining a more equal and democratic society. precise form of socialism The pursued is frequently influenced 3: cultural, and ideological by historical, elements in various countries and conditions. Socialism's Basic Tenets Socialism aims to create a classless society by aeconomic eliminating the imbalances and class conflicts that exist in capitalism. Several iessential principles influence it: iji, Public ownership:Socialism arques for the collective ownership of iS3 the means of production and distribution. This places 373. social 7wellbeing and the common good ahead of private profit. The idea is for resources and money. to be shared and managed collectively rather than concentrated in the hands of a few individuals or Di-ew corporations. rdoue ii Economic Planning: on the government's central Socialism relies privi ie planning to manage and regulate economic activities. This entails 1roicoordinating production, distribution, and resource allocation in accordance with societal demands rather than market forces. The oiiS.DS goal isto ensure effective and equitable resource allocation while ",VaWIN 'avoidingtheinefficiencies and disparities that unregulated markets E ican cause..,i, DEgalitarian Society: Socialism strives for a society that is equitable and free of class divisions. It seeks to erase the hierarchical divisions between capitalists and workers by encouraging individual economic equality. This includes minimizing differences in income and wealth, ensuring equitable access to opportunities, and fighting societal systems that promote inequality. iv. Provision of Basic Reguirements: Socialism emphasizes the government's responsibility to provide basic requirements for all members of society. Access to food, shelter, education, healthcare and employment are all part of this. Socialism seeks to build a more equitable society in which everyone has the opportunity to succeed by ensuring these basic necessities. V. Limited Competition: Socialism frequently involves the state as the lone entrepreneur, resulting in less competition in certain areas, When opposed to a market-driven economy, this can result in a restricted range of consumer choices. The argument for limited competition isto avoid the accumulation of wealth and power in the hands of a few and, instead, to prioritize communal decision making and social welfare. vi. Price Control: In a socialist economy, rather than being set purely by market forces, prices for products and services are frequently regulated by the state. The goal of price regulation is to prohibit exploitative pricing practices while also ensuring the affordability and accessibility of necessary goods and services. It may entail imposing price ceilings or applying price subsidies in order to make items more affordable to the general public. vi. Social Welfare: Socialism prioritizes the protection and well-being the working class. Job security, minimum salaries, worker rights, and the ability to organize trade unions are examples of such measures. The goal is to empower workers, improve their living conditions, and make society's wealth and power distribution fairer. These ideas reflect socialism's priority for achieving economic equality, social wetfare, and societal well-being. It is crucial to highlight, however, that the specific execution and interpretation of socialismn can change across different countries and settings, resulting in differences in the level of government control, the role of markets, and the exact policies and programs utilized. Impactof Socialist ldealism Socialism has had a considerable impact on nations, especially during periods of protest against capitalism's inequities and exploitation. It has left an indelible mark on social, cultural, and political dimensionts. portraying Ttself as a viable alternative system, Socialism, on the otner hand, has both advantages and disadvantages. Among the benefits of socialism are:. Social Justice: Socialism seeks minimize socioeconomic to differences and promote order to establish a more fairness in equitable society in which everyone has equal possibilities. ii. Need-Based Production: Socialism emphasizes addressing the basic needs of individuals and society, emphasizing the significance of supplying basic essentials over profit. Equitable Wealth Distribution: Socialism strives for a more equitable distribution of wealth and income among the population, with the goal of reducing income inequality and addressing the Concentration of wealth in the hands of a few. v. Rapid Economic Development: Socialism can contribute to acceleratedeconomic development and infrastructure growth by mobilizing collective resources and focusing on societal advancement. Long-term Plan: Socialism promotes long-term planning and : sustainable methods, taking into account the environmental and social implications as well as economic progress. This strategy seeks to build a balanced andsustainable society. vi: Economnic Stability: Through centralized planning and regulation, Socialism tries to reduce the likelihood of economic crises by mitigating economic fluctuations and fostering stability. vii. Minimal Inequality and Class Struggles: Socialism tries to decrease class disputes and improve harmony in communities by resolving income gaps and boosting social cohesiveness. : vii. Increased Social Welfare: Socialism frequently involves comprehensive social welfare programs that ensure all members of society have access to basic necessities such as food, housina. r healthcare, education, and job. This improves social welfare and helps to alleviate poverty.  