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The Road to Serfdom " However, Keynes did not think Hayek's philosophy was of "practical" use; this was explained later in the same letter, commenting: "What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger ahead is the probable practical failure of the application of your philosophy in the United States." George Orwell responded with both praise and criticism, stating, "in the negative part of Professor Hayek's thesis there is a great deal of truth. It cannot be said too often – at any rate, it is not being said nearly often enough – that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitors never dreamt of." Yet he also warned, "[A] return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the state." Milton Friedman described "The Road to Serfdom" as "one of the great books of our time," and said of it: I think the Adam Smith role was played in this cycle [i.e. the late twentieth century collapse of socialism in which the idea of free-markets succeeded first, and then special events catalyzed a complete change of socio-political policy in countries around the world] by Friedrich Hayek’s "The Road to Serfdom" | https://en.wikipedia.org/wiki?curid=824889 |
The Road to Serfdom Herman Finer, a Fabian socialist, published a rebuttal in his "The Road to Reaction" in 1946. Hayek called Finer's book "a specimen of abuse and invective which is probably unique in contemporary academic discussion". In his review (collected in "The Present as History", 1953) Marxist Paul Sweezy joked that Hayek would have you believe that if there was an over-production of baby carriages, the central planners would then order the population to have more babies instead of simply warehousing the temporary excess of carriages and decreasing production for next year. The cybernetic arguments of Stafford Beer in his 1973 CBC Massey Lectures, "Designing Freedom" – that intelligent adaptive planning can increase freedom – are of interest in this regard, as is the technical work of Herbert A. Simon and Albert Ando on the dynamics of hierarchical nearly decomposable systems in economics – namely, that everything in such a system is not tightly coupled to everything else. Mises Institute libertarian/anarcho-capitalist economist Walter Block has observed critically that while "The Road to Serfdom" makes a strong case against centrally planned economies, it appears only lukewarm in its support of a free market system and "laissez-faire" capitalism, with Hayek even going so far as to say that "probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire capitalism" | https://en.wikipedia.org/wiki?curid=824889 |
The Road to Serfdom In the book, Hayek writes that the government has a role to play in the economy through the monetary system (a view that he later withdrew), work-hours regulation, social welfare, and institutions for the flow of proper information. Through analysis of this and many other of Hayek's works, Block asserts that: "in making the case against socialism, Hayek was led into making all sort of compromises with what otherwise appeared to be his own philosophical perspective – so much so, that if a system was erected on the basis of them, it would not differ too sharply from what this author explicitly opposed". The ideas advocated in "The Road to Serfdom" have been criticized by many academics. Jeffrey Sachs argues that empirical evidence suggests social-welfare states, with high rates of taxation and social outlays, outperform the comparatively free-market economies. William Easterly wrote a rebuttal criticizing Sachs for misrepresenting Hayek's work and for criticizing the book on issues it did not actually address, such as welfare programs for the elderly or sick, something Hayek was not entirely opposed to. Easterly noted that the Road to Serfdom was about the dangers of centralized planning and nationalization of industry, including the media. In Sachs' counter-rebuttal, he argued that he was addressing Hayek's forward in the 1976 adaptation which stated that efforts to bring about large-scale welfare states would bring about serfdom, although much more slowly than under centralized planning | https://en.wikipedia.org/wiki?curid=824889 |
The Road to Serfdom Sachs cited the Nordic states which remained economically free and relatively capitalist, despite a large welfare state that Hayek was wrong about such programs leading to serfdom. Gordon Tullock has argued Hayek's analysis incorrectly predicted governments in much of Europe in the late 20th century would descend into totalitarianism. He uses Sweden, in which the government at that time controlled 63 percent of GNP, as an example to support his argument that the basic problem with "The Road to Serfdom" is "that it offered predictions which turned out to be false. The steady advance of government in places such as Sweden has not led to any loss of non-economic freedoms." While criticizing Hayek, Tullock still praises the classical liberal notion of economic freedom, saying, "Arguments for political freedom are strong, as are the arguments for economic freedom. We needn’t make one set of arguments depend on the other." However, according to Robert Skidelsky, Hayek "safeguarded himself from such retrospective refutation". Skidelsky argues that Hayek's argument was contingent, and that, "By the 1970s there was some evidence of the slippery slope ... and then there was Thatcher. Hayek's warning played a critical part in her determination to 'roll back the state.'" Economic sociologist Karl Polanyi made a case diametrically opposed to Hayek, arguing that unfettered markets had undermined the social order and that economic breakdown had paved the way for the emergence of dictatorship | https://en.wikipedia.org/wiki?curid=824889 |
The Road to Serfdom Barbara Wootton wrote "Freedom under Planning" after reading an early copy of "The Road to Serfdom", provided to her by Hayek. In the introduction to her book, Wootton mentioned "The Road to Serfdom" and claimed that "Much of what I have written is devoted to criticism of the views put forward by Professor Hayek in this and other books." The central argument made in "Freedom under Planning" is that "there is nothing in the conscious planning of economic priorities which is inherently incompatible with the freedoms which mean most to the contemporary Englishman or American. Civil liberties are quite unaffected. We can, if we wish, deliberately plan so as to give the fullest possible scope for the pursuit by individuals and social groups of cultural ends which are in no way state-determined." Wootton criticizes Hayek for claiming that planning "must" lead to oppression, when, in her view, that is merely one "possibility" among many. She argues that "there seems hardly better case for taking for granted that planning will bring the worst to the top than for the opposite assumption that the seats of office will be filled with angels". Thus, Wootton acknowledges the possibility that planning may exist alongside tyranny, but claims that it is equally possible to combine planning with freedom. She concludes that "A happy and fruitful marriage between freedom and planning can, in short, be arranged | https://en.wikipedia.org/wiki?curid=824889 |
The Road to Serfdom " However, Frank Knight, founder of the Chicago school of economics, disputes the claim that "Freedom under Planning" contradicts "The Road to Serfdom". He wrote in a scholarly review of the Wootton book: "Let me repeat that the Wootton book is in no logical sense an answer to "The Road to Serfdom", whatever may be thought of the cogency of Hayek's argument, or the soundness of his position." Eric Zencey wrote that the free market economy Hayek advocated is designed for an infinite planet, and when it runs into physical limits (as any growing system must), the result is a need for centralized planning to mediate the problematic interface of economy and nature. "Planning is planning, whether it's done to minimize poverty and injustice, as socialists were advocating then, or to preserve the minimum flow of ecosystem services that civilization requires, as we are finding increasingly necessary today." | https://en.wikipedia.org/wiki?curid=824889 |
Surplus store A surplus store or disposals store in the Commonwealth of Nations sells items that are used, or purchased but unused, and no longer needed. The surplus is often military, government or industrial excess often called army-navy stores or war surplus stores in the United States. A surplus store may also sell items that are past their use by date. An "army surplus store", or "navy surplus store", is any store, usually retail, which sells "military surplus" — general equipment that was intended for the military but is unable to be used or originally purchased in excess by the military. These stores often sell camping equipment or military clothing (especially jackets and helmets). Following the First and Second World Wars, large amounts of former military clothing and equipment were sold in these stores Known as "army surplus" stores, these typically also carry sporting goods related to hunting, fishing, and camping. Army surplus stores in China are very common. They mostly specialize in clothing, footwear, tarpaulins and blankets, but also commonly sell occupational safety equipment. At the end of the Second World War, the allied forces initially confiscated stock and material of the German army. In 1948 a government agency, the "Staatliche Erfassungsgesellschaft für öffentliches Gut" ("State Collecting Company for Public Good", StEG), was formed to manage the sale of this army surplus. In reference to the name of this agency, the army surplus was called "Stegware | https://en.wikipedia.org/wiki?curid=835394 |
Surplus store " The surplus included 500,000 tonnes or stock and over 150,000 tonnes of scrap. In the early 1950s the US military began to add their own surplus from the war. The joint surplus was sold in so called "Steg shops" across Germany until the 1980s. Goods included used and new clothing, camping equipment and tools. In the early days vehicles and heavier equipment were also sold. | https://en.wikipedia.org/wiki?curid=835394 |
Use value (German: "Gebrauchswert") or value in use is a concept in classical political economy and Marxian economics. It refers to the tangible features of a commodity (a tradeable object) which can satisfy some human requirement, want or need, or which serves a useful purpose. In Karl Marx's critique of political economy, any product has a labor-value and a use-value, and if it is traded as a commodity in markets, it additionally has an exchange value, most often expressed as a money-price. Marx acknowledges that commodities being traded also have a "general utility", implied by the fact that people want them, but he argues that this by itself tells us nothing about the specific character of the economy in which they are produced and sold. The concepts of value, use value, utility, exchange value and price have a very long history in economic and philosophical thought. From Aristotle to Adam Smith and David Ricardo, their meanings have evolved. Smith recognized that commodities may have an exchange-value but may satisfy no use-value, such as diamonds, while a commodity with a very high use-value may have a very low exchange-value, such as water. Marx comments for example that "in English writers of the 17th century we frequently find "worth" in the sense of value in use, and "value" in the sense of exchange-value | https://en.wikipedia.org/wiki?curid=843107 |
Use value " With the expansion of market economy, however, the focus of economists has increasingly been on prices and price-relations, the social process of exchange as such being assumed to occur as a naturally given fact. In "The Economic and Philosophic Manuscripts of 1844", Marx emphasizes that the use-value of a labour-product is practical and objectively determined; that is, it inheres in the intrinsic characteristics of a product that enable it to satisfy a human need or want. The use-value of a product therefore exists as a material reality vis-a-vis social needs regardless of the individual need of any particular person. The use-value of a commodity is specifically a social use-value, meaning that it has a generally accepted use-value for others in society, and not just for the producer. Marx first defines use-value precisely in "A Contribution to the Critique of Political Economy" (1859) where he explains: The concept is also introduced at the beginning of "Das Kapital," where Marx writes, but in the extract below he holds it up as a critique of Hegel's liberal "Philosophy of Right". He remained a sharp critic of what was to the Marxian view a destructive philosophy: This was a direct reference by Marx to Hegel's "Elements of the Philosophy of Right" §63 as Marx adds: Marx acknowledges that a nominal price or value can be imputed to goods or assets which are not reproducible goods and not produced by human labour, as correctly noted later by Engels that a product is not necessarily a commodity | https://en.wikipedia.org/wiki?curid=843107 |
Use value However Marx generally holds that only human labour expended can create value compared with Nature, through instrumentation known as modus operandi, or the method of working. "As exchange-values, all commodities are merely definite quantities of congealed labour-time", wrote Karl Marx. The discrepancy of the true purpose of value came to be one of the biggest sources of conflict between capital and labour. The transformation of a use-value into a social use-value and into a commodity (the process of commodification) is not automatic or spontaneous, but has technical, social and political preconditions. For example, it must be possible to trade it, and to transfer ownership or access rights to it from one person or organization to another in a secure way. There must also be a real market demand for it. And all that may depend greatly on the nature of the use-value itself, as well as the ability to package, store, preserve and transport it. In the case of information or communication as use-values, transforming them into commodities may be a complex and problem-fraught process. Thus, the objective characteristics of use-values are very important for understanding (1) the development and expansion of market trade, and (2) necessary technical relationships between different economic activities (e.g. supply chains). To produce a car, for example, you objectively require steel, and this steel is required, regardless of what its price might be | https://en.wikipedia.org/wiki?curid=843107 |
