Political Science 2211E Lecture Notes - Pigovian Tax, Keynesian Economics, Market Failure
20 Mar 2014
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Document Summary
Obama is criticizing romney"s neoliberal, trickle-down economy plan. Trickle down: if you benefit wealthy people, benefits will trickle down to the middle class. Origins of the keynesian-welfare approach (welfare economics/keynesian economics) When free markets don"t work the way they"re supposed to. Creates a problem that free market won"t fix on its own. Something breaks down and the market is not working properly. In keynesian"s view, the free market is not quite perfect and it is trying to correct that failure. Using government intervention to make markets more efficient. Even if free markets are working the way they are supposed to be, they could lead to outcomes that are socially undesirable. Keynesian: fairness, fair trade, fair competition, social justice. Focus on producers and consumers and individual products. About welfare of society as a whole, nor welfare programs. Market system was most efficient but subject to failures. Produce a lot of pollution (cost to clean up pollution is not taken into account)
