Please I want you to write about two questions in the form of text, and each answer should have 1000 words, cited, double space.
#Q1: Discuss deindustrialization and its consequences
and the relationship between deindustrialization and the emergence of local economic
development planning. Your answer should be comprehensive by integrating information from the readings, and lectures.
There are 3 files to answer this question and use only these sources (these sources about the Emergence of Local Economic Development Planning)
#Q2: How and why do free markets often not work the
way they are supposed to (i.e., market failures)? Provide some examples. Your answer should be comprehensive by integrating information from the readings, and lecture.
There are 4 files to answer this question and use only these sources (these sources about Capitalist Markets and the Concept of Market Failures)
THE CAPITALIST MARKET: HOW IT ACTUALLY WORKS
Final draft, August 2009
In the last chapter we examined the central virtues of capitalism as seen by its defenders
and the basic way capitalism is supposed to work. Six points were especially salient:
â€¢ Capitalist markets are an expression of the value of individual freedom,
organized around voluntary exchange between people; no one is forced by
anyone to engage in any particular exchange.
â€¢ Free markets are an extremely effective mechanism for coordinating complex
â€¢ Markets accomplish this remarkable result through supply, demand and the
â€¢ Free markets result in allocative efficiency: after all the trading is done, the
allocation of things is â€œpareto optimalâ€ â€“ no one can be made better off
without someone being made worse off.
â€¢ Capitalist Markets create incentives for risk-taking and innovation and thus
capitalism is an engine of economic growth.
â€¢ State regulations of capitalist firms and markets interferes with the free market
and undermines these virtues.
This is how capitalism is supposed to work. Now letâ€™s look at some of the problems and
dilemmas of markets and capitalism. We will begin by examining the moral argument for
capitalism and freedom and then turn to a range of problems with the pragmatic defense
of free markets. The chapter will conclude with a discussion of how intensely competitive
capitalist markets can undermine a range of social values outside of the economy itself.
I. The moral argument: How well do capitalist markets advance the value of human
Individual freedom is a terribly important value, and it is a tremendous historical
achievement that individual freedom has become a core value of our culture. Historically
this value emerged and was strengthened, if unevenly, by the spread of market relations,
and a good case can be made that capitalist development has further promoted this value.
Nevertheless, capitalist markets really only affirm a very limited notion of freedom, and
in certain important respects constitute an obstacle to the fuller realization of this value.
To understand this we must look more closely at the idea of individual freedom.
There are two sides to the idea of freedom, sometimes referred to as â€œnegative freedomâ€
and â€œpositive freedomâ€. Capitalism and markets have an ambiguous relationship to both
of these faces of freedom.
Chapter 4. The Market: how it actually works
Negative freedom means freedom from coercion. Individuals have negative freedom
when no one directly commands them to do things against their will. Individuals have
autonomy to direct their own actions unless they voluntarily agree to follow the orders of
someone else. A â€œcontractâ€ em
Date and Time: Saturday, December 11, 2021 11:12:00 PM EST
Job Number: 159709310
1. “Fake Capitalism”
Search Terms: Itâ€™s not free markets that have failed us but government distortion of them
Search Type: Natural Language
Content Type Narrowed by
News Sources: City Journal; All Content Types: News
Copyright 2016 The Manhattan Institute d.b.a. City Journal
Section: Pg. 90-95; Vol. 26; No. 4
Length: 3133 words
Byline: Nicole Gelinas
Itâ€™s not free markets that have failed us but government distortion of them.
Free-market capitalism is out of favor. In the New York Times Magazine, economist Joseph Stiglitz, who helped
create the World Trade Organization as an advisor to President Bill Clinton, pronounced the â€œexperimentâ€ of the
â€œmarket economyâ€ over the past 30 years a failure, and many Democrats agree. But itâ€™s not just the Democrats
whoâ€™ve shifted from a pro-market stance. Republican voters supporting Donald Trump share similar misgivings. And
the sentiment is global.
At the September G20 meeting, Australiaâ€™s prime minister, Malcolm Turnbull, a former Goldman Sachs banker,
exhorted fellow leaders to â€œcivilize capitalism.â€ Before America and the rest of the West declare free-market
capitalism the culprit for our recent economic woes, however, we should ask ourselves: How much capitalism does
the West really have, and is it really behind the Westâ€™s problems? Letâ€™s not worsen those problems by confusing our
failure to understandâ€”and practiceâ€”free-market capitalism with the thing itself. What is free-market capitalism?