Use value Necessary relationships therefore exist between different use-values, because they are technically, materially and practically related. Some authors therefore write about an "industrial complex" or "technological complex", indicating thereby how different technological products are linked in a system. A good example would be all the different products involved in the production and use of motor cars. The category of use-value is also important in distinguishing different economic sectors according to their specific type of output. Following Quesnay's analysis of economic reproduction, Marx distinguished between the economic sector producing means of production and the sectors producing consumer goods and luxuries. In modern national accounts more subtle distinctions are made, for example between primary, secondary and tertiary production, semi-durable and durable goods, and so on. In his textbook "The Theory of Capitalist Development" (1942), American Marxist Paul Sweezy claimed: Curiously, Sweezy disregarded that in consuming (both intermediate and final consumption), producers and consumers might "also" be socially related. Likewise, in his influential "Principles of Political Economy", the Japanese Marxist Kozo Uno sums up the theory of a "purely capitalist society" in the three doctrines of circulation, production and distribution | https://en.wikipedia.org/wiki?curid=843107 |
Use value Apparently it did not occur to him that even in the purest capitalist society, (final) consumption would have to occur as a necessary aspect of economic reproduction, and that capitalist relations extended to, and included, the way in which consumption was organised in capitalist society—increasingly substituting private consumption for collective consumption. Marx himself explicitly rejected Sweezy's and Uno's interpretation (see the quotation from 1859 cited previously, in which use-value is distinguished from the general concept of utility). In a draft included in the Grundrisse manuscripts, which inspired the starting point of "A Contribution to the Critique of Political Economy" and "Das Kapital", Marx explicitly states: In an important essay Roman Rosdolsky shows the important role of use value in Marx's economics. The fact is that Marx himself, in the introduction to his "Grundrisse" manuscript, had defined the economic sphere as the "totality" of production, circulation, distribution "and consumption". He did not however live to finish "Das Kapital", and did not theorise how commercial relations would reshape the sphere of personal consumption in accordance with the requirements of capital accumulation. Minor issues remained from the redundant neoclassical theories, such as the question of the proper empirical definition of capital and labour in the laws factor substitution | https://en.wikipedia.org/wiki?curid=843107 |
Use value Other empirical issues include the so-called Solow Residual in which the heterogenous nature of labour is thoroughly explored for its qualitative elements beyond differentiation. and the concept of total factor productivity, prompting some to consider such things as technology, human capital, stock of knowledge to name a few tested. It was only later that scholars such as Walter Benjamin, Fernand Braudel, Ben Fine, Manuel Castells and Michel Aglietta tried to fill this gap in Marx's unfinished work. In modern times the theory has been extended to conclude that conversion of energy-driven work does not rely on labour-intensive inputs; thus use can be unsupervised work that develops a notion of human capital. "Equation: A = P + hL" Marx's concept of use-value seems akin to, but in reality differs from the neoclassical concept of utility: In summary, different concepts of use value lead to different interpretations and explanations of trade, commerce and capitalism. Marx's main argument is that if we focus only on the general utility of a commodity, we abstract from and ignore precisely the specific social relations of production which created it | https://en.wikipedia.org/wiki?curid=843107 |
Use value Some academics such as Professor Robert Albritton, a Canadian political scientist, have claimed that according to Marx, capitalists are basically "indifferent" to the use-value of the goods and services in which they trade, since what matters to capitalists is just the money they make; whatever the buyer does with the goods and services produced is, so it seems, of no real concern. But this is arguably a misunderstanding of business activity and the bourgeoisie as a class. Marx thought that capitalists can never be totally "indifferent" to use-values, because inputs of sufficient quality (labour, materials, equipment) must be bought and managed to produce outputs that: For this purpose, the inputs in production must moreover be used in an economical way, and care must be taken not to waste resources to the extent that this would mean additional costs for an enterprise, or reduce productivity. The Theory of Use Values relates directly to human labour and the power of machines to destroy value, "Living labour must seize on these things, awaken them from the dead, change them from merely possible into real and effective use values". It is just that from the point of view of the financier or investor, the main concern is not what exactly is being produced as such or how useful that is for society, but whether the investment can make a profit for him. If the products of the enterprise being invested in sell and make a profit, then that is regarded as sufficient indication of usefulness | https://en.wikipedia.org/wiki?curid=843107 |
Use value Even so, the investor is obviously interested in "the state of the market" for the enterprise's products—if certain products are being used less or used more, this affects sales and profits. So to evaluate "the state of the market", the investor needs knowledge about the place of a product in the value chain and how it is being used. Often, Marx assumed in "Das Kapital" for argument's sake that supply and demand will balance, and that products do sell. Even so, Marx carefully defines the production process both as a labour process creating use-values, and a valorisation process creating new value. He asserts only that "capital in general" as an abstract social power, or as a property claim to surplus value, is indifferent to particular use-values—what matters in this financial relation is only whether more value can be appropriated through the exchanges that occur. Most share-holders are not interested in whether a company actually satisfies customers, they want an adequate profit on their investment (but a countertrend is so-called "socially responsible investing"). In modern times, business leaders are often very concerned with total quality management in production, which has become the object of scientific studies, as well as a new source of industrial conflict, since attempts are made to integrate "everything" a worker is and does (both his creative potential and how he relates to others) in the battle for improved quality | https://en.wikipedia.org/wiki?curid=843107 |
Use value In that case, it could be argued not just labour power but the whole person is a use-value (see further Richard Sennett's books such as "The Culture of the New Capitalism", Yale (2006). Some regard this practice as a kind of "wage-slavery". From beginning to end, and from production to consumption, use-value and exchange-value form a dialectical unity. If this is not fully clear from Marx's writings, that is perhaps mainly because he never theorised the sphere of final consumption in any detail, nor the way in which commerce reshapes the way that final consumption takes place. | https://en.wikipedia.org/wiki?curid=843107 |
Progressive Utilization Theory (PROUT) is a socioeconomic and political theory given by the Indian philosopher and spiritual leader Prabhat Ranjan Sarkar. Sarkar introduced PROUT in 1959. Supporters of PROUT (Proutists) claim that the theory exposes and overcomes the limitations of both capitalism and communism. It aims to be economically progressive and improve social development. The theory is in line with Sarkar's Neohumanist values which aim to provide "proper care" to every being on the planet, including humans, animals and plants. By 1959, Sarkar had developed the ideas of Prout. In 1961, the theory was formally outlined in his book "Ananda Sutram", published under his spiritual name Shrii Shrii Ánandamúrti. The theory is not widely accepted. Cooperative communities have been established by Ananda Marga in an attempt to provide ideal models for the society outlined in Prout. Prout proposes a socioeconomic system as an alternative to communism and capitalism, taking ideas from both. Under the system material goods would be common property and distributed in a rational and equitable way to maximize the physical, mental, and spiritual development of all people. The distribution intends to guarantee food, clothing, shelter, education, and medical care (what the theory regards as minimum requirements for humans). Prout advocates a three-tiered approach to industrial organization. Key industries and public utilities would be nonprofit organizations | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Decentralized industry run by sociolinguistic unions would provide people's minimum necessities. The majority of economic transactions would be through producers' and consumers' cooperatives. Incentives for people serving society would be funded via surpluses. At the political level, Prout rejects nationalism. Instead, there would be locally governed self-sufficient socioeconomic zones and a world government. There would be a world constitution and a bill of rights for animals and plants, as well as humans. Prout takes account of Sarkat's law of social cycle. It sees the social order as consisting of four classes of people that cyclically dominate society: "shudras" (workers), "kshatriyas" (warriors), "vipras" (intellectuals) and "vaishyas" (acquisitors). However, Prout does not seek the abolition of these four classes, as it sees them as "... not merely as a power configuration, but as a way of knowing the world, as a paradigm, episteme or deep structure if you will." It considers that any person can be worker, warrior, intellectual or acquisitive minded. Prout see the four classes as connected to cyclic processes across time. That when a class of people struggle and rise to power they cause a revolution in the physical and mental world. To prevent any social class from clinging to political power and exploiting the others, a "spiritual elite" sadvipras (etymologically sad – true, vipra – intellectual) would determine who will hold political leadership | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Prout theorises that the first sadvipras would come from disgruntled middle-class intellectuals and warriors. Sadvipras would be organized into executive, legislative, and judicial boards which would be governed by a Supreme Board. They would be responsible for the order of dominance within the social order. The Prout theory is inline with Sarkar's Neohumanism philosophy. The philosophy is a reinterpretation of humanism integrating the idea of unity of all life. In it all living beings belong to a universal family deserving equal care and respect. In 1962, Sarkar formally outlined Prout in sixteen aphorisms (see Chapter 5 of "Ananda Sutram"). The last five aphorisms (5:12-16) are commonly referred to as the five fundamental principles of Prout. These five principles are deemed to be fundamental because it would be difficult to get a clear understanding of Prout without comprehending the underlying concepts of these principles, the interrelationship of the principles, and their respective areas of application. The five aphorisms from Ananda Sutram translate into English as follows: An initial glimpse of these five principles first appeared in Sarkar's earlier work, "Idea and Ideology". As far as Prout's values and goals differ from those of capitalism and communism, so does its economic structure | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Following a close analysis of the two systems, Prout's propounder argues that these philosophies are "anti-human“ in the sense that they encourage people to relentlessly pursue material attainment, like name, fame, etc. Another criticism of neo-liberalism and capitalism in general is the centralization of economic power in the hands of the rich leads to the exploitation of the masses and ultimately to the degeneration of society. Prout claims that both capitalism and communism have been built on shaky foundations, and identifies weaknesses to a point where a new market system is required. He heavily critiqued communism, indicating that one of the reasons the USSRs experiment with communism did not work, causing the eventual implosion of their political structure, is that the sovietic central planning committees (Gosplan) had too much economic decision and cohersion power in the federation (see Marxism–Leninism). Nonetheless, Sarkar observed aspects of market planning that help to create and sustain a healthy economy. In summary, Proutist thought considers that planning allows the market to protect its stakeholders from the meanderings of neo-liberal economics where profit-motive speaks highest. However, he stresses that a planning committee at a national level should only outline the broader aspects of economic development, leaving the details to be resolved by planning bodies at a local level where problems are best understood and more easily dealt with. (see diseconomies of scale) | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Consequently, this kind of top-down planning will leave communities, enterprises and ultimately workers with a significant level of freedom to decide their own economic future (see decentralized planning). Prout also claims that the nationalization of enterprises is inefficient due to the larger costs and amount of bureaucracy necessary to keep state-controlled industries running. Yet, there are some industries that should be nationalized, operating