However, Socialism has some negatives, such as: i. Inadequate Cost Calculation: Centralized planning in socialism can confront difficulties in precisely measuring production and distribution costs and benefits, which can lead to inefficiencies. i. Lack of Incentives: Without capitalism's monetary drive, issues about individual motivation and innovation may arise. The absence of rewards for individual achievement can have an influence on productivity and creativity. ii. Lack of Economic Freedom:Greater government control over economic activities in socialism may limit individual decision-making and entrepreneurship, potentially stifling economicfreedom. iv. Economic Freedom: In socialism, greater government control over economic activities may impede individual decision-making and entrepreneurship, thus suffocating economicfreedom. V. Lack of Market Freedom: Limiting market competition can lead to fewer consumer options and potentially slower economic growth as Compared to more market-driven economies. It is worth noting that many capitalist economies now include progressive Most characteristics. countries have mixed economic systems, which combine parts of free-market capitalism and state intervention,with the government and private persons both playing roles in production and distribution management.One advantage of socialism is its emphasis on serving the needs of all members of society, including assuring access to basic goods and services, This creates a sense of security and helps people to focus on their task, which leads to better results. Brief Socialist Analysis: Philippine Situation Throughout the history of the Philippines, socialist economic thinking has had a limited but noticeable presence. Here are some important facts about socialist economic philosophy in the Philippines: i. Early Socialist Movements: During the late nineteenth and early twentieth century, socialist ideals began to flourish in the  Phiippines. Workers' rights, land reform, and social equality were advocated for by labor and neasant movements. These movements were critical in building the framework for socialist thinking in the country. ii. Marxist Influence: Marxist ideas and socialist ideologies gained traction among Filipino and activists. intellectuals Leaders like Crisanto Evangelista and Claro M. Recto were instrumental in popularizing socialist ideas and implementing Marxist principles into their work. Hukbalahap Movement: Initially created as an anti-Japanese WWl.the Hukbalahap movement transformed guerrilla force during into a communist-led peasant movement with socialist ideals. During the 1940sand 1950s, the movement gained enormous clout in the countryside by addressing rural poverty, landlessness, and social inequality. iV, Since the mid-tvwentieth century, socialist parties Socialist Parties: such as the Partido Komunista ng Pilipinas (PKP) or the Communist Party of the Philippines have been active in the country. These parties have pushed for socialist values, class struggle, and revolutionary transformation, despite official opposition and oppression. V. Impact on Labor and Social organizations: n the Philippines, socialist ideas had a' considerable impact on labor unions and Social organizations. It has aided in the advocacy for workers' rights, fair salaries, social justice, 'and equitable economic allocation, Socialist beliefs have frequently aligned with the needs of society's marginalized and oppressed groups. vi. Influence on Policy Debates: Socialist economic philosophy has had an impact on policy debates in the Philippines, particularly on agrarian reform, wealth redistribution, and the promotion of social welfare programs. To alleviate socioeconomic inequalities and promote equitable growth, socialist ideals have been introduced into policy discussions. vi. Government Challenges and Persecution:In the Philippines, socialist groups and parties have experienced government  of martial law and periods and persecution. During targeted, limiting their Challenges aroups were persecution, socialist political and freely. capacity to operate openly economic ideology has not vi. While socialist Current Relevance: Philippines, it continues to in the acquiredwidespread acceptance principles continue to Socialist political debate. have an impact on injustice, poverty about social be significant in discussions of a more egalitarian society reduction, land reform,and the search Key Takeaway ownership, putting socialgood ahead of Socialismpromotes collective central planning to accomplish efficient private profit. It is based on differences, with the resource allocation and to minimize socioeconomic economic equality. Socialism promotes social welfare by goal of achieving met. lt emerges as a guaranteeing that all individuals' basic needs are critique of capitalism, proposing a different economic and political framework. Socialism comes in many forms, each with its own characteristics and technigues. While socialism provides benefits such as social fairness and equitable wealth distribution, it also has drawbacks such as poor cost calculation and market freedom. The significance and importance of socialist economic ideas varied between countries and historical settings,emphasizing the complexity of its application and interpretation.  Unit 3 Modern Economic Thought Objectives 1. Determine the origins of economic philosophy in the modern era. 2. Compare and contrast Friedman. Frisch. and Fisher's theories. 3. Discuss the Pareto Principle. 4. Assess the influence of Feminist Economics. In current economic theory, and neoclassical economic classical concepts have given place to more complex and comprehensive perspectives. Alfred Marshall, who published "Principles of Economics" in 1890, broughttogether notions like supply and demand, marginal utility, and production costs. Frisch's pioneering use of computers in economic analysis paved the door for econometric modeling. and the Fisher equation examines the relationship between nominal and real interest rates when inflation is present. These economists, along with others, contributed to the theoretical framework for contemporary economic philosophy, which evolved in the aftermath of the "Great Depression." In Lesson 3 of Chapter 5, we will examine the content and applicability of modern economic ideas. Your excitement and commitment to grasping these theories are essential. Friedman's Consumption Function Friedman was Milton a well-known economist who advocated