Final Exam Study Guide
Economy and Society (Spring 2008)
The exam will cover the following material:
Folbre: chapters: 1-2, 4-6, 8,
Sackrey, chapters: 5, 8
The broad themes of the latter half of the course have been a) labor and management relations in a capitalist society b) How decisions are made in the corporate and financial sectors c) Where should markets leave off and the public sector begin regarding education, health-care, child-raising and elder-care responsibilities?
There will be two sections similar to Exam 1, a section on terms and concepts and a section of short answer essay questions. I may include an opportunity to respond at length on a topic of your choice among a selection at the end of the exam. Here you may want to go back to your five papers and refine them for this part of the final exam. In all the written work, knowledge of the texts will be a significant component in the exam grade. Another component will be your ability to relate what you have read to your personal experiences. Briefly reviewing the on-line comment card web pages may help with some answers.
Terms and Concepts
Say's Law (Keynes' critique) Gender-based altruism and self-interested behavior
Classical Theory of General Equilibrium Problem of rising surplus (Baran & Sweezy)
Advertising as waste Adam Smith's trickle down theory
Keynes Equilibrium Theory (savings = investment) Government absorption of surplus (military Keynesianism)
Jane Manbridge's "ecological niches" for altruistic behavior
Keynes' solution to disequilibrium (G spending) The "ultimatum game"
Effect of having children on men's versus women's pay
The Dependence Effect Free market ideology
Price competition vs Product Differentiation Liberal feminism versus Social Feminism
Nice Person's Dilemma
Portfolio of Caregivers versus single person (mother, father)
External Benefit (spillover effects or externalities) The Care Penalty (glass ceiling) -- weak bargaining positioning
Economies of Scale Perverse incentives, crowding out and rent seeking
Monopoly capital practices Temporary Assist. for Needy Families
Results of the class work survey Voucher system
The Bretton Woods Agreement Conventional economist's rationale for low pay of caregivers
The altruistic gene Analysis of "good jobs" versus "bad jobs" survey. (also gender differences)
Issues of "buying care" for children and the elderly Consolidations (mergers and acquisitions)
Government absorption of surplus (military Keynesianism) Positive spillovers (positive externalities) from caregiving (children)
Outsourcing and virtual outsourcing Patriarchal society(women as caregivers) versus market-based caregiving
Employment practices of the Maquila factories Immigrant agricultural workers versus immigrant nannies
Thomas Malthus' view of the poor Impact of reducing barriers to trade and foreign investment on human and labor rights, Env.
Effect of Maine's law on plant closing notices Parent who gives up career to raise children versus nation that provides signif. social asst.
Parenting subsidizes employers Jihad versus McWorld (religious fundamentalism versus laissz faire and consumer sovereignty)
1980 study of child support payments Why gov. behan to cede child custody rights to women after 19th c.
Why women were discouraged from entering the labor markets (kinds of restrictions) and why they eventually entered in significant numbers beginning in the 20th century.
Social Security for Mrs. Earn-a-Salary versus Mrs. Stay-at-Home.
Some Interesting Questions
1. Folbre writes, "Altruistic genes, it seems, suffer a competitive disadvantage." What does she mean and does this mean that government should enforce reciprocity? Is there a problem here that needs a solution? If so, what's your solution? [Much further on in chapter 8, Folbre extends this competitive disadvantage even to nations regarding the use of social welfare policies].
2. "Unfortunately [Folbre writes], the more women in an occupation, all else being equal, the lower the pay." Why is this? Should something be done about it? What?
3. "We are moving from a system providing care for children, the sick, and the elderly primarily through the family to a system that relies to a large extent on purchased care." Why is this happening and what are the implications for society?
4. "Parents can ask for reciprocity from their children but not from all those who have benefited from their capabilities." What does Folbre mean by this and what are its implications for social policy?
5. Thomas Malthus, a 19th century economist, argued that "...providing assistance to the poor would just encourage them to breed." Was he right? If so, should we end all public assistance programs?
6. Folbre argues that it was capitalism that ended the family as we knew it (a care-giving institution), while conservatives argue that feminism, welfare programs, and the perverse incentives and rent-seeking that attended those phenomena that are to blame. Sort out these different perspectives.
7. Many states have been sued for the consequences of the use of the property tax to finance public education. What is the issue here?
8. "...higher education is an end in itself. Everyone deserves it, regardless of his or her aspirations." Comment.
9. Michael Moore once asked "Why doesn't General Motors sell cocaine?" What point was he trying to make?
10. Why wouldn't the ideas expressed in Folbre's depiction of the fictitious island nation of Corporanation work?
11. What do the Child Labor Deterrence Act of 1995 and efforts by the U.S. to ban imports of tuna from Mexico have in common and what has been the general cause of these recent phenomena?
12. Folbre argues that to fight the Jihad we must resist McWorld. What does she mean by this? How are they linked?
13. The Chicago School Theory argues that "...corporate takeover battles ... are simply rival teams of managers competing for the right to operate corporate assets." Explain the quote and take a position on whether this is no different than any market where buyers and sellers come together to make a transaction.
14. Bill Gates has argued that Microsoft has consistently lowered prices on its Windows operating system and its software products so it should not be prosecuted for monopoly practices. Evaluate Gates' argument. Comment on recent rulings in Europe against Microsoft.
15 Those who argue against government regulation of the market system often cite the power of price fluctuations as a disciplinary mechanism to force firms to be efficient or be driven from the market by rival firms. Sackrey and Schneider cite examples of price leadership and "tacit price collusion" as counter arguments. Explain.
17. Baran and Sweezy (authors of Monopoly Capital) claimed that forces were at work to constantly cause the surplus to rise. What did they mean and how was this to take place?
18. This rising surplus would create a problem for corporations (the problem of surplus absorption) because the number of profitable investment opportunities would eventually dry up. What would the surplus be used for? How can the behavior of corporations in this regard be characterized as irrational?
19. "...if the demand for child care workers goes up, the pay will also go up." (Folbre 46) Comment.