on a "no-profit, no-loss" principle. Concerning wealth distribution among the population, Prout argues for an "optimal inequality" where the wage gap between the richer strata of society is substantially subsided. Richard Freeman, a Harvard economist, points out income inequality comes from the monopoly of power and other activities with "negative consequences" in terms of social development. Nonetheless Prout is not in favour of total income equality, claiming that in a society where material motivation to work is absent, the willingness to strive for financial success and to thrive in the creative development of industry and society will be lost in its citizens. Therefore, Sarkar argues for the implementation of a policy allowing the most meritous in society to receive added perks for the added benefits they bring to society. It is thus theorized that the communist's motto of from each according to his ability, to each according to his needs cannot work in the real world | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Prout proposes instead a minimum and maximum wage, roughly attributed according to the value the work of each person brings to society. We see examples of attempts in this direction in companies like Mondragon or Whole Foods. Regarding neo-liberalism, Sarkar throws a new light to the concept of Adam Smith's invisible hand, where individual producers acting self-interest benefit the community as a whole. Prout claims that, unchecked, societies economic elite will disrupt the just circulation of material wealth within society. The market will then require regulatory measures so as to create a functional economic system. In relation to democracy, Prout argues that political democracy is not enough to free society from exploitation and what it considers extreme income inequality. As Roar Bjonnes, a known Proutist, states, "Unless we have deeper structural change – what we refer to as economic-systems change – we will never be able to solve such global and systemic problems as the environmental and inequality crises. History has demonstrated that political democracy is not enough." Prout, therefore, advocates an economic democracy where the decision-making power for the economic future of a community is given to its inhabitants. Economic democracy is not a new term, but Sarkar reinvents it by setting four requirements for what he considers a successful one. The first and foremost requirement is guaranteeing the minimum requirements of life to all members of society | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Secondly, and following one of the five fundamental principles, Prout argues that there should be an increasing purchasing capacity for each individual, stating that local people will have to hold economic power over their socio-economic region. Still, on this regard, Sarkar theorizes that, unlike capitalism, where the production and distribution of goods are mainly decided by market competition, in a Proutistic society it should be based on necessity. The third requirement of economic democracy is the decentralization of power, giving the freedom to make economic decisions to its stakeholders. That can be accomplished by adopting a worker-owned cooperative system and by the use of local resources (raw materials and other natural resources) for the development of the region and not merely for export. In summary, Prout advocates a decentralized economy where self-sufficient economic zones are created and organized according to a set of predetermined conditions (see socio-economic units). Prout claims this requirement does not express xenophobic feelings, it solely claims to be the realization that there should not be a constant outflow of local capital, where natural resources are explored by foreign investment companies that extract assets and money out of the community. From a Neohumanist perspective, all people are free to choose where they wish to live, as long as they merge their economic interests with the ones of the local people | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory A socio-economic unit, or Samaj in Sanskrit, is the Proutist materialization of the collective effort to create a strong and resilient local community, built on strong feelings of solidarity and self-identity. There are a few criteria that Sarkar outlined in order to build a working and cohesive socio-economic unit. Similar to bioregions, their purpose is to facilitate cooperative development, moving towards a decentralized economy, where these units are economically independent and self-reliant. Though still guided by national and federal guidelines and laws, they should prepare its own economic plan. Aiming to achieve maximum efficiency in the utilization of local resources, they propose to make trade across borders more balanced and mutually beneficial. From Prout's perspective, a progressive society cannot solely be measured by the wealth of a nation or its GDP levels. Prout recognizes the benefits of material progress, but deems them insufficient indicators of the development of human society. It argues that even though progress as its interpreted by society today has its advantages, there are negative side effects that, if unchecked, bring more harm than good. Ronald Logan, author of "A new Paradigm of Development," reminds its readers that even though auto and air traffic enables us to travel at increasing speeds, bringing great convenience to travelers and commuters, it also brings air pollution, noise pollution, traffic congestion, accidental deaths, alienation from nature, etc | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory Presented with this quasi-paradoxical situation, Prout offers a concept of progress as a society that transcends material and technological development. Moving along the lines of the triple bottom line that analyzes the social, environmental and financial output of a given enterprise, Prout advocates a measure of progress that encompasses the qualities of what could be termed a "fourth bottom line", characterized by the incorporation of a transcendental dimension of human life that focuses on the integrated development of the body, mind and spirit. This fourth bottom line will allow society in general and individuals in particular to develop an expanded sense of identity, allowing for a neohumanist will of inclusion, creating a society where material gains are not the summum bonum of life and allowing space to be created for people to work together in a symbiotic movement that primes for individual and collective welfare through social, cultural, as well as technological development. Prout acknowledges that the well-being of individuals lies in the development of the collective, and that the collective depends on the development of individuals. Therefore, in order to understand how a progressive society is to be achieved, Sarkar tries to analyze what it means for a human being to grow and develop. He concludes that physical and psychic development render little progress for a human being as they are subject to deterioration and decay | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory There are multifarious diseases that affect our body and mind, and even if we stay free of them, eventually time will turn all our physical and mental faculties of no use. Sarkar argues that the only aspect of human life that seems to be subject to no change over time is its transcendental nature, the "supra-emotional values" intrinsic to the human mind and which exacerbate human multilateral existence. "The deepest truths of life are an eternal fountain of inspiration. Spiritual, transpersonal development is a process of expanding one's consciousness to link with the Infinite, to reach a state of deep peace and happiness." From a Maslownian perspective, Sarkar defends the need to meet physical and mental needs before being able to engage in a journey to find that transcendental nature of the world. The five fundamental principles stem from this idea that society needs to provide for the basic necessities of all human beings so that they can engage in this journey of self-discovery and achieve true progress. Fundamentally, progress in society is the effort through which communities engage in the fulfillment of human needs, with the goal of achieving a transcendental existence. As a goal, transcendence will offer a fourth bottom line which ideally would propel human society into a more peaceful, inclusive and all-round more progressive existence. Prout is a relatively unknown theory. Ravi Batra was one of the first economists that used the ideas of Prout in his bestseller "The Great Depression of 1990" | https://en.wikipedia.org/wiki?curid=851574 |
Progressive Utilization Theory In time, the theory attracted attention of people like Johan Galtung, founder of the UN Institute for Peace studies who claimed that ""Sarkar’s theory is far superior to Adam Smith’s or that of Marx."" According to a description by Terry Irving and Rowan Cahill, Prout "envisages a decentralised, community-based world economy of self-sufficiency for the poor; economic democracy; small business; and limits on the accumulation of wealth." Sohail Inayatullah stated that the philosophy "attempts to balance the need for societies to create wealth and grow with the requirements for distribution." David Skrbina characterized Prout as a "model of social development... which advocates a 'small is beautiful' approach to society." Economics instructor Mark Friedman places Sarkar's economic thought in the tradition of Monsignor John A. Ryan, E.F. Schumacher and Herman Daly in Sarkar's incorporation of spiritual values into economic goals. It has been characterized as a form of "progressive socialism" as well as a "socialist theory". Hans Despain noted, in Monthly Review, that there are similarities between Prout and the theories of David Schweickart, Gar Alperovitz and Richard D. Wolff. Particularly the focus on economic democracy and co-operatives. | https://en.wikipedia.org/wiki?curid=851574 |
Non-DVP trading is defined as securities trading where a client's custodian will have to release payment or deliver securities on behalf of the client before there is certainty that it will receive the counter-value in cash or securities, thus incurring settlement risk. DVP stands for Delivery versus Payment. A party to a transaction pays for something when it is delivered. When there is a delivery from A to B, delivery is made by A, receipt is had by B. B, the party that receives, is obliged to make a payment. The issue revolves around: 1) timing of transaction 2) value of transaction, and 3) trustworthiness of A and B. The ideal situation is timing is matched for delivery / receipt and payment without any lag or deferral. If A and B had previous dealings and are completely trustworthy, then they may not mind delay of one or two working days. Whereas if trust has not been established, delay of one hour means the transaction is non-DVP. In terms of value, the larger the value, the greater the urgency for everything to be completely wrapped up. Note: Whenever there is a delivery, there is a receipt; also known as non-RVP (non Receipt Versus Payment). Settlement_(finance)#Nature_of_settlement | https://en.wikipedia.org/wiki?curid=851877 |
Commercialism is the application of both manufacturing and consumption towards personal usage, or the practices, methods, aims, and spirit of free enterprise geared toward generating profit. can also be used in a negative connotation to refer to the possibility within open-market capitalism to exploit objects, people, or the environment for private gain for the purpose of generating profit. As such, the related term "commercialized" can be used in a negative fashion, implying that someone or something has been despoiled by commercial or monetary interests. can also refer, positively or negatively, to corporate domination. is often closely associated with the corporate world and advertising, and often makes use of advancements in technology. | https://en.wikipedia.org/wiki?curid=863239 |
Public sector borrowing requirement (PSBR) is the old name for the budget deficit in the United Kingdom. The budget deficit has been renamed the public sector net cash requirement (PSNCR) to avoid confusion with net borrowing. PSBR occurs when expenditures for the government activities in the public sector of the economy exceed the income. The resulting deficit is then financed by borrowing funds from the public, usually by the means of government gilts. Both PSBR and PSNCR measures are shown in the Office for National Statistics monthly First Release "Public sector finances ". | https://en.wikipedia.org/wiki?curid=867778 |
