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Related Words, Beliefs, Background for Choice #35

Worldview Theme #19B: Corporate Capitalism              Worldview Theme #49A: Social Welfare Statism

for a summary read these 5 entries in order: corporation, corporate state, corporate welfare, shareholders vs. stakeholders, corporate executive pay issues

for a summary read these 5 entries in order: socialism vs. social welfare statism, social safety net, welfare assistance,
government involvement in a market economy,
public sector / public goods

Atlas Shrugged--Ayn Rand's epic 1000 page plus 1950s novel that celebrates her philosophy, out of which grew the modern libertarian movement. The book’s title refers to the industrial giants who rebel against continuing to do all they had done to support modern society. Its climax involves “John Galt” speaking as follows, "This countrythe product of reasoncould not survive on the morality of sacrifice.  It was not built by men who sought self-immolation or by men who sought handouts...You let them infect you with the worship of needand this country became a giant in body with a mooching midget in place of its soul, while its living soul was driven underground to labor and feed you in silence...We will rebuild America's system on the moral premise which had been its foundation...the premise that man is an end in himself, not the means to the ends of others, that man's life, his freedom, his happiness are his by inalienable right."        

bureaucracyrefers to the (typically non-elected) administrative staff of a government or large organization who make sure that laws/ rules are followed,  policies are carried out per higher level agreement, paperwork is completed, etc..  Bureaucracies are often organized in hierarchical fashion to promote efficiency. Critics charge they are part of a “machine” in which those who value individual freedom are trapped like “cogs.”  Anarchists and others prefer less centralized /less hierarchical structures. 

capital -- an economics term referring to accumulated goods and resources (or their value) devoted to the production of other goods or set aside to produce income. Capital can take the form of money, raw materials, buildings, equipment, inventories, etc. While economists have long distinguished between “physical capital” and “human capital”, some have recently extended this scheme to include “natural capital”.

capitalism -- an economic system involving 1) private individual or corporate ownership of capital goods, 2) private rather than state control of investment , and 3) pricing, production and distribution of goods (for the most part) by agents or forces operating within the free market system.

centralized--not spread out or diffused but rather concentrated at one location or under the control of a single agency or entity; see also next entry 

centralized vs. decentralized ways to govern--using the USA as an example, some power is centralized at the federal level in Washington DC with president and Congress, some is distributed to rest with 50 state governments. Likewise at state levels, some power is centralized in the  governor and state legislature, some is much more decentralized in that the decisions of various city and county governments within the state--acting through mayors, city councils, county boards of supervisors, etc--may more meaningfully affect people's lives. Within big corporations, power can likewise rest predominately with CEO and corporate board, or can be spread out to value the voices of employees and even investors.  

collusion -- a secret agreement between businesses or firms that sets price and output in a way that decreases competition and increases profits.

commodification—the transformation of goods, services, information, ideas, nature--even public resources like water or seemingly private human body parts like a woman’s womb --into something that can be bought and sold like any commodity

competition (or anti-trust) law—laws that promote fair trade practices, and promote / maintain competition in a particular market by regulating corporate conduct, breaking up monopolies, etc.

consumer protection—government regulation which protects consumers both from health and safety dangers that products or services might pose and from unfair business practices such as fraud, misrepresentation and collusion.

consumer protection movement–involves consumers demanding certain rights and legal protection as they consume goods and services.  Beginning in the mid-1950s in the United States, by 1962 President Kennedy identified certain rights (such as the rights to safe products, and to file complaints, etc) that latter, when expanded, came to be known as The Consumer Bill of Rights.  Parts of it have since become law.  By 1985 the United Nations embraced consumer rights and identified eight basic rights.  A USA government milestone came in 2011 with the establishment of The Consumer Financial Protection Bureau.                        

corporation--created to conduct business as a single legal entity, with rights and duties.  For the self employed, incorporating has advantages–notably owners are generally not personally liable for corporate debts or activities.  Corporations,  upon issuing shares of stock, are owned by shareholders–ranging in number from a handful (for closely held ventures) to thousands (for publicly held ones). The corporation is the key organization unit of modern capitalist economies.  Many argue that because corporations are not persons (with moral responsibilities) they cannot be criticized in moral terms. 

