KEYNESIAN & MARXIAN SYSTEMS

IN CONTRAST TO THE LIBERAL SYSTEM

1. Property

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2. Socioeconomic systems

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3. Distributional outcomes

THREE THEMES

THREE THEMES

1. Property

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2. Socioeconomic systems

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3. Distributional outcomes

THREE THEMES

THREE THEMES

1. Adam Smith’s construction of�commercial society

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2. Keynesian & Marxian systems �in contrast to the Liberal system

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3. Political institutions and�“The Rise of the West”

Adam

Smith

(1723--

1790)

Karl

Marx

(1818--

1883)

Keynes

ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN

ECONOMIC POSSIBILITIES

FOR OUR GRANDCHILDREN

WHAT COUNTRY IS THIS?

● Life expectancy is �● less than 50 years

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● 1 out every 10 infants dies �● before the age of one

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● More than 90% of households have no�● electricity, refrigerator, telephone, or car

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● Fewer than 10% of adults have�● completed high school

USA 1890

● Life expectancy is �● less than 50 years

​

● 1 out every 10 infants dies �● before the age of one

​

● More than 90% of households have no�● electricity, refrigerator, telephone, or car

​

● Fewer than 10% of adults have�● completed high school

USA TODAY

● Almost all households have electricity, refrigerators, cell phones, and cars

​

● Overwhelming majority graduates �from high school, many from college

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● New goods: air-conditioning, dishwashers, �jet planes, skyscrapers, smartphones, etc.

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● Health: Life expectancy today is ~80 years

Nathan Rothschild

One of the richest �men in the world �in the mid 1800s

died from an infection that $10 of antibiotics would cure today

ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN

ECONOMIC POSSIBILITIES

FOR OUR GRANDCHILDREN

​

Hayek

(1899--1992)

​

Hayek

(1966-- )

INDIVIDUALISM:

TRUE & FALSE

INDIVIDUALISM:

TRUE FALSE

“FREE” ENTERPRISE

COMPETITIVE ORDER

&

“FREE” ENTERPRISE

COMPETITIVE ORDER

NOT ORDERED COMPETITION

&

Milton

Friedman

KEYNESIAN & MARXIAN SYSTEMS

IN CONTRAST TO THE LIBERAL SYSTEM

Thorstein

Veblen

(1857--1929)

conspicuous consumption