Kenneth Boulding's evolutionary perspective Kenneth E. Boulding's evolutionary perspective is an approach to economics (see also evolutionary economics) put forward most completely in his "Ecodynamics" (1978) and "Evolutionary Economics" (1981) had roots in his 1934 work on population theory and the age structure of capital as well as his "Reconstruction" (1950) with chapter titles like "An Ecological Introduction" and "The Theory of the Economic Organism." One of the first major perspectives of Boulding's evolutionary perspective was his emphasis on know-how or, to use the term of Vladimir Vernadsky (1926) and Teilhard de Chardin (1959), which Boulding used as well, the "Noosphere." This is the counterpart in social and economic evolution to the role of genetic information and DNA in biological evolution. Just as DNA provides the genetic know-how to produce a chicken from an egg, automotive engineers and their recording devices contain the know-how to produce an automobile. One of the first major neoclassical casualties of this perspective comes from Boulding's critique of the usual factors of production, land, labor and capital: It is much more accurate to identify the factors of production as know-how (that is genetic information structure), energy, and materials, for, as we have seen, all processes of production involve the direction of energy by some know-how structure toward the selection, transportation, and transformation of materials into the product | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective "Labor" is a category marginally useful to Boulding for studying distribution, but of no use whatever for studying production. Boulding's factors of production are know-how, materials and energy; hence, a theory which holds labor—a heterogeneous collection of artifacts of know-how, energy and materials—as the source of value in the production process has "all the scientific validity of the medieval elements of earth, air, fire, and water." Another former president of the American Economic Association, Georgescu-Roegen, also began to dissent from orthodox economics for reasons not dissimilar to Boulding. In his classic work, The Entropy Law and the Economic Process, Georgescu-Roegen issued a call for the end of the circular flow diagrams used in mainstream thought and textbooks in which the production and circulation process are detached from the physical reality, the scale, of the planet's resources and pollution sinks. He called for greater attention to be given to the second law of thermodynamics – that it be treated as a cornerstone of the mainstream paradigm. Boulding can be seen as addressing this call | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective Once one considers the possibility that labor can be seen as an intermediate surrogate for more fundamental factors, like know-how, materials and energy, then it is a short step to treat (as Boulding sometimes does) capital as a surrogate for know-how and land as surrogate for material resources and the traditional factors of production, land, labor and capital, are easily rearticulated as know-how, energy and materials. If and when that sort of transformation in thought takes place, professional attention will immediately be focused on the throughput resulting from the production and consumption process. With the rising perception of environmental degradation and the unrelenting thrust of the environmental movement, there is every reason to expect the profession to include throughput as a centerpiece in the production process. Boulding's factors of production accomplish this task. Once the traditional factor of production (i.e. capital) is reinterpreted as know-how, one can easily conclude that know-how and the growth of knowledge are "the essential key to economic development. Investment, financial systems and economic organizations and institutions are in a sense only the machinery by which a knowledge process is created and expressed." ("Economic Development as an Evolutionary System"). Boulding (1961) (1964) embedded his view of development in a long-term perspective that envisages us as moving from our current "civilized society" to "post-civilized society" | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective The driving force of this movement is science or the culture that supports science. Development of the third world is a critical part of the movement to a "post-civilized society". His "post-civilized society" is not the stationary state of John Stuart Mill or Herman Daly, but it does have a stable population. As a young man in his twenties, Boulding took a position that we now refer to as neo-Malthusian. He argued that "the indication seems to be" that the (per-capita) income level at which the western world would only reproduce itself is one "that the actual standard of life can never reach." (1939, 107) Thirty years later, still prior to Paul Ehrlich's Population Bomb (1969) and the limits-to-growth literature (e.g., Meadows, 1971), Boulding argued (1965) that it "is hard to avoid considerable pessimism" about the prospects of development, especially in countries with high birth rates, which could undermine the great potential of a post-civilized society. His major contribution to this problem is probably the argument (1964) for tradable birth-right permits. His dissidence on this issue is "political" – it runs against the grain of the political climate both then and now. If he was correct about the emerging seriousness of the population problem and if that level of concern is one day reflected in popular political sentiment, there is every reason to expect the profession to embrace Boulding's call for tradable birth-right permits, since it is based squarely on neoclassical concern for efficiency | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective Boulding is widely known for his criticism of mainstream economists' use of equilibrium analysis and, in particular, for the profession's acceptance of what Boulding calls "Samuelson's dynamics" (originating with the Foundations (1947)). To appreciate his position, it is important to reflect on the different time scales in biological evolution and what Boulding calls social or societal evolution. With the advent of the human capacity for developing complex images (1950), social evolution has proceeded orders of magnitude faster than biological evolution. Changes, for example, in the size of the human brain have occurred orders of magnitude more slowly than social and economic changes in the last ten millennia. Yet slower than biological evolution is the time scale of astronomical change. The relations among the celestial bodies of the solar system were first depicted mathematically by Newton. The precision with which the field of celestial mechanics is able to describe the movements of bodies of the solar system is due to the incredibly slow time scale of astronomical, evolutionary change. Boulding's longstanding concern was that equilibrium analysis, market dynamics and growth theory as practised in conventional economics are based on the mathematics of difference and differential equations, as found in celestial mechanics | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective Along with his critique of equilibrium analysis, he has the following critique with the profession's methodological emphasis on prediction as being the criterion of good theory: Prediction of the future is possible only in systems that have stable parameters like celestial mechanics. The only reason why prediction is so successful in celestial mechanics is that the evolution of the solar system has ground to a halt in what is essentially a dynamic equilibrium with stable parameters. Evolutionary systems, however, by their very nature have unstable parameters. They are disequilibrium systems and in such systems our power of prediction, though not zero, is very limited because of the unpredictability of the parameters themselves. If, of course, it were possible to predict the change in the parameters, then there would be other parameters which were unchanged, but the search for ultimately stable parameters in evolutionary systems is futile, for they probably do not exist... Social systems have Heisenberg principles all over the place, for we cannot predict the future without changing it. There is a fundamental theorem in information theory that says information has to be surprising. Equilibrium can't exist in a system in which information is an essential element. The parameters are always changing. I describe econometrics as the attempt to find the celestial mechanics of non-existent universes | https://en.wikipedia.org/wiki?curid=872384 |
Kenneth Boulding's evolutionary perspective (1991) Biological evolution gives considerable emphasis to the ability of organisms to adapt to unpredictable change—their survival value. In his words, Boulding's observation or conjecture was made prior to widespread adoption of the same idea by economists in the eighties following work done in psychology in the seventies for which a Nobel prize was awarded in 2002. | https://en.wikipedia.org/wiki?curid=872384 |
Theory of value (economics) A theory of value is any economic theory that attempts to explain the exchange value or price of goods and services. Key questions in economic theory include why goods and services are priced as they are, how the value of goods and services comes about, and—for normative value theories—how to calculate the "correct" price of goods and services (if such a value exists). A major question that has eluded economists since the earliest of publications was one of price. As commodities began to be exchanged for currency, economic thinkers have constantly been trying to decipher how prices are determined. “Value” was the general term assigned indicate the relative price of a good or service. One of the earliest predecessors of classical views on value theory comes from a pamphlet that was published in 1738. In this pamphlet, it is discussed how labor is the most important measurement tool when considering value. This idea stemmed from pre-monetary views of price, where labor was exchanged for other labor services. While this was an accepted idea, it was not without its critics. Theory of value has evolved over time due to the work of several economic theorists. St. Thomas Aquinas created a theory that states the value of a commodity depends on both the subjective utility and the cost of production | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) Scientific advancements in the seventeenth and eighteenth centuries inspired English economist William Petty in developing his labor theory of value where the amount of labor that goes into producing or supplying a product determines the value no matter the product. English economist Nicholas Barbon developed what he called a ‘time and place’ value that returned to subjective utility theory explaining that a product with no use has no value, making it dependent on the time and place it is being produced. Scottish economist John Law was the first economist to use both supply and demand in determining value in his attempt to outline the water/diamond paradox. During his work on the labor theory of value, British philosopher and political economist John Stuart Mill contributed the idea that supply and demand have a tendency to reach an equilibrium. Economists William Stanley Jevons, Carl Menger, and Léon Walras, all individually but simultaneously developed a marginal utility theory stating that value depends solely on the value that comes from a human’s mind and used this subjective theory to explain the water-diamond paradox. Walras also contributed a mathematical model that allowed economists to make predictions on how markets should behave. Alfred Marshall used Walras’ model and created a model that accounted for how time and changes in the economy affect the market. Adam Smith agreed with certain aspects of labor theory of value, but believed it did not fully explain price and profit | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) Instead, he proposed an ‘Adding-up Theory’ (or cost-of-production theory, to later develop into exchange value theory) that explained value was determined by several different factors, including wages and rents. This theory of value, according to Smith, best explained the natural prices in the market. While an underdeveloped theory at the time, it did offer an alternative to another popular value theory of the time. The utility theory of value was the belief that price and value were solely based on how much “use” an individual received from a commodity. However, this theory is rejected in Smith’s work "The Wealth of Nations". The famous “water-diamond” paradox questions this by examining the use in comparison to price of these goods. Water, while necessary for life, is far less expensive than diamonds, which have basically no use. Which value theory holds true divides economic thinkers, and is the base for many socioeconomic and political beliefs. Silvio Gesell denied value theory in economics. He thought that value theory is useless and prevents economics from becoming science and that a currency administration guided by value theory is doomed to sterility and inactivity. According to the intrinsic theory of value (also called "theory of objective value"), intrinsic value characterizes—in terms of the value—that something has “in itself”, or “its own sake”, or “in its own right”. It is an express to a concept other than the one just discussed | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) It is the value that an entity has in itself as well, for what it is, or as an end. This value is not physical, saying that this value is physical is the same as saying our minds are physical. The value does not exist as an object, however it is the properties of an object. The value is created through the valuer’s attitude or judgements. Moral judgement and decisions is a crucial part in this value. Intrinsic value actually cuts off our logical decision and makes us think only about what feels right to us, not anybody else because it is what we make it to be. If something has intrinsic value it has properties or features in virtue of which it is valuable, separated of anyone's attitudes or judgements. It includes other variables such as brand name, trademarks, and copyrights that are usually difficult to calculate and sometimes not accurately reflected in the market price. Intrinsic value is not what the investors are willing to pay, however, it is what the object is really worth. In classical economics, the labor theory of value asserts that the economic value of a good or service is determined by the total amount of socially necessary labor required to produce it. When speaking in terms of a labor theory of value, value without any qualifying adjective theoretically refers to the amount of labor necessary for the production of a marketable commodity, including the labor necessary for the development of any capital used in the production process | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) Both David Ricardo and Karl Marx attempted to quantify and embody all labor components in order to develop a theory of the real, or natural, price of a commodity. In either case, what is being addressed are general prices—i.e., prices in the aggregate, not a specific price of a particular good or service in a given circumstance. Theories in either class allow for deviations when a particular price is struck in a real-world market transactions, or when a price is set in some price fixing regime. In Marxian economics, the exchange theory of value, proposed by I. I. Rubin (1927), is a description of the dual contrary nature of the labor contained in the commodity. The commodity has at the same time, both a subjective material use value and an objective exchange value or social value. The use value is the value of a material by the utility, use or consumption, and in which a thing meets human needs. An example of this is if someone wants to build a wooden shed they would need a certain quantity and