Week 6 - Competition, Globalization, and a Consumerist Culture

Day 1 - Getting Started

Day 2 - Competing for Success

Markets, Innovation, and Creative Destruction

Day 3 - Defining Consumerism

Gluttony and Globalization
8. Fill in the blanks below: Then carefully read Augustine’s quote again; and in your own words explain why “immoderate desire” and not consumption, is the point.
“Gluttony involves the state of ___our_____ ____heart_____ , the _____orientation_____ of our ____desires_______ , our _____priorities______ . Saint Augustine talks about the ‘beautiful form of material things,’ which, while beautiful, can be an occasion for __sin_____.” Carefully read Augustine’s quote again; and in your own words explain why “immoderate desire” and not consumption, is the point.
9. Considering capitalism, not as an ideology, but rather as an economic system with the rule of law, private property, stable money, banking, and where people can freely exchange goods and services, how can free enterprise, as Richards states it, “enhance freedom”?
Because with a free exchange a situation is created where it's a win-win for everybody.
10. Many have worried that capitalism inevitably corrodes cultural values such as faith, family and community and replaces them with an obsession with stuff. They claim the free market "exalts personal fulfillment through individual choice as the summit of human existence." How does Richards counter this claim, and based on all you have learned so far, how would counter the claim?
The free market doesn't exhault anything. Human beings do. We all have free choice.
11. What’s wrong with the “buy locally” mantra?
Because different countries specialize in different things. So if a cold state only bought locally, they wouldn't have any fresh produce most of the year, etc. We benefit from global markets more than you would expect. Regions with droughts or floods would starve to death.
12. “Bigger is better for some things, but not everything,” states your text. Why might “bigger” be better? When might “smaller” be better?
because of mass production, some products are at a much lower price than a local shop. Local charities tend to help vulnerable populations with long-term problems more effectively than big, impersonal organizations.

Day 4 - Defining Consumerism

The Good, the Bad and the Ugly
13. Give at least 3 examples of “creative destruction.” List the products you consume or use today (along with the product it replaced) that were not available even 10 years ago. Example: Flash drives and memory sticks replace the floppy disc for the home computer
Streaming services: Internet services that stream movies and TV shows have largely replaced rental stores and DVDs (for movies) and largely replaced cable and satellite services (for TV shows). 4K televisions: 4K televisions are replacing regular HD televisions. Higher-quality smartphone video: Smartphone video is improving in quality all the time. Higher-quality smartphone video has largely replaced handheld video cameras, handheld cameras that also take video, and lower-quality smartphone video.
14. Rather than ask whether there is a downside, when it comes to creative destruction, what is the question we should ask?
When it comes to creative destruction, the question we should ask is "whether the overall benefits outweigh the costs" (204).
15. How is it that in the age of big agribusiness and the allurement of cheap prices and convenience of WalMart, small locally owned “communal sustainable agriculture” operations and hip stores selling expensive organic produce and free-range eggs exist and even, thrive?
The answer to this question is "demand. That's the beauty of the free market. If people want and have enough money to buy, say, locally grown organic green goddess eggplant rather than the outsized purple eggplant at Safeway, entrepreneurs find a way to provide it" (205-206). In "many cities, small, locally-owned stores survive or reemerge when enough people prefer them, even if they're more expensive" (205).
16. Critics complain about vulgar popular culture, but vulgarity isn't confined to capitalist countries alone. If the real problem is not "strip malls and factories that serve legitimate purposes," what is the greater driver of ugliness in modern culture?
The greater driver of ugliness in modern culture is "modern antihuman architecture, art, and music that celebrate despair and ugliness rather than truth, goodness, and beauty...The culprit is the materialist worldview that has infiltrated almost every nook and cranny of Western culture, a worldview that insists that "beauty" has no basis in reality. Whenever we find the influence of the materialism, we find ugliness" (209).
17. Fill in the blanks below:
When we see “The Artsy Myth” for what it actually is, we discover that “the cultural critique of market economics is more about aesthetics than economics.”
18. What must we do to strike the right balance between aesthetics and economic truth?
In order to strike the right balance between aesthetics and economic truth, "we need to target not markets, but materialism. It's an insidious worldview that denies the great truths of Christianity, truths that led to the greatest flowering of art and architecture, both high and common, that the world has ever known" (210).

Day 5 - Limiting the Competition

How Regulations Hurt the Economy and YOU!
19. What are three major ways that regulations limit exchange and reduce the competitiveness of markets?
The three major ways that regulations limit exchange and reduce the competitiveness of markets are as follows: 1. Regulations "often restrict entry into markets. Many countries impose regulations that make it difficult to enter and compete in various businesses and occupations" (65). 2. When they "substitute political authority for the rule of law and freedom of contract" (65), regulations "will tend to undermine gains from trade. Several countries make a habit of adopting laws that grant political administrators substantial discretionary authority" (65). Furthermore, regulations "often help some businesses by restricting competitors. Because such regulations are lucrative to the few who benefit, they impose an additional cost: Businesses, labor organizations, and other special-interest groups will seek advantage for their constituents by trying to influence the political process...Lobbying for all sides of any issue consumes the time and effort of highly skilled individuals who could be producing wealth instead of seeking political advantages from policies that reduce the productivity of others" (66). 3. The "imposition of price controls will also stifle trade...In terms of units produced and sold, it makes little difference whether price controls push prices up or down; both will reduce the volume of trade and the gains from production and exchange" (66).
20. What are two negative effects of legislation that grants political administrators substantial discretionary authority?
The two negative effects are as follows: 1. That kind of "legislation is an open invitation for government officials to solicit bribes" (66). 2. That kind of "legislation...creates regulatory uncertainty and makes business activity costlier and less attractive, particularly for honest people" (66).
21. How do regulations that appear to be in the interest of workers, like those that make it costly to dismiss workers, negatively affect those very same workers?
These regulations negatively affect workers in ways such as the following: 1. Employers will be less likely to hire new workers (due to the additional cost imposed). 2. When new workers are hired, there will be "a reduction in hours worked, fewer training opportunities, a less convenient work schedule, and fewer fringe benefits" (67-68). 3. The prices of products that are produced by workers in the job with is regulated will go up. 4. In lower-level jobs, young workers will have fewer opportunities to develop their job skills and work experience (due to the lower rates of employment).
22. Fill in the blanks below:
Supporters of licensing argue that it is necessary to protect consumers from shoddy and potentially unsafe products. But, the pressure for licensing seldom originates from consumer groups. Instead, it nearly always arises from those already in the occupation.
23. What is the “best purpose for government”?
The "best purpose for government is to maintain the rule of law—to preserve and defend those conditions which allow individuals and families to pursue lives of freedom and virtue. Since [a person has] the right to protect [him]self and [his] family from theft, murder, and enslavement at the hands of others, [he] can delegate the defense of that right to the government. Therefore, when the government protects the life, liberty, and property of [his] family, it allows [him] to be more rather than less free" (3).
24. What did the World Bank study reveal about the connection between economic growth and regulation?
The "World Bank study of regulation around the world revealed the connection between economic growth and regulation, finding that “[h]eavier regulation is generally associated with . . . more unemployed people, corruption, less productivity and investment.” At the same time, the authors did not find a correlation with better quality of private or public goods" (6).
25. Why would market-oriented solutions work as well, or better, than regulations?
Market-oriented solutions work as well as, or better than, regulations because they "harness competition, better access to information, consumer choice, and market prices to shape desirable outcomes" (10).

The Economy Hits Home - How the Flood of Regulations Hurts Americans