for free market ideas and monetarism. He campaigned for less government engagement in the economy and emphasized the value of individual liberty and choice. Friedman maintained that monetary policy is critical to economic stability and that governments should focus on maintaining a Steady money supply in order to avoid excessive inflation or deflation, He advocated for derequlation, free trade, and market-based solutions to economic problems. Friedman's theories continue to influence economic policy discussions, particularly those concerning monetary policy and the role of government in markets. Friedman's views have had far-reaching consequences, including:  i. The emphasis is on judging policies based on their outcomes rather than their goals. i. Promoting the importance of economic communication to the general population. ii. Asserting that inflation is caused mostly by monetary issues. iv. Arguing against technocratic economic governance. V. Recognizing that policy mistakes can be just as damaging, if not more so, than market failures. Frisch's Econometric Modelling Ragnar Frisch, a Norwegian economist, was a forerunner in the application of statistical methods to economic data. He stressed the use of mathematical techniques for empirical analysis to evaluate economic theories and draw policy conclusions based on evidence. His research focused on dynamic economic models and the integration of economic theory and real-world data. Frisch's works helped to lay the groundwork for current econometrics by incorporating quantitative tools into economic study. Frisch saw econometrics as havingthe ability to bring economics to the level of a scientific area of study. He did, however, express worries about its misuse and emphasized the importance of correct application to real-world problems. Toward the conclusion of his life, he proposed that econometrics be renamed "playometrics" if it was overused. Frisch also influential in the development of economic language, coining the phrases "microeconomics" to examine particular enterprises and industries and "macroeconomics" to investigate the whole economy. Throughout his career, he made substantial contributions to the Norwegian University of Oslo. The Fisher Effect Irving Fisherwas a well-known American economist who contributed to monetary conomics, pricing theory, and capital theory. He devised the "quantity theory of money"which connects changes in the money suppy to price changes. Fisher also popularized the term "debt deflation" and contributed to our knowledge of interest rates. His work has had a long lasting impact on economictheory and our knowledge of money and S  economic repercussions.The Fisher Effect, between nominal interest rates, inflation named link after him, proposes a expectations, and real ineieot rates. It states that when predicted inflation rises nominal interest rates rise proportionally,while real interest rates remain essentially stable. Ihe Fisher Effect basically states that changes in inflation expectations affeCt nominal interest rates but not real interest rates. The following main points summarize the Fisher Effect: 1. It is concerned with nominal interest rates. which are the rates disclosed and observed in financial markets. 2. It asserts that inflation expectations have a direct impact on nominal interest rates. Nominal interest rates tend to rise when inflation expectations grow. 3. Real interest rates remain generally steady or unaffected by changesin inflation expectations. 4. A proportional link exists between inflation expectations and i nominal interest rates. if rise by a specific inflation expectations percentage, nominal interest rates are projected to rise by the same percentage. Samuelson's Economic Analysis Paul Samuelson was an American economist who was the first to receive the Nobel Prize in Economic Sciences. He made substantial contributions to several fields of economics, particularly microeconomics. He is well-known for his contributions to the development of the foundation of moderneconomic analysis. He used mathematical. and statistical approaches in economics, assisting in the formalization of economic models and ideas. Samuelson's creation of the "neoclassical synthesis" which integrated Keynesian economicS with neoclassical theory, was one of his mostnoteworthy contributions. This synthesis was crucial in shaping modern macroeconomic phillosophy. "Economics: An Introductory Analysis," his popular textbook, introduced innumerable students to economic fundamentals and became extensively used in classrooms throughout the world. It contributed to the propagation of economic principles and made economics more accessible to a wider audience  Amartya Sen's Socio-Economic Theory a well-knOwn Indian economist and philosopher who ATartya Sen is and development contributions to welfare nade significant our understanding of oomlcs. He has contributed significantly to sianificance of human sklls in choice theory and the POvery, Social economic undermines conventional development. His method of focusing on individual assumptions by emphasizing the sianificance the capability method, which Well-being and freedom, Sen established ability to perform valuable assesses people's development based on their that in numerous areas of life, His inequality studies revealed TurncuonS income, but also by access to poverty should not be evaluated just by nportant resources and opportunities. He contended that eliminating for long-term equiues and supporting social fairness are essential growth. Sen has also investigated issues such as gender inequality, nature and numan rights,and famines, providing liaht on their multifaceted calling for policy measures to solve them. Pareto Principle economist and sociologist best Vilfredo Pareto was an Italian recognized for his contributions to welfare economics and the formulation of the Pareto efficiency concept. Pareto efficiency, also known as Pareto optimality, denotes a situation in which no individual can be made better off without causing