quality of wood and nails. Some use value takes no effort to attain, for example the sun, or something like gravity both which humans need to survive but do not need to do anything to obtain and still have value. Other use values do require effort to attain, increasing their use value. The needs an object fulfills and the physical properties, as in the uses to which the object can be put to work on, also tie in with the use value | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) Marxian economist John Milios (2003) argues for a monetary theory of value, where "Money is the necessary form of appearance of value (and of capital) in the sense that prices constitute the only form of appearance of the value of commodities." According to this analysis, when money incorporates production into its M-C-M' circulation, it functions as capital implementing the capitalist relation and the exploitation of labor power constitutes the actual presupposition for this incorporation. Radical institutional economists Jonathan Nitzan and Shimshon Bichler (2009) argue that it was never possible to separate economics from politics. This separation is required to allow for neoclassical economics to base their theory on utility value and for Marxists to base the labour theory of value on quantified abstract labour. Instead of a utility theory of value (like neoclassical economics) or a labour theory of value (as found in Marxian economics), Nitzan and Bichler propose a power theory of value. The structure of prices has little to do with the so-called "material" sphere of production and consumption. The quantification of power in prices is not the consequence of external laws—whether natural or historical—but entirely internal to society. In capitalism, power is the governing principle as rooted in the centrality of private ownership. Private ownership is wholly and only an act of institutionalized exclusion, and institutionalized exclusion is a matter of organized power | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) And since the power behind private ownership is denominated in prices, Nitzan and Bichler argue, there is a need for a power theory of value. There is, however, a causality dilemma to their argument that has drawn criticism: power is based on the ability of firms to set monopoly prices yet the ability to set prices is based on firms possessing a degree of power in the market. Capitalization, in their theory, is a measure of power, as illuminated through the present discounted value of future earnings (while also taking into account hype and risk). This formula is basic to finance which is the overarching logic of capitalism. The logic is also inherently differential as every capitalist strives to accumulate greater earnings than their competitors (but not profit maximization). Nitzan and Bichler label this process differential accumulation. In order to have a power theory of value there needs to be differential accumulation where some owners' rate of growth of capitalization is faster than the average pace of capitalization. The subjective theory of value is a theory of value that believes that an item’s value depends on the consumer. This theory states that an item’s value is not dependent on the labor that goes into a good, or any inherent property of the good. Instead, the subjective theory of value believes that a good’s value depends on the consumers wants and needs | https://en.wikipedia.org/wiki?curid=874882 |
Theory of value (economics) The consumer places a value on an item by determining the marginal utility, or additional satisfaction of one additional good, of that item and deciding what that means to them. The modern subjective theory of value was created by William Stanley Jevons, Léon Walras, and Carl Menger in the late 19th century. The subjective theory contradicted Karl Marx’s Labour Theory which stated an item's value depends on the labour that goes into production and not the ability to satisfy the consumer. The subjective theory of value helped answer the "diamond–water paradox," which many believed to be unsolvable. The diamond-water paradox questions why diamonds are so much more valuable than water when water is necessary for life. This paradox was answered by the subjective theory of value by realizing that water, in total, is more valuable than diamonds because the first few units are necessary for life. The key difference between water and diamonds is that water is more plentiful and diamonds are rare. Because of the availability, one additional unit of diamonds exceeds the value of one additional unit of water. Marginalism refers to the study of marginal theories and studies within economics. The topics included in marginalism are marginal utility, marginal rate of substitution, and opportunity costs. Marginalism can be applied to the subjective theory of value because the subjective theory takes into account the marginal utility of an item in order to put a value on it. | https://en.wikipedia.org/wiki?curid=874882 |
Small-numbers game In economics and decision theory, a small-numbers game is a situation in an oligopolistic market in which the actions of one player have direct unforeseeable consequences for other players. | https://en.wikipedia.org/wiki?curid=875076 |
Extensive stage Extensive stage, or by its full name, the "predominantly extensive stage of accumulation", pertains to one of the periodizations of capitalism, as proposed by Aglietta (1976). It is the first stage of capitalism. It is also known as the early stage. During the extensive stage, room exists for the growth of production and capitalist means of production, including wages and modes of labor. It is characterized by high rates of economic growth. When the extensive stage ends, it is followed by the intensive stage (intensive accumulation). Karl Marx described this stage as exhibited in England as "The so-called primitive accumulation". | https://en.wikipedia.org/wiki?curid=878063 |
Single tax A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. The idea of a single tax on land values was proposed independently by John Locke and Baruch Spinoza in the 17th century. The French physiocrats later coined the term "impôt unique" because of the unique characteristics of land and rent. Pierre Le Pesant, sieur de Boisguilbert and Sébastien Le Prestre de Vauban also recommended a single tax, but unlike the physiocrats, they rejected the claim that land has certain economic properties which make it uniquely suitable for taxation, so they instead proposed a flat tax on all incomes. In the late 19th and early 20th century, a populist single tax movement emerged which also sought to levy a single tax on the rental value of land and natural resources, but for somewhat different reasons. This "Single Tax" movement later became known as Georgism, after its most famous proponent Henry George. It proposed a simplified and equitable tax system that upholds natural rights and whose revenue is based exclusively on ground and natural resource rents, with no additional taxation of improvements such as buildings | https://en.wikipedia.org/wiki?curid=883642 |
Single tax Some libertarians advocate land value capture as a consistently ethical and non-distortionary means to fund the essential operations of government, the surplus rent being distributed as a type of guaranteed basic income, traditionally called the citizen's dividend, to compensate those members of society who by legal title have been deprived of an equal share of the earth's spatial value and equal access to natural opportunities. (See "geolibertarianism") Related taxes derived in principle from the land value tax include Pigouvian taxes to internalize the external costs of pollution more efficiently than litigation, as well as severance taxes on raw material extraction to regulate the depletion of unreplenishable natural resources and to prevent irreparable damage to valuable ecosystems through unsustainable practices such as overfishing. The taxation of land values also generally applies to the electromagnetic spectrum. There have been other proposals for a single tax concerning property, goods, or income. More recently others have made proposals for a single tax based on other revenue models, such as the FairTax proposal for a consumption tax and various flat tax proposals on personal incomes. | https://en.wikipedia.org/wiki?curid=883642 |
Stock and flow Economics, business, accounting, and related fields often distinguish between quantities that are stocks and those that are flows. These differ in their units of measurement. A "stock" is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A "flow" variable is measured over an interval of time. Therefore, a flow would be measured "per unit of time" (say a year). Flow is roughly analogous to rate or speed in this sense. For example, U.S. nominal gross domestic product refers to a total number of dollars spent over a time period, such as a year. Therefore, it is a flow variable, and has units of dollars/year. In contrast, the U.S. nominal capital stock is the total value, in dollars, of equipment, buildings, and other real productive assets in the U.S. economy, and has units of dollars. The diagram provides an intuitive illustration of how the "stock" of capital currently available is increased by the "flow" of new investment and depleted by the "flow" of depreciation. Thus, a stock refers to the value of an asset at a balance date (or point in time), while a flow refers to the total value of transactions (sales or purchases, incomes or expenditures) during an accounting period. If the flow value of an economic activity is divided by the average stock value during an accounting period, we obtain a measure of the number of turnovers (or rotations) of a stock in that accounting period | https://en.wikipedia.org/wiki?curid=888140 |
Stock and flow Some accounting entries are normally always represented as a flow (e.g. profit or income), while others may be represented both as a stock or as a flow (e.g. capital). A person or country might have stocks of money, financial assets, liabilities, wealth, real means of production, capital, inventories, and human capital (or labor power). Flow magnitudes include income, spending, saving, debt repayment, fixed investment, inventory investment, and labor utilization. These differ in their units of measurement. Capital is a stock concept which yields a periodic income which is a flow concept. Stocks and flows have different units and are thus not "commensurable" – they cannot be meaningfully "compared, equated, added, or subtracted." However, one may meaningfully take "ratios" of stocks and flows, or multiply or divide them. This is a point of some confusion for some economics students, as some confuse taking ratios (valid) with comparing (invalid). The ratio of a stock over a flow has units of (units)/(units/time) = time. For example, the debt to GDP ratio has units of years (as GDP is measured in, for example, dollars per year whereas debt is measured in dollars), which yields the interpretation of the debt to GDP ratio as "number of years to pay off all debt, assuming all GDP devoted to debt repayment". The ratio of a flow to a stock has units 1/time. For example, the velocity of money is defined as nominal GDP / nominal money supply; it has units of (dollars / year) / dollars = 1/year | https://en.wikipedia.org/wiki?curid=888140 |
Stock and flow In discrete time, the change in a stock variable from one point in time to another point in time one time unit later (the first difference of the stock) is equal to the corresponding flow variable per unit of time. For example, if a country's stock of physical capital on January 1, 2010 is 20 machines and on January 1, 2011 is 23 machines, then the flow of net investment during 2010 was 3 machines per year. If it then has 27 machines on January 1, 2012, the flow of net investment during 2010 and 2011 averaged formula_1 machines per year. In continuous time, the time derivative of a stock variable is a flow variable. Stocks and flows also have natural meanings in many contexts outside of economics, business and related fields. The concepts apply to many conserved quantities such as energy, and to materials such as in stoichiometry, water reservoir management, and greenhouse gases and other durable pollutants that accumulate in the environment or in organisms. Climate change mitigation, for example, is a fairly straightforward stock and flow problem with the primary goal of reducing the stock (the concentration of durable greenhouse gases in the atmosphere) by manipulating the flows (reducing inflows such as greenhouse gas emissions into the atmosphere, and increasing outflows such as carbon dioxide removal) | https://en.wikipedia.org/wiki?curid=888140 |
Stock and flow In living systems, such as the human body, energy homeostasis describes the linear relationship between flows (the food we eat and the energy we expend along with the wastes we excrete) and the stock (manifesting as our gain or loss of body weight over time). In Earth system science, many stock and flow problems arise, such as in the carbon cycle, the nitrogen cycle, the water cycle, and Earth's energy budget. Thus stocks and flows are the basic building blocks of system dynamics models. Jay Forrester originally referred to them as "levels" (for stocks) and "rates" (for flows). A stock (or "level variable") in this broader sense is some entity that is accumulated over time by inflows and/or depleted by outflows. Stocks can only be changed via flows. Mathematically a stock can be seen as an accumulation or integration of flows over time – with outflows subtracting from the stock. Stocks typically have a certain value at each moment of time – e.g. the number of population at a certain moment, or the quantity of water in a reservoir. A flow (or "rate") changes a stock over time. Usually we can clearly distinguish inflows (adding to the stock) and outflows (subtracting from the stock). Flows typically are measured over a certain interval of time – e.g., the number of births over a day or month. Synonyms If the quantity of some "stock" variable at time formula_2 is formula_3, then the derivative formula_4 is the "flow" of changes in the stock | https://en.wikipedia.org/wiki?curid=888140 |