corporate crime–corporations and/or their employees break laws and use their power to ruin lives, endanger public safety, or pollute the environment in their quest for profits.  Its negative impact on US society is great.  In 2008, Russell Mokhiber, founder of the Corporate Crime Reporter, wrote "The losses from a handful of major corporate frauds–Tyco, Adelphia, Worldcom, Enron–swamp the losses from all street robberies and burglaries combined.  Health care fraud alone costs Americans $100 billion to $400 billion a year.  The savings and loan fraud...cost us anywhere from $300 billion to $500 billion..." Of political campaign contri-butions & lobbyists, Mokhiber wrote, "Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live." 2009 brought news of Bernie Madoff's corrupt investment firmthought to have ripped off $50 to $65 billion, and concerns about ripoff of government furnished bank bailout funds. The 2010s began with the continuing  painkiller drug addiction --what one writer referred to as “Pharma and the Poisoning of America”--and speculation as to whether any corporate executives would go to jail over the “sub-prime mortgage crisis” which triggered the “Great Recession” in 2008 (none did). The decade brought a number of major scandals, with these ten ranked the worst by the Wall Street Journal: 1) the BP Deepwater Horizon oil spill; 2) Foxconn suicides; 3) Liber scandal; 4) FIFA corruption scandal; 5) Volkswagen emissions cheating; 6) Turing Pharmaceutical HIV drug price gouging; 7) Theranos; 8) Fyre Festival; 9) Mossack Fonseca and the Panama Papers; 10) Wells Fargo account fraud.

corporate executive pay issues–according to many observers of top U.S. companies, the ratio of top corporate executive compensation to that of an ordinary private sector worker is outrageously large.  Based on figures compiled by the Institute for Policy Studies, in 2019, a typical worker at one of the top 50 (in terms of pay gaps) publicly traded American companies would have to work at least 1000 years to earn what the company’s CEO earned in one year.  Average annual pay at these firms was $15.9 million,  whereas that same year median worker pay was $10,027.  While some feel all such high corporate executive compensation is unjustified, many single out the outrageously high salaries, bonuses, and severance pay packages of executives who led companies which performed poorly for special ridicule.     

corporate statea term used by those who believe that government and large corporations are run by the same people and are so intermeshed that government and corporate goals / policy are essentially the same.

corporate welfare--refers to government support--what critics might call "handouts"--provided to private corporations in the form of subsidies, tax breaks / credits, and laws / benefits / exemptions by which private sector businesses in some way use the public sector (taxpayer dollars, public land, etc.) to their advantage. 

economic efficiency -- may refer to either minimizing costs while maximizing production or wisely allocating consumption related expenditures to maximize consumer satisfaction

economy of scale—a cost advantage achieved by producing more, typically due to decreased cost per unit  with increasing output

eminent domain, expropriation, etc.--refers to the right of a government to purchase or take private land for public use.  The right is sometimes invoked in building highways, utility distribution lines, etc.

government, branches of--in western democratic and other governments there typically are three: 1) the legislative, which often consists of elected representatives who make laws, 2) the executive, often including the head of the government, is responsible for enforcing laws and the daily functioning / administration of the state, 3) the judicial, typically consisting of courts, judges, etc., interprets the law and administers justice.  Ideally, a separation of powers gives each branch independence, while providing checks and balances against abuse. 

government inefficiency–an umbrella term that refers to government failings to efficiently carry out its mission / social programs.  Waste of taxpayer money is a typical manifestation; fraud / corruption are extreme ones.    

government involvement in a market economy, indicators of -- There are three areas in which to assess a national government’s involvement and interference in a market economy: 1) by the proportion of GNP that the government directly purchases or produces; 2) by examination of the extent to which the government redistributes income, typically by levying income taxes on most, and making transfer payments to others (such as welfare checks, social security payments, unemployment benefits, for medical costs, etc); 3) by examination of the extent to which the government regulates and supervises many things directly connected with economic life (business, commerce, workplace safety, etc) and others indirectly (travel, entertainment, health, education, science & technology, etc).

guaranteed minimum income—a guaranteed monthly payment to citizens, typically as part of a government based social welfare system. In some cases the amount may be sufficient for people to live on. If it is part of a poverty reduction program, an individual or family may qualify to receive this income only after certain means tests  have been applied—such as need, willingness to receive education, training, enter the labor market, or perform community service.

health care costs--in the United States topped $3.6 trillion in 2018, or over $11,170 per resident per year--altogether representing 17.7% of the GDP. This latter figure is the highest of any nation in the world; for comparison Canada, which has a publicly funded health care system, spends 9% of its GDP on health costs.   