Allan Meltzer, an economist at Carnegie Mellon, a Hoover Institution scholar, and onetime advisor to Presid
- Five Crucial Market Failures:
- 1) Information failures
- 2) Negative externalities
- 3) Short time horizons
- 4) Under-provision of public goods
- 5) Concentration of economic power
1) Information Failures
Markets allocate resources efficiently if consumers have perfect information about products. However, firms have incentives to distort information.
- Example: False advertising & product safety â€“ The Case of the Ford Pinto
The Case of the Ford Pinto (late 1960s)
The problem: because of faulty placement of gas tanks, tendency for cars to explode in some rear-end collisions
Cost of change: roughly $11/car
Fordâ€™s calculation: even considering the costs of settling law suits for approximately 180 deaths/year due to exploding Pintos, it was more profitable not to make the change.
Fordâ€™s strategy: a) Hide information and deny there was a problem; b) delay things in court and try to overwhelm plaintiffs in court cases; c) use their economic and political power to first block legislation and then block effective implementation of stricter safety regulations;
Results: the legislation to require higher safety standards was delayed from 1961 to 1966 and effective implementation of regulations delayed until 1977. Hundreds of lives lost as a result.
Example: Auto Safety
—-Ford Pinto in 1970s
—-road stability of SUVs in 1990s
—-ignition switch failures in 2000s
-Ford did the math: the safety improvement would cost $11 per car and save roughly 180 lives per year. The retrofit would cost about 137 million. How much was a life worth? Ford calculated this figure on the basis of likely court costs for passenger deaths at the time and came up with an estimated $200,000 per death. After doing the math, Ford decided it was not worth making the safety change. Moreover, by fighting the court cases, insisting that these fiery deaths were due to driver error, and resisting legislative regulation-Ford could further minimize the costs of the safety problem by delaying remedies.
- 2) Negative Externalities
- Market efficiency depends on prices reflecting the true costs of producing things. However, firms often displace costs on others.
Example â€“ Environmental Pollution. It is cheaper for a factory to discharge pollutants into a river or the air than to dispose of them in a responsible way.
Example â€“ A Comp
We are talking primarily about the 1970s & 1980s
Refers to the loss of the manufacturing base of the U.S. economy
- ON PAGE FOUR WHEN IT SAYS BUSINESSES IN CALIFORNIA WERE MOVING AWAY OR ABROAD BECAUSE THEY WERE NOT PROFITABLE â€œENOUGH,â€ WHAT IS CONSIDERED A PROPER PROFIT? IF THERE WAS A PROPER PROFIT WOULD IT BE FOR THE WORKERS OR CORPORATE THAT ARE BENEFITING FROM THIS?
- WHAT ARE THE CORPORATE GIANTS GAINING BY MOVING OPERATIONS OFFSHORE?
- LESTER THUROW BELIEVES WE NEED TO DISINVEST MORE RAPIDLY. WHY WOULD THAT HELP AMERICA COMPETE MORE EFFECTIVELY ON THE INTERNATIONAL MARKETPLACE? O (MOVE FACTORY ELSEWHERE)
- WHAT SEEMS TO BE THE MOST EFFECTIVE METHOD FOR SHIFTING CAPITAL?
Abandoned Auto Plant, Detroit
GENERAL MOTORS PLANT, VAN NUYS
LOS ANGELES TIMES: â€œL.A. MAKES ITS LAST CAR : END OF ROAD FOR GM’S VAN NUYS PLANT: AFTER 45 YEARS AND 6.3 MILLION VEHICLES, THE FACILITY IS SHUT DOWN. IT MARKS THE END OF CAR MAKING IN SOUTHERN CALIFORNIAâ€ (AUGUST, 1992)
RISE OF LOCAL ECONOMIC DEVELOPMENT PLANNING
|City or county revenue bond financing||28||43||50|
|State loans for building construction||11||15||30|
|State loan guarantees for building construction||11||14||20|
|City or county loan guarantees for||1||0||7|
|State aid for existing plant expansion||14||27||37|
|Local tax exemption or moratorium on||11||21||32|
|land or capital improvements|
|State tax exemption to encourage R&D||3||7||19|
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