Stock and flow Likewise, the "stock" at some time "t" is the integral of the "flow" from some time when the time was zero until time "t". For example, if the capital stock formula_5 is increased gradually over time by a flow of gross investment formula_6 and decreased gradually over time by a flow of depreciation formula_7, then the instantaneous rate of change in the capital stock is given by where the notation formula_9 refers to the flow of net investment, which is the difference between gross investment and depreciation. Equations that change the two stocks via the flow are: List of all the equations, in their order of execution in each time, from time = 1 to 36: The distinction between a stock and a flow variable is elementary, and dates back centuries in accounting practice (distinction between an asset and income, for instance). In economics, the distinction was formalized and terms were set in , in which Irving Fisher formalized capital (as a stock). Polish economist Michał Kalecki emphasized the centrality of the distinction of stocks and flows, caustically calling economics "the science of confusing stocks with flows" in his critique of the quantity theory of money (circa 1936, frequently quoted by Joan Robinson). | https://en.wikipedia.org/wiki?curid=888140 |
War chest A war chest is a metaphor for any collection of tools or money intended to be used in a challenging or dangerous situation. Historically, it referred to the chest located in the homes or barracks of soldiers, in which the soldier kept arms and armor. In the modern era, it more often refers to a collection of funds (or less occasionally special tools or equipment) intended to allow a person or organization to get through a situation that requires much more readiness or money than usual. In arms and armor, a war chest is a container for the personal weapons and protective gear of a citizen-soldier, kept in the household, and is the origin of the term. The term's modern meaning originates with the medieval practice of having a chest, literally, filled with money to open in time of war. In politics, a war chest is funding obtained from donors well in advance of a campaign, usually accumulated by an incumbent for either re-election or to contest a more advanced office, or provided by a wealthy candidate to their own campaign. The possession of such excess funds may discourage otherwise viable candidates from a primary or general election challenge. For example, former governor of Louisiana Huey Long asked anyone working for him to donate a small portion of their salary to his war chest to fund his personal projects. In business a war chest, or cash mountain is a stash of money set aside to deal with unexpected changes in the business environment, or to use when expansion possibilities arise | https://en.wikipedia.org/wiki?curid=888187 |
War chest Today companies can use accumulated cash or rely on quickly raised debt which costs less to carry when you don't need it. This is not always a reasonable substitute, as the credit available to a company typically drops as a result of the same actions that require the war chest to be opened. Companies can redistribute their war chests to shareholders by issuing larger or special dividends, or more commonly through share buyback operations. Companies do this because if actually held in cash, the companies will be earning a low rate of return in the money markets, whereas they could be using the funds to invest in more profitable projects. If they continue not to invest the funds, shareholders may sell the company's shares and make it vulnerable to a takeover. This would place the current management's jobs at risk. In Association football it refers to the amount of money a manager has been given by a club's chairman, owner or investors to acquire new players, as in the newspaper headline, "Defoe and Brown top Keegan wishlist as Ashley grants £25m war chest". Similar terms are also referred to as surplus cash, cash reserves, emergency reserves, acquisition funds, rainy day funds, or undistributed earnings within different contexts. | https://en.wikipedia.org/wiki?curid=888187 |
Liberty Seguros is an international subsidiary of Liberty Mutual Group, a Boston-based insurance company. sponsored the UCI ProTour cycling team, – Würth, but dropped the sponsorship on 25 May 2006 due to the Operación Puerto doping case, involving the team manager Manolo Saiz. They also sponsored a smaller continental cycling team based in Portugal, but dropped the sponsorship for this also in September 2009, when three members of the team failed drugs tests simultaneously. in Brazil was a sponsor of the 2014 FIFA World Cup. | https://en.wikipedia.org/wiki?curid=888425 |
Unto This Last is an essay and book on economy by John Ruskin, first published between August and December 1860 in the monthly journal "Cornhill Magazine" in four articles. Ruskin says himself that the articles were "very violently criticized", forcing the publisher to stop its publication after four months. Subscribers sent protest letters, but Ruskin countered the attack and published the four articles in a book in May 1862. The book greatly influenced the nonviolent activist Mohandas Gandhi. The title is a quotation from the Parable of the Workers in the Vineyard: The "last" are the eleventh hour labourers, who are paid as if they had worked the entire day. Rather than discuss the contemporary religious interpretation of the parable, whereby the eleventh hour labourers would be death-bed converts, or the peoples of the world who come late to religion, Ruskin looks at the social and economic implications, discussing issues such as who should receive a living wage. This essay is very critical of capitalist economists of the 18th and 19th centuries. In this sense, Ruskin is a precursor of social economy. Because the essay also attacks the destructive effects of industrialism upon the natural world, some historians have seen it as anticipating the Green movement. The essay begins with the following verses, taken from Matthew 20:13 and Zechariah 11:12 respectively (in the King James Version): <poem> Friend, I do thee no wrong. Didst not thou agree with me for a penny? Take that thine is, and go thy way | https://en.wikipedia.org/wiki?curid=893649 |
Unto This Last I will give unto this last even as unto thee. If ye think good, give me my price; And if not, forbear. So they weighed for my price thirty pieces of silver. </poem> "Unto This Last" had a very important impact on Gandhi's philosophy. He discovered the book in March 1904 through Henry Polak, whom he had met in a vegetarian restaurant in South Africa. Polak was sub-editor of the Johannesburg paper "The Critic". Gandhi decided immediately not only to change his own life according to Ruskin's teaching, but also to publish his own newspaper, "Indian Opinion", from a farm where everybody would get the same salary, without distinction of function, race, or nationality. This, for that time, was quite revolutionary. Thus Gandhi created Phoenix Settlement. Mohandas Gandhi translated "Unto This Last" into Gujarati in 1908 under the title of "Sarvodaya" ("Well Being of All"). Valji Govindji Desai translated it back to English in 1951 under the title of "Unto This Last: A Paraphrase". This last essay can be considered his program on economics, as in "Unto This Last", Gandhi found an important part of his social and economic ideas. | https://en.wikipedia.org/wiki?curid=893649 |
Neo-Ricardianism The neo-Ricardian school is an economic school that derives from the close reading and interpretation of David Ricardo by Piero Sraffa, and from Sraffa's critique of neo-classical economics as presented in his "The Production of Commodities by Means of Commodities", and further developed by the neo-Ricardians in the course of the Cambridge capital controversy. It particularly disputes neo-classical theory of income distribution. Prominent neo-Ricardians are usually held to include Pierangelo Garegnani, Krishna Bharadwaj, Luigi Pasinetti, Joan Robinson, John Eatwell, Fernando Vianello, Murray Milgate, Ian Steedman, Heinz D. Kurz, Neri Salvadori, Bertram Schefold, Fabio Petri, Massimo Pivetti, Franklin Serrano, Fabio Ravagnani, Roberto Ciccone, Sergio Parrinello, Alessandro Roncaglia, Maurice Dobb, Gilbert Abraham-Frois, Theodore Mariolis and Giorgio Gilibert. The school partially overlaps with post-Keynesian and neo-Marxian economics. | https://en.wikipedia.org/wiki?curid=893867 |
The Global Trap Die Globalisierungsfalle: Der Angriff auf Demokratie und Wohlstand is a 1996 non-fiction book by Hans-Peter Martin (born 1957 in Bregenz, Austria), and Harald Schumann (born 1957 in Kassel, Germany), that describes possible implications of current trends in globalization. It was published in English as The Global Trap: Globalization and the Assault on Democracy and Prosperity in 1997. At this time, both authors were editors of the news magazine "Der Spiegel". From 1999 to 2014, Hans-Peter Martin, who is stated in the book to be one of just three journalists to be allowed to take part in all activities at the Fairmont convention, was a member of the European Parliament. The book was a best-seller in the authors‘ native Austria and Germany and went on to be a worldwide bestseller with over 800,000 copies sold and translated into 27 languages. In particular, the book is known for defining a possible "20/80 society". In this possible society of the 21st century, 20 percent of the working age population will be enough to keep the world economy going. The other 80 percent live on some form of welfare and are entertained with a concept called "tittytainment", which aims at keeping the 80 percent of frustrated citizens happy with a mixture of deadeningly predictable, lowest common denominator entertainment for the soul and nourishment for the body. The book deals mainly with the effects of globalization | https://en.wikipedia.org/wiki?curid=896352 |
The Global Trap It describes a growing social divide as a result of "delimitation" of the economy and a loss of political control by the state over the economic development, which is increasingly controlled by global corporations. The authors warn of a so-called "20-to-80-society". They describe how a global 80:20 distribution already exists in many aspects, and illustrate possible economic, social and political consequences of free trade and deregulated financial markets. In the beginning, they describe how at a conference at the invitation of Mikhail Gorbachev with 500 leading politicians, business leaders and academics from all continents from September 27 - October 1, 1995 at the Fairmont Hotel in San Francisco, the term "one-fifth-society" arose. The authors describe an increase in productivity caused by the decrease in the amount of work, so this could be done by one-fifth of the global labor force and leave four-fifths of the working age people out of work. The authors predict huge number of unemployed, perhaps finding themselves in low-paid voluntary community services to boost their morale. | https://en.wikipedia.org/wiki?curid=896352 |
Eurocurrency is currency held on deposit outside its home market, i.e., held in banks located outside of the country which issues the currency. For example, a US dollar denominated deposit in a Singapore bank is Eurocurrency, or more specifically Eurodollar deposit. The "Euro-" prefix can be applied to any combination of deposits and financial institution. For example, a deposit denominated in Euros held in a Brazilian bank is a "Euroeuro" deposit. is used as a source of short- or medium-term finance, especially in international trade, because of easy convertibility. does not have to involve either the euro currency or the eurozone as the term predates the creation of the euro. and Eurobond markets avoid domestic interest rate regulations, reserve requirements and other barriers to the free flow of capital. The four main Eurocurrencies are the US dollar, the Euro, the British pound and the Japanese yen; the currencies of the major economies of the world. A eurobank is a financial institution anywhere in the world which accepts deposits or makes loans in any foreign currency. Eurocredit is a loan whose denominated currency is not the lending bank's national currency. A eurocredit loan would be made by a U.S. bank to a lender requiring a denominated currency which differs from the bank's local currency (USD) for specific reasons, most likely some sort of business operations or trade requirements. Despite the inclusion of the word "euro," a eurocredit is not immediately derived from the euro | https://en.wikipedia.org/wiki?curid=897015 |
Eurocurrency Eurocredits are short-to-medium-term loans of extended by Eurobanks to corporations, sovereign governments, nonprime banks, or international organizations. The loans are denominated in currencies other than the home currency of the Eurobank. Because these loans are frequently too large for a single bank to handle, Eurobanks will band together to form a bank lending syndicate to share the risk. The credit risk on these loans is greater than on loans to other banks in the interbank market. Thus, the interest rate on Eurocredits must compensate the bank, or banking syndicate, for the added credit risk. On Eurocredits originating in London the base lending rate is LIBOR. The lending rate on these credits is stated as LIBOR +X percent, where X is the lending margin charged depending upon the creditworthiness of the borrower. Additionally, rollover pricing was created on Eurocredits so that Eurobanks do not end up paying more on time deposits than they earn from the loans. Thus, a Eurocredit may be viewed as a series of short-term loans, where at the end of each time period (generally three or six months), the loan is rolled over and the base lending rate is repriced to current LIBOR over the next time interval of the loan. | https://en.wikipedia.org/wiki?curid=897015 |
Market-based valuation A is a form of stock valuation that refers to market indicators, also called extrinsic criteria (i.e. not related to economic fundamentals and account data, which are intrinsic criteria). Technical analysis is the most characteristic market-based method, although it focuses more on timing than pricing. Also, rough market comparison tools such as the PE ratio and the PEG ratio are used. More sophisticated forms of analysis (fundamental analysis, quantitative analysis, and behavioral analysis) use also some market criteria, such as the risk premium or beta coefficient. Those criteria might be "tilted" in some valuation models in anticipation of their possible variation in the next future, or to adapt them to their historical statistical range or mean. | https://en.wikipedia.org/wiki?curid=897547 |