health insurance-- protection against hospital and medical care expenses (and sometimes lost income) due to an illness, injury, or accident.  In countries with publicly funded health care systems or related social welfare programs, it is provided free or inexpensively by the government. Elsewhere it can be obtained from private insurance companies. In 2020, private health insurance premiums cost the average U.S. family $13,824; based on 2018 data, 28.6 million people (representing 8.9%)  were uninsured.

homelessness—a social condition characterized by lack of adequate housing and regular places to sleep, and dramatized by pictures of poor people in otherwise affluent western countries—with all their belongings in shopping carts--sleeping in public parks or under highway overpasses.  Causes of homelessness include poverty, unemployment, lack of affordable housing, mental illness, substance abuse, domestic violence, etc.  Estimates put the number of homeless in the United States in the 150,000 to two million range, in Europe around three million, and in the developing world in the hundreds of millions

human capital -- investment made in people, including improving their productive capabilities and health due to investments in job training, education or medical care.

labor union–an organization of workers whose purpose is to promote and advance its members’ interests with respect to wages, benefits, and working conditions.  The power of organized labor in America peaked in the mid 1950s when 31% of the work force belonged to either a craft or industrial labor union.  By 2019 it had declined in America such that only 10.3 % belonged to unions, although in Canada (30%) and some Western European countries it was relatively stronger.  

laissez-faire -- refers to free market capitalism being left alone to operate without government interference.

law: private vs. public--the former involves relationships between individuals (including corporations), the latter with issues involving the state and welfare of society (including penal law, and regulatory statutes, etc.)

leveling mechanisms--customs and social policies that serve to reduce differences in wealth between members of a society. 

liability--obligation that most be honored,  debt that must be paid, or other legally-binding responsibilities based on contractual or other agreements

lobbyist–a person paid to act on behalf of a particular corporation, union, organization, etc. in aggressively promoting their agenda to elected representatives or those in positions of power in governments.  In some democracies (USA), lobbyists funnel campaign contributions to politicians–subverting the will of the people critics charge

macroeconomics -- the branch of economics which involves relationships between broad economic aggregates, such as national income, employment, money supply, etc. To be contrasted with microeconomics

marginal propensity to consume -- in the economic theory behind consumer spending and disposable income, this term is defined as the fraction of an extra dollar of income that goes to purchase consumer goods.

marginal utility -- the added satisfaction to be had by consuming an additional unit of a commodity. Economic theory suggests that as a person consumes increasingly more of a commodity the marginal utility eventually declines.



market economy -- a private, free-enterprise system based on independent consumer agents, a price system, and economic forces of supply and demand

means testingan approach  to determining eligibility for some benefit, often a payment from a welfare state. It can also help gauge level of assistance offered.  Means refers to income, wealth, resources, support available, and other factors that inform answering the question, “Does this person (or family) need the assistance being considered?”

microeconomics --the branch of economics focused on individual decision making units, such as a person, household, or business. To be contrasted with macroeconomics.

monopoly -- a situation in a market economy when but a single seller exists for a commodity that has no realistic substitute

nationalization–when private property is transferred to government ownership, making it public property.  Such transfer can occur without coercion and be accompanied by full compensation, or the government can simply seize the property.  Nationalization is the opposite of privatization–where public property is sold and becomes private property

needs vs. wants--the former are something that you have to have, the latter are something you would like to have.  If you haven't guessed, needs are more basic, things like air to breathe, food to eat, water to drink, shelter, and other things-- including other people and non-material things they can provide, and other intangibles.  As an example of what might be in this last category are needs that involve feelings such as  "the need to feel valued".  How do you decide if something is really a need or merely a want?  One way is to ask yourself the question, "Can I survive without this?"   

negative income tax -- a scheme by which those below a certain income level would receive money from the government, instead of an paying income tax.

non-economic variables -- things important in the human world but difficult to quantify or put a monetary value on -- including environmental, educational, health, cultural, aesthetic, sociological, political factors.

personal responsibility, accepting -- Before an individual can overcome some personal difficulty or solve a personal problem, he or she needs to acknowledge that the difficulty or problem exists, by saying something like, “This problem is mine and I must solve it”. In this context, taking personal responsibility means that you don’t ignore difficulties or problems, expect others to solve them for you, or shift the blame to others. In a family or social context, taking personal responsibility can mean voluntarily limiting your choices or restraining yourself for the good of the family, tribe, village, community or whatever. Richard Critchfield refers to this as “the freedom to choose self responsibility”. 

