POLI 211 Lecture Notes - Planned Economy
12 Dec 2012
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Document Summary
Aiming to achieve economic parity of the west via industrialization and mechanization of agriculture and employment of technology. Targets: quotas of how much they wanted to produce, problems with corruption. Hard: if you cannot cover your costs and are not making a profit your business will fail. Soft: if you cannot cover your costs the government will bail you out. When the us decided to bail out the auto industry it was a big deal because it was too big to fail. Capitalist ideology (weed out failing businesses to promote a healthy economy), opposite from communism. Soft constraint problems: lack of incentive to be competitive, where does the money come from. Profits are not the most important thing, no relation between price and quality. Capitalist system has supply and demand with competitive markets, price and quality are correlated socialist paternalism: One should put trust in the state.
