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- Ancient Economics
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-palace or temple economy; independent merchants
-royalty/religion play huge role - Aseria
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-first time word for merchant seen
-introduce first type of currancy
-traders independent of royalty/religion - King Sargon
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-late 3rd centruy
merchants appeled to king to open trade routes
-merchants pay if king asks - Sumer
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-oldest record of beer
-record of indepedent financing
-alot of evidence of commercial activity - Old babaloninan period
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-non-royal trading
-code of hammurabi gives set prices
-little evidence of commercial trading after - Hittite Anatolia
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-new laws to protect merchant
-alot of migratory commerce
-heavy trade by sea ( crete anatolia) - Royal Edict
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sent ot nearby knigdoms stating thatforiegn debters failing to pay hihhite merchants are slaves to those merchants
-ensures compensation - Isreal
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nation(migratory tribe)
isreal proper (formal kingdom) - Isreal Proper now
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2 merchant classes
1. serve palace, operate for kingdom dont pay tax
2.pay taxes - Ancient Egypt (early period)
- all trade comes from palace, most is royal, rare trade by sea
- Aniceitn Egypt (middle period)
- sea trade grows, not through palace but indepently, see developement of independent merchant class
- Ancient Egypt (late period)
- long distance sea trade, tech allows to sail farther w/ more good
- Mycenan Crete and Mainland Greece
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-last holdout for redistributional economy
-epitomy of palace economy
-"commison economy" emerged - Commision Economy
- activities undertaken for a prize
- Lydia
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-first record of coinage
-value garanteened through quality not quanity
-use of presious metals to gaurantee value
standardized with spread of roman empire - latifundia
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-large estates
-begins in Italy and Sicly
-not good becuase land held by upper class
-created big export ag. economy - Pliny the elder
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-wrote on latifundia
-latifundia funded Italy, will ruin all provinces, at one time 6 owners possessed 1/2 roman province of africa - Pliny the younger
- slaves dont have interest in the land; just observed
- Latin AMerican latifundia
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few land holdres, lots of migratory workers, introduciton fo day worker
-still strong in Mexico, Chile, Venezula, and Argentina - Neoclassical economics
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-commodities get to consumer and state have better relationship
-trade was for enriching the state not the individual - adam smith
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wrote "Wealth of Nations"
gave us idea of free trade - David Ricardo
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-made observation about trade between Protugal and Britian
-created "Comparative Advantage"
-tied commodity to labor required for production
-Portugal has advantage becuase they produce in less time
-says labor's contribution ends at consumption - Problems w/ Rociardos thoery
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-quality isnt accounted for
-resource availablity
-trade isnt typically bilateral
-value is bassed on labor that goes into product - Comparative Advantage
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-use advantage of one state for another
-holds as the basis for Neoclassical economics - Keynesian theory of employment
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-calculation of state wealth
y=c+I+G+x
-y is constant, g is variable, gov spend according to flucuation and consumer index and investments - consumption index
- -at a certain point labor is no longer translated into consumable currancy
- socialism
- greatest good for greatest number of people, let few suffer so that many dont have to
- socialism economy
- taxation of large enough scale so that redistribution of assets means greatest # benifiting
- communism
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-tax action is total and complete 100%
-fully redistributive (no individual accumlation of wealth)
-not based on labor or capability - MARX
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-argued that human behavior is product of economic system
-we become competitive when economic situation demands it of us - Engels
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-supports Marx
-cooperation is more important than competition
-betterment of society comes from cooperative economic system - "Third Way" idea
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blends socialist goals w/ free market economy, is redistributive
-limit acculation of wealth at highest level
-creates: free market, strong, large middle class, lower class exists
(1.capitalism 2.socialism,3.third - US
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predominate neoclassicla economic
-has freest market in world - China
- fully socialist or "third way"
- 3 functions/problem of economy
- unemployment, inflation, stagnation
- labor
- resource that has varying amounts of value, exists in varying quantitties and is highly fluid
- use of resources
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used efficiently when they are devoted to thier most important/ productive uses
-efficiency is more difficult to pinpoint than inefficinecy
-labor is resource most likely to go unused - concept of unemployment
- -an instance of failure to use labor, labor is being under used
- Neo-classist view of unemployment
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*there is NO under use of a resource
this idea confues its role in the market - Keynesian view of unemployment
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-excess supply of labor resulting from failureof coodination in the market economy
Market=(W+L)+Wu - Classical view of unemployment
- -it is a job search, people engaged in looking for a better match between skills and job
- Thomas malthus
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-related pop growth to resources
-created first theroy of unemployment
-"when he is looking for work, willing to work at prevailing wage butg is unable to find a job" - Registration
- -register to be unemployed, our best overall guess
- Bias 1 created by registration
- people willing to work at wage but have given up looking for becuase they cant find and dont expect to find a job (seen in US)
- Bias 2 created by regisrtation
- person not really willing to work (seen in Europe)