production, factors of--in both classical and neoclassical economics these are considered to be labor, land (including natural resources), and capital. These can be hired (labor for wages, land for rent, capital borrowed at some interest rate, etc.) or fired in a market economy.  

productivity--in economic terms, this refers to production output per unit of input.

progressive taxation—a policy by which governments tax those with higher incomes at a greater percentage rate than those with lower incomes. Ideally, this policy taxes those who can afford to pay proportionally more, benefiting those who can least afford it. It is to be distinguished from a flat tax rate, when all pay the same rate regardless of income, and from regressive taxation, where those who can least afford it pay more or are hit harder by the tax.

public education--basic education supported by governments (sometimes mandated) and paid for by government-levied taxes. In many countries (including the United States) such education is tuition-free, primary and secondary (K-12), promises equal opportunities regardless of race, religion, or ability, includes instruction in civics, and is structured to promote high standards and public accountability.   

publicly funded healthcare--provides medical services financed (to some extent) by government levied tax payments rather than payments to private health care providers or insurance companies. Most affluent countries--and even some not so rich ones like Cuba--have partially or totally publicly funded health care systems.  The United States--the only wealthy country not providing its citizens with universal health care--has programs for its elderly (Medicare) and poor (Medicaid).  

public sector /public goods--the former refers to the part of an economy that private individuals or privately owned companies don't own--meaning the remaining part owned by the government, everyone, or no one; the latter refers to goods or services that 1) aren't sold (so can't be allocated by the market system), 2)  whose consumption by one individual doesn't decrease the amount others can consume, and 3) provide no easy way to limit their consumption only to those who pay for them and exclude others who don't.  Examples include the benefits of national defense, weather forecasting services, lighthouses for coastal navigation, and clean air.  Many public goods--like the first three of our examples--exist only because of the collective decision of some group, often a government.  As for our fourth example, some consider classifying environmental things like clean air as public goods as inappropriate, preferring to think of them instead as part of "the commons."  

public housing--refers to programs and activities in which governments build / own / manage housing, help other organizations do so, or subsidize housing--all done in efforts to make housing affordable.  Subsidies, grants and concessions can be made to tenants to help them pay rent, to non profit organizations, or to private developers--sometimes in exchange for assurances that low rent units will be provided to qualified applicants.

redistribution of wealth—the transfer of wealth from the rich to the poor, typically through government taxation policy, in an effort to benefit the disadvantaged and reduce the income gap between the “haves” and “have nots.” Funding welfare assistance programs would be one way that governments could use this money

regulations, public health and economic growth—Many pushing economic growth cite “red tape” /  unnecessary regulations—especially those for workplace safety, public health, and environmental  protection—as burdensome.  In the USA, in 2017 the Trump administration claimed over-regulation cut GDP growth by 0.8% / year. Critics charge that such thinking ignores the high toll that such things as increased air and water pollution, etc. would take on the American public if regulations were relaxed.  Globally, even with many affluent countries working hard to minimize its effects, outdoor air pollution annually causes 4.2 million premature deaths according to the WHO, and costs a staggering $5 trillion / year in health costs and lost productivity according to the World Bank.

shareholders vs. stakeholders-- shareholders are those who own shares in a publicly traded company;  stakeholders are all those with some stake in the company, whether it be as investor, worker, manager, member of surrounding community where company operates, consumer of products or services the company provides—and all others significantly affected by the corporate operations

social contract--its most important meaning refers to an agreement between the people and their rulers in which the  duties and rights of each are defined and constrained.  While rulers would say it serves to maintain order, the people point to it as establishing the principle that rulers have legitimacy only if they have the consent of those they govern.

social justice—refers to 1) a relationship between individuals and society in which people have what is just, defined in various ways as being reasonable, proper, lawful, right, fair, deserved, merited, etc; 2) if the condition described above does not exist, then taking steps to make it so. In practice, in affluent Western societies, seeking social justice is concerned with seeking a fairer distribution of wealth and privilege, equal opportunity for all, ending unfair discrimination or exclusion, and providing a safety net for the especially vulnerable. It can also involve recognizing / rewarding those who contribute to the common good more than those who behave in more self-serving fashion.

social safety netjust as a circus would provide a high wire performer with a safety net for protection should he or she fall, a government might provide social services to rescue / support vulnerable families and individuals during times of crisis. See publicly funded health care for example. 