Macroeconomic model A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices. Macroeconomic models may be logical, mathematical, and/or computational; the different types of macroeconomic models serve different purposes and have different advantages and disadvantages. Macroeconomic models may be used to clarify and illustrate basic theoretical principles; they may be used to test, compare, and quantify different macroeconomic theories; they may be used to produce "what if" scenarios (usually to predict the effects of changes in monetary, fiscal, or other macroeconomic policies); and they may be used to generate economic forecasts. Thus, macroeconomic models are widely used in academia in teaching and research, and are also widely used by international organizations, national governments and larger corporations, as well as by economic consultants and think tanks. Simple textbook descriptions of the macroeconomy involving a small number of equations or diagrams are often called ‘models’. Examples include the IS-LM model and Mundell–Fleming model of Keynesian macroeconomics, and the Solow model of neoclassical growth theory. These models share several features | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model They are based on a few equations involving a few variables, which can often be explained with simple diagrams. Many of these models are static, but some are dynamic, describing the economy over many time periods. The variables that appear in these models often represent macroeconomic aggregates (such as GDP or total employment) rather than individual choice variables, and while the equations relating these variables are intended to describe economic decisions, they are not usually derived directly by aggregating models of individual choices. They are simple enough to be used as illustrations of theoretical points in introductory explanations of macroeconomic ideas; but therefore quantitative application to forecasting, testing, or policy evaluation is usually impossible without substantially augmenting the structure of the model. In the 1940s and 1950s, as governments began accumulating national income and product accounting data, economists set out to construct quantitative models to describe the dynamics observed in the data. These models estimated the relations between different macroeconomic variables using (mostly linear) time series analysis. Like the simpler theoretical models, these empirical models described relations between aggregate quantities, but many addressed a much finer level of detail (for example, studying the relations between output, employment, investment, and other variables in many different industries) | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model Thus, these models grew to include hundreds or thousands of equations describing the evolution of hundreds or thousands of prices and quantities over time, making computers essential for their solution. While the choice of which variables to include in each equation was partly guided by economic theory (for example, including past income as a determinant of consumption, as suggested by the theory of adaptive expectations), variable inclusion was mostly determined on purely empirical grounds. Dutch economist Jan Tinbergen developed the first comprehensive national model, which he built for the Netherlands in 1936. He later applied the same modeling structure to the economies of the United States and the United Kingdom. The first global macroeconomic model, Wharton Econometric Forecasting Associates' LINK project, was initiated by Lawrence Klein. The model was cited in 1980 when Klein, like Tinbergen before him, won the Nobel Prize. Large-scale empirical models of this type, including the Wharton model, are still in use today, especially for forecasting purposes. Econometric studies in the first part of the 20th century showed a negative correlation between inflation and unemployment called the Phillips curve. Empirical macroeconomic forecasting models, being based on roughly the same data, had similar implications: they suggested that unemployment could be permanently lowered by permanently increasing inflation. However, in 1968, Milton Friedman and Edmund Phelps argued that this apparent tradeoff was illusory | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model They claimed that the historical relation between inflation and unemployment was due to the fact that past inflationary episodes had been largely unexpected. They argued that if monetary authorities permanently raised the inflation rate, workers and firms would eventually come to understand this, at which point the economy would return to its previous, higher level of unemployment, but now with higher inflation too. The stagflation of the 1970s appeared to bear out their prediction. In 1976, Robert Lucas, Jr., published an influential paper arguing that the failure of the Phillips curve in the 1970s was just one example of a general problem with empirical forecasting models. He pointed out that such models are derived from observed relationships between various macroeconomic quantities over time, and that these relations differ depending on what macroeconomic policy regime is in place. In the context of the Phillips curve, this means that the relation between inflation and unemployment observed in an economy where inflation has usually been low in the past would differ from the relation observed in an economy where inflation has been high. Furthermore, this means one cannot predict the effects of a new policy regime using an empirical forecasting model based on data from previous periods when that policy regime was not in place | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model Lucas argued that economists would remain unable to predict the effects of new policies unless they built models based on economic fundamentals (like preferences, technology, and budget constraints) that should be unaffected by policy changes. Partly as a response to the Lucas critique, economists of the 1980s and 1990s began to construct microfounded macroeconomic models based on rational choice, which have come to be called dynamic stochastic general equilibrium (DSGE) models. These models begin by specifying the set of agents active in the economy, such as households, firms, and governments in one or more countries, as well as the preferences, technology, and budget constraint of each one. Each agent is assumed to make an optimal choice, taking into account prices and the strategies of other agents, both in the current period and in the future. Summing up the decisions of the different types of agents, it is possible to find the prices that equate supply with demand in every market. Thus these models embody a type of equilibrium self-consistency: agents choose optimally given the prices, while prices must be consistent with agents’ supplies and demands. DSGE models often assume that all agents of a given type are identical (i.e. there is a ‘representative household’ and a ‘representative firm’) and can perform perfect calculations that forecast the future correctly on average (which is called rational expectations) | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model However, these are only simplifying assumptions, and are not essential for the DSGE methodology; many DSGE studies aim for greater realism by considering heterogeneous agents or various types of adaptive expectations. Compared with empirical forecasting models, DSGE models typically have fewer variables and equations, mainly because DSGE models are harder to solve, even with the help of computers. Simple theoretical DSGE models, involving only a few variables, have been used to analyze the forces that drive business cycles; this empirical work has given rise to two main competing frameworks called the real business cycle model and the New Keynesian DSGE model. More elaborate DSGE models are used to predict the effects of changes in economic policy and evaluate their impact on social welfare. However, economic forecasting is still largely based on more traditional empirical models, which are still widely believed to achieve greater accuracy in predicting the impact of economic disturbances over time. A closely related methodology that pre-dates DSGE modeling is computable general equilibrium (CGE) modeling. Like DSGE models, CGE models are often microfounded on assumptions about preferences, technology, and budget constraints. However, CGE models focus mostly on long-run relationships, making them most suited to studying the long-run impact of permanent policies like the tax system or the openness of the economy to international trade | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model DSGE models instead emphasize the dynamics of the economy over time (often at a quarterly frequency), making them suited for studying business cycles and the cyclical effects of monetary and fiscal policy. Another modeling methodology which has developed at the same time as DSGE models is Agent-based computational economics (ACE), which is a variety of Agent-based modeling. Like the DSGE methodology, ACE seeks to break down aggregate macroeconomic relationships into microeconomic decisions of individual agents. ACE models also begin by defining the set of agents that make up the economy, and specify the types of interactions individual agents can have with each other or with the market as a whole. Instead of defining the preferences of those agents, ACE models often jump directly to specifying their strategies. Or sometimes, preferences are specified, together with an initial strategy and a learning rule whereby the strategy is adjusted according to its past success. Given these strategies, the interaction of large numbers of individual agents (who may be very heterogeneous) can be simulated on a computer, and then the aggregate, macroeconomic relationships that arise from those individual actions can be studied. DSGE and ACE models have different advantages and disadvantages due to their different underlying structures | https://en.wikipedia.org/wiki?curid=897740 |
Macroeconomic model DSGE models may exaggerate individual rationality and foresight, and understate the importance of heterogeneity, since the rational expectations, representative agent case remains the simplest and thus the most common type of DSGE model to solve. Also, unlike ACE models, it may be difficult to study local interactions between individual agents in DSGE models, which instead focus mostly on the way agents interact through aggregate prices. On the other hand, ACE models may exaggerate errors in individual decision-making, since the strategies assumed in ACE models may be very far from optimal choices unless the modeler is very careful. A related issue is that ACE models which start from strategies instead of preferences may remain vulnerable to the Lucas critique: a changed policy regime should generally give rise to changed strategies. | https://en.wikipedia.org/wiki?curid=897740 |
Neutral good In economics, neutral goods refers either to goods whose demand is independent of income, or those that have no change on the consumer's utility when consumed. Under the first definition, neutral goods have substitution effects but not income effects. Examples of this include prescription medicines such as insulin for diabetics. An individual's income may vary, but their consumption of vital medicines remains constant. The second definition says that a good is neutral if the consumer is ambivalent towards its consumption. That is, the consumption of that good neither increases nor decreases the consumer's utility. For example, if a consumer likes texting, but is neutral about the data package on his phone contract, then increasing the data allowance does not alter his utility. An indifference curve—constructed with data allowance on the Y axis and text allowance is on the X axis forms a vertical line. | https://en.wikipedia.org/wiki?curid=902789 |
Universe (economics) In economics and marketing a universe is a population to be studied or measured. In economics a population to be measured is described as a "universe", and the measures which are generated are intended to reflect the behavior of that population. Different statistical surveys may measure related, but different, universes and have to be adjusted to reflect this difference. For example, the American Bureau of Labor Statistics has a household survey and an establishment survey to measure employment. The differences in the populations and behavior that these two surveys measure are said to be the differences in their "universe". The word has a similar meaning in marketing, where it describes the activity in a given population. For example, ASCAP measures airplay in different radio "universes" to determine royalties for different songs, because e.g. air play in the "classical" universe is compensated differently from popular music. It also fundamental to television audience measurement: advertisers buy into programmes based on the ratings in different demographic universes and those different universes will cost different amounts. For example, a hair dye ad campaign may buy 1000 Gross Rating Points (GRP) in the Women 25-44 universe in order to target that particular audience, rather than a demographic irrelevant to their product. | https://en.wikipedia.org/wiki?curid=903351 |
Dirigisme or dirigism () is an economic doctrine in which the state plays a strong directive role as opposed to a merely regulatory or non-interventionist role over a capitalist market economy. As an economic doctrine, dirigisme is the opposite to laissez-faire, stressing a positive role for state intervention in curbing productive inefficiencies and market failures. Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies). The term emerged in the post-war era to describe the economic policies of France which included substantial state-directed investment, the use of indicative economic planning to supplement the market mechanism and the establishment of state enterprises in strategic domestic sectors. It coincided with the period of substantial economic and demographic growth known as the Trente Glorieuses which followed the war, but that did not prevent the slowdown beginning with the 1973 oil crisis. The term has subsequently been used to classify other economies that pursued similar policies, most notably the East Asian tiger economies and more recently the economy of the People's Republic of China. State capitalism is a related concept. Most modern economies can be characterized as dirigist to some degree as the state may exercise directive action by performing or subsidizing research and development of new technologies through government procurement (especially military) or through state-run research institutes | https://en.wikipedia.org/wiki?curid=909320 |
