Semester 2, Seminar 1

Despite the fact that I still don't understand economics this seminar was really interesting and we got into a good discussion about our reading; The New Industrial State by John Kenneth Galbraith.

These are the notes I made after reading chapter 7 'The Corporation' and doing some research.

• The United States is no longer a free-enterprise, Galbraith believes that the state is controlled and structured by large corporations.
• Advertising is the means by which these companies manage demand and create consumer 'need'.
• The goal of these corporations is not to better society but to gain the highest earnings.

• The corporation's purpose is to do business - they use capital from several other persons as this allows them to undertake tasks beyond the financial reach of any single person.
• Persons who share capital with larger corporations are given an element of power. It ensures them a vote on significant affairs and defines responsibilities.

Jenni wrote her seminar paper on the book, here are the notes I made from her paper and our discussion afterwards:

• Corporate leaders control everything
• A techno-structure is a group of specialised workers
• Corporations are soul-less unlike individuals
• Larger companies can ask small businesses to match their prices or lose their jobs!
• Competition is good

There are three parts to a successful company:

1. Machines/technology should replace workers
2. People are needed who understand the technology so that it works
3. Co-ordination and communication is needed between specialists to find out whether every one's skills are relevant, if they're not then they are fired (not needed)

We discussed how parts one and two contrast each other. First Galbraith says that the machines should replace the workers (one machine is better than ten workers) but then he continues to say that however people are needed to ensure that the machines work! Does he want people or not!?
Although I do suppose having people there to work the machines does not mean you have to have ten of them - it would still work with one which does mean that he is eliminating the nine workers not needed.

The goals of a corporate company is most importantly to survive - to have security. Security becomes before growth and profit.

Large companies and the Government decide for us through advertising (the bigger the company the more power) - small companies are not counted. They're often so small in comparison to the large companies that they cannot afford to change the market - only survive in it.

We finished the seminar talking about the control that large companies have over society and how they also have a huge influence on the media. I do not think it's fair that large companies have so much control and do not think about the affect their having on individuals. Recently I heard the saying that if big corporate companies stay with individuals through the lean times, you will be remembered in better economic times. I think this is a good ideal - to stick with your customers through tough times.

Semester 2, Lecture 1 - Economics and Keynesianism

Well here we are again, another semester, another lecture and another confused Claire.

Our first lecture was about classical economics and Keynesian theory. Need I say more?!

I'm going to be very honest and say that I was and still am completely baffled by the lecture...but here are the notes that I made along with some notes that I made after reading Bry's blog (it's very helpful!)

One thing (I'm not too sure what it directly relates to) which stood out from what Chris said was that "there is one thing money cannot buy; poverty".

Classical economics is closely linked with Utilitarian ideas. To illustrate these Chris used two examples. The first was that a train carrying hundreds of people was doomed to crash unless a lever was pulled. But if this was pulled a blind and deaf man in front of the train would surely be killed. Who do you choose to save?
The second was about the NHS choosing who to give treatment to, a tiny baby or an elderly person - who would gain the most from being saved. His exact words were in fact 'you're in the hospital, a baby is going to die. SHIT! give in an injection. (He does give the lecture a bit of pazaz and humour!)

Adam Smith was a mechanistic economist and believed that people respond to stimuli - pleasure and displeasure. He said that people were easy to read from their utility (their amount of pain and pleasure) and that people were of course more likely to seek out pleasure and not pain. Seeking out pleasure maximises our utility.

Smith believed in Free Trade as it stimulated economic growth and prosperity.

Jeremy Bentham's Hedonism theory also says that human beings seek out pleasure rather than pain, so to maximise their utility.

J.S.Mill saw utility as an actual thing that could be measured by price.

Malthus "iron law on population." He argued that population was the main cause of change.

Marx argues that the free market constantly impoverished people that work for wages because the Iron Law on wages mean that the working class will never get out of poverty.

Marshal spoke about 'loose money'. This was were more money would be printed and circulated, creating more liquidity. He did not understand that money had an actual effect on people.

The History of Money

• Money is a way of exchange
• It allows trade to occur
• Before 1844 there were no money notes, only gold sovereigns
• Later on bank notes were issued by English banks - they realised that they could issue more notes than they had in gold sovereign because *hopefully* no-one would cash in their notes at the same time!

Interest rate is the price of money.
It is set by the Government issuing bonds, the more bonds the higher the interest rates!

I'm still unsure about what the Keynesian Theory is...so I'll have to do some more research and come back to this but Bryony does make some good points about the problems with the theory so check those out!

For now ta ta.

[Image from Google Images]