socialism vs. social welfare statismWhile idealistically pure socialist states don’t exist,  various non-market based centralized national control based economies functioned in many countries in the 1917-1991 era. Today such systems have either collapsed completely or have evolved into hybrids that can be called market socialism—most notably in China.  Measured by the extent that free markets operate, in between the extremes of the world’s two largest economies, China with rather limited market participation, and the much more market-based USA economy, are the modern social welfare states (in the UK and Western Europe,  perhaps operating most completely in Sweden, Denmark, and Norway.)  Here the governments value protecting and promoting the well being of its citizens by running or heavily subsidizing health, education, and various social safety services.  To pay for it, citizens are often more heavily taxed than they would otherwise be.

statism–refers to belief in accepting the political authority of a central state government and its legitimacy with respect to governing, taxing,  regulating—even owning—various sectors of the economy.  Its opposite is anarchism.  Statists value individual freedom in personal matters far less than left wing types who are today called liberals; they value individual freedom in economic matters far less than right wing types who are today called conservatives. Statists generally prefer a society where a heavily centralized state (national) government has a great deal of control over individuals and communities in terms of personal and economic matters. States where the control is total are said to be totalitarian.    

state owned enterprise—a business / corporate enterprise where the state or government has a significant stake in the ownership. They can be 100% state or government owned.  Given their financial objectives—which may include making a profit—they are to be distinguished from state or government agencies—although both share pursuit of public policies.

subsidy–a government payment or incentive to businesses or individuals given in an effort to support a sector of the economy or encourage some type of production / consumption activity.  Two transportation related examples: 1) at one time USA subsidies to oil and gasoline  producers / refiners were such that consumers paid less for a gallon of gasoline than for a gallon of water; 2) electric cars in many countries are more affordable given government rebates of some % of the purchase price.  Subsidies can have many effects: subsidies benefiting consumers  effectively lower prices; some can lead industries to hiring more labor, exporting more products, expanding, etc. Products not getting subsidies often can’t compete with those which are. From a free market perspective, critics charge that by offering subsidies governments are effectively interfering and “picking winners”-- rather than letting the market do this. Many are not bothered by this charge at all, indeed they instead see subsidies as a tool planners can use to steer an economy in a direction they want it to move.                                 

top down vs. bottom up–contrasting approaches to bringing change, solving problems, structuring interaction (compare centrally planned economies, market based ones).

wage and price controls -- regulations on wages and prices (typically limiting their rate of increase) which a government can impose to help combat inflation

wage and wealth inequality --a gap in pay between the sexes or those of different ethnic groups exists in many parts of the world  For example, in the U.S., despite passage of the Equal Pay Act in 1963, which makes it illegal for employers to pay men more than women doing the same work, by the start of the 21st century, women made only 76% as much money as men.  The inequality is even worse when white and black income and wealth are considered. In 2020, USA black males on average earned only 51% of what white males were paid for the same work. And USA white family net wealth exceed that of  black families by 41 times! 

wealth inequality and capitalism—while history suggests the market-based capitalist economic system does a far better job at creating wealth than centralized socialist state non-market systems, it also suggests it promotes wealth inequality. In his 1867 book Capital, Karl Marx argued that in such a system capital would accumulate and wealth become concentrated in fewer and fewer hands.  Analyzing whether this has occurred based on economic history and data is a key focus of Thomas Piketty’s nearly 700 page 2014 book Capital in the Twenty-First Century. There he concludes, 1) “the history of distribution of wealth has always been deeply political, and it cannot be reduced to purely economic mechanisms, and 2)  “there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently.”  

welfare assistance—government provided monetary or other assistance designed to provide an economic or social safety net for those disadvantaged members of society who are unable to support themselves.  Eligibility is determined by income below the poverty level and other “means tests.” Recipients are typically required to demonstrate that they are seeking employment or have enrolled in job training.   See also means testing.

utilitarianism -- belief that the moral value of actions and associated outcomes should be judged according to the degree to which they are useful and benefit those affected. Utilitarianism has two aspects: 1) it links evaluating consequences of actions to human welfare, and accordingly, 2) how it ranks values (value theory) to tied to human welfare. The latter involves all the complexities of arguments over what gives individuals pleasure or happiness, conflicts between individual choice and societal preference, what benefits society in the long run, etc. And it recognizes that assigning value is not merely done by adding benefits, since what is beneficial to some may be detrimental to others, and both the benefits and risks of possible actions must be weighed.

utility -- in economic theory, this refers to the amount of use and satisfaction that a consumer gets from a particular purchase


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