someone else to be worse off. It denotes a resource allocation in which no more improvements may be made without negatively harming the well-being of others. He also created the concept of Pareto improvement, which occurs when a move benefits at least one person while causing no harm to others. Pareto improvements are desired because they boost total societal welfare. His research on wealth distribution and income inequality resulted in the invention of the Pareto principle, popularly known as the 80/20 rule. According to this theory, a big number of effects (80%)are often obtained from a small portion of causes (20%). Overall, Pareto's contributions to welfare economics and the concept of Pareto efficiency have left an indelible mark on economic research and policy formulation. His theories continue to have an impact on hOW we think about resource allocation, social welfare, and the relationship between individual well-being and societal outcomes.  Beyond Feminist Economics Feminist economics the study is of how gender and the econoriY interact. It calls into question standard economic analysis that excludes O diminishes the contributions of women. It focuses on the undervaluation or female labor, such as caregiving and domestic labor. According to feminist economists, these actions should be regarded as significant economiG contributions. They also investigate how gender influences labor division, highlighting inequities and the impact of structures such as patriarchy. Feminist economics seeks to include gender perspectives in research and policy, to correct gender biases, and to promote more inclusive and equitable economic systems. Dr. Nancy Folbre, an emeritus professor of economics at the University of Massachusetts Amherst, is widely regarded as a key proponent of feminist economic philosophy. Her vast research and articles on topics including as care employment, gender inequality, and the value of unpaid labor have had a significant impact on the area of feminist economics. Dr. Folbre's contributions have been critical in increasing our understanding of the economic consequences of gender and in advocating for policies that address gender gaps and promote social and economic justice. The Behavioral and GenderEconomic Lenses Behavioral economics and gender economics are two separate fields of research that look into how human behavior and gender influence economic decision-making. While there are some overlaps, each field has its own distinct focus and supporters. Behavioral economics is the study of how psychological and cognitive factors influence economic decisions and actions. It questions classical economics' premise of pure rationality and acknowledges the role of biases, heuristics, and social factors in decision making. Daniel Kahneman, Richard Thaler, and Cass Sunstein are among the most prominent supporters and contributors in this discipline. Gender economics, on the other hand, studies how gender influences economic outcomes as well as the unequal allocation of resources and opportunities among genders. It investigates gender differences in labo force participation, pay, and access to education and healthcare. Claudia Goldin. Marianne Bertrand, andEsther Duflo are prominent advocates and contributors in gender economics. It is critical to recognize that these domains are dynamic and ever-changing, with several scholars and Searchers making sianificant contributions. While the aforementioned Cnampions have made substantial contributions, many more scnolars ave dlsO contributed to the progress of behavioral economics and gender economics. History of Economic Thouaht: Then and Beyond ne ruture of economic thought historically provides the possibility for a major areas of inguiry and development. One critical component is the incorporation of Behavioral Fconomics, which incorporates cognitive Diases and sentiments into economic theories to provide a more realistic explanation of human behavior Another imnortant subfield is Sustainable and Environmental Economics. which emphasizes the importance of environmental considerations in economic decision-making and strives to establish a fairer and ecologicaly sensitive econorny. Furthermore, the Impact of Digital and Technological Transformations on employment, distribution, and productivity in a quickly changing digital landscape will most certainly be explored in the future of economicthought. Globalization and Economics International will remain important, with emphasis on understanding the dynamics of international trade, multinational firms, and global government. Inclusive Economics and Social Welfare will also be important, with a focus on reducing inequality and alleviating poverty through policy initiatives and social services. The evolutionof economic systems, including the rise of new models such as the sharing economy and alternative forms of economic organization, will be addressed. approaches to economic theory will also Interdisciplinary gain traction, embracing insights from subjects such as sociology, political science, and anthropology to create a more thorough understanding of economic processes and their societal repercussions, It is vital to stress that the future trajectory of economic thought is dependent on impending developments, since new challenges and rising trends will change economictheory and practice. Key Takeaway ldeas from both the classical and neoclassical eras of economic theory bave been incorporated into modern economic theories. These theories renresent improvements and advancements of eary economists' nrinciples.These principles have been adapted, reversed, or generalized Over time to fit the current economic context. Economists such as  Marshall, Frisch, Fisher, entributed signiticantly to Pareto, Samuelson, and others have the dynamic nature of Sen, a science. Throughout history, economics as an art ana their work has areas of economics, stimulating influencedtransdisciplinary varied social, interest and inspiration scholars economic, and political among backaroun