Dirigisme Before the Second World War, France had a relatively fragmented capitalist economic system. The many small companies, often family-owned, were often not dynamic and efficient in comparison to the large industrial groups in Germany or the United States. The Second World War laid waste to France. Railroads and industries were destroyed by aerial bombardment and sabotage; industries were seized by Nazi Germany; in the immediate postwar years loomed the spectre of long years of rationing (such as the system enforced in that period in the United Kingdom). Some sections of the French business and political world lost authority after collaborating with the German occupiers. Post-war French governments, from whichever political side, generally sought rational, efficient economic development, with the long-term goal of matching the highly developed and technologically advanced economy of the United States. The development of French dirigisme coincided with the development of meritocratic technocracy: the École Nationale d'Administration supplied the state with high-level administrators, while leadership positions in industry were staffed with Corps of Mines state engineers and other personnel trained at the École Polytechnique. During the 1945–1975 period, France experienced unprecedented economic growth (5.1% on average) and a demographic boom, leading to the coinage of the term "Trente Glorieuses" ("Thirty Glorious [years]"). flourished under the centre-right governments of Charles de Gaulle and Georges Pompidou | https://en.wikipedia.org/wiki?curid=909320 |
Dirigisme In those times, the policy was viewed as a middle way between the American policy of little state involvement and the Soviet policy of total state control. In 1981, Socialist president François Mitterrand was elected, promising greater state enterprise in the economy; his government soon nationalised industries and banks. However, in 1983 the initial bad economic results forced the government to renounce dirigisme and start the era of "rigueur" ("rigour"). has remained out of favour with subsequent governments, though some of its traits remain. The main French tool under dirigisme was indicative planning through plans designed by the "Commissariat général du plan" ("Commission for the Plan"). Indicative planning used various incentives to induce public and private actors to behave in an optimal fashion, with the plan serving as a general guideline for optimal investment. During this period France never ceased to be a capitalist economy directed by the accumulation of capital, profit-maximizing enterprise and market-based allocation of producer goods. In contrast to Soviet-type central planning practiced in the former Soviet bloc, where economic planning substituted market allocation and operated the factors of production according to a binding plan, the French state never owned more than a minority of industry and did not seek to replace markets with planning | https://en.wikipedia.org/wiki?curid=909320 |
Dirigisme The idea of dirigisme is to complement and improve the efficiency of the market through indirect planning intended to provide better information to market participants. This concept is held in contrast to a planned economy, which aims to replace market-based allocation of production and investment with a binding plan of production expressed in units of physical quantities. Because French industry prior to the Second World War was weak due to fragmentation, the French government encouraged mergers and the formation of "national champions": large industry groups backed by the state. Two areas where the French government sought greater control were in infrastructure and the transportation system. The French government owned the national railway company SNCF, the national electricity utility EDF, the national natural gas utility GDF, the national airline Air France; phone and postal services were operated as the PTT administration. The government chose to devolve the construction of most autoroutes (freeways) to semi-private companies rather than to administer them itself. Other areas where the French government directly intervened were defense, nuclear and aerospace industries (Aérospatiale). This development was marked by "volontarisme", the belief that difficulties (e.g. postwar devastation, lack of natural resources) could be overcome through willpower and ingenuity. For instance, following the 1973 energy crisis, the saying "In France we don't have oil, but we have ideas" was coined | https://en.wikipedia.org/wiki?curid=909320 |
Dirigisme Volontarisme emphasized modernization, resulting in a variety of ambitious state plans. Examples of this trend include the extensive use of nuclear energy (close to 80% of French electrical consumption), the Minitel, an early online system for the masses, and the TGV, a high-speed rail network. Economic dirigisme has been described as an inherent aspect of fascist economies by Hungarian author, Iván T. Berend in his book "An Economic History of Twentieth-Century Europe". However, the Fascist systems created by Benito Mussolini (Italy), António Salazar (Portugal), Francisco Franco (Spain) Emperor Hirohito (Japan), and Adolf Hitler (Germany) are a varied mix of elements from numerous philosophies, including: nationalism, authoritarianism, militarism, corporatism, collectivism, totalitarianism, and anti-communism. has been brought up as a politico-economic scheme at odds with "laissez-faire" capitalism in the context of French overseas holdings. Countries such as Lebanon and Syria have been influenced by this motif to varying degrees throughout the post-colonial period. The economies of the East Asian tigers are sometimes characterised as being "dirigiste" due to the strong role played by the state in development planning and guiding investment.. is also seen in India. The state has complete control and ownership of railways; majority control and stake in banking, insurance, electricity, and oil and gas industries; and has substantial control over telecommunication, port and shipping industries. | https://en.wikipedia.org/wiki?curid=909320 |
Reserve requirement The reserve requirement (or cash reserve ratio) is a central bank regulation employed by most, but not all, of the world's central banks, that sets the minimum amount of reserves that must be held by a commercial bank. The minimum reserve is generally determined by the central bank to be no less than a specified percentage of the amount of deposit liabilities the commercial bank owes to its customers. The commercial bank's reserves normally consist of cash owned by the bank and stored physically in the bank vault (vault cash), plus the amount of the commercial bank's balance in that bank's account with the central bank. The required reserve ratio is sometimes used as a tool in monetary policy, influencing the country's borrowing and interest rates by changing the amount of funds available for banks to make loans with. Western central banks rarely increase the reserve requirements because it would cause immediate liquidity problems for banks with low excess reserves; they generally prefer to use open market operations (buying and selling government-issued bonds) to implement their monetary policy. The People's Bank of China uses changes in reserve requirements as an inflation-fighting tool, and raised the reserve requirement ten times in 2007 and eleven times since the beginning of 2010. An institution that holds reserves in excess of the required amount is said to hold "excess reserves". The theory that a reserve requirement can be used as a tool of monetary policy is frequently found in economics textbooks | https://en.wikipedia.org/wiki?curid=911658 |
Reserve requirement Under the theory, the higher the reserve requirement is set, the less funds banks will have available to lend out, leading to lower money creation and perhaps to higher purchasing power of the money previously in use. Under this view, the effect is multiplied, because money obtained as loan proceeds can be re-deposited, and a portion of those deposits may again be lent out, and so on. Under this theory, the effect on the money supply is governed by the following formulas: where notationally, However, in the United States (and other countries except Brazil, China, India, Russia), the reserve requirements are generally not frequently altered to implement monetary policy because of the short-term disruptive effect on financial markets. Some economists dispute the conventional theory of the reserve requirement. Criticisms of the conventional theory are usually associated with theories of endogenous money. Jaromir Benes and Michael Kumhof of the IMF Research Department report that the "deposit multiplier" of the undergraduate economics textbook, where monetary aggregates are created at the initiative of the central bank, through an initial injection of high-powered money into the banking system that gets multiplied through bank lending, turns the actual operation of the monetary transmission mechanism on its head. Benes and Kumhof assert that in most cases where banks ask for replenishment of depleted reserves, the central bank obliges | https://en.wikipedia.org/wiki?curid=911658 |
Reserve requirement Under this view, reserves therefore impose no constraints, as the deposit multiplier is simply, in the words of Kydland and Prescott (1990), a myth. Under this theory, private banks almost fully control the money creation process. In the United States, a reserve requirement (or liquidity ratio) is a minimum value, set by the Board of Governors of the Federal Reserve System, of the ratio of required reserves to a category of deposit liabilities (called the "Net Transaction Accounts" or "NTAs") owed by depository institutions to their customers (e.g., owed by commercial banks including U.S. branches of a foreign bank, savings and loan association, savings bank, credit union). The deposit liability categories currently subject to reserve requirements are mainly checking accounts. There is no reserve requirement on savings accounts and time deposit accounts owned by individuals. The total amount of all NTAs held by customers with U.S. depository institutions, plus the U.S. paper currency and coin currency held by the nonbank public, is called M1. As of March 2020, the minimum reserve requirement for all deposit institutions was abolished, or more technically, fixed to zero percent of eligible deposits. The Board previously mandated a zero reserve requirement for banks with eligible deposits up to $16 million, 3% for banks up to $122.3 million, and 10% thereafter | https://en.wikipedia.org/wiki?curid=911658 |
Reserve requirement The removal of reserve requirements followed the Federal Reserve's shift to an "ample-reserves" system, in which the Federal Reserve Banks pay member banks interest on reserves that they keep in excess of the required amount. The International Banking Act of 1978 required branches of foreign banks operating in the United States to follow the same required reserve ratio standards. Canada, the UK, New Zealand, Australia, Sweden and Hong Kong have no reserve requirements. This does not mean that banks can—even in theory—create money without limit. On the contrary, banks are constrained by capital requirements, which are arguably more important than reserve requirements even in countries that have reserve requirements. It also does not mean that a commercial bank's overnight reserves can become "negative", in these countries. The central bank will "always" step in to lend the necessary reserves if necessary so that this does not happen; this is sometimes described as "defending the payment system". Historically a central bank might once have run out of reserves to lend and so have had to suspend redemptions, but this can no longer happen to modern central banks because of the end of the gold standard worldwide, which means that all nations use a fiat currency. A zero reserve requirement cannot be explained by a theory that holds that monetary policy works by varying the quantity of money using the reserve requirement | https://en.wikipedia.org/wiki?curid=911658 |
Reserve requirement Even in the United States, which retains formal (though now mostly irrelevant) reserve requirements, the notion of controlling the money supply by targeting the quantity of base money fell out of favor many years ago, and now the pragmatic explanation of monetary policy refers to targeting the "interest rate" to control the broad money supply. (See also Regulation D (FRB).) In the UK the term clearing banks is sometimes used, meaning banks that have direct access to the clearing system. However, for the purposes of clarity, the term "commercial banks" will be used for the remainder of this section. The Bank of England, which is the central bank for the entire United Kingdom, previously held to a voluntary reserve ratio system, with no minimum reserve requirement set. In theory this meant that commercial banks could retain zero reserves. The average cash reserve ratio across the entire United Kingdom banking system, though, was higher during that period, at about 0.15% . From 1971 to 1980, the commercial banks all agreed to a reserve ratio of 1.5%. In 1981 this requirement was abolished. From 1981 to 2009, each commercial bank set out its own monthly voluntary reserve target in a contract with the Bank of England. Both shortfalls and excesses of reserves relative to the commercial bank's own target over an averaging period of one day would result in a charge, incentivising the commercial bank to stay near its target, a system known as "reserves averaging" | https://en.wikipedia.org/wiki?curid=911658 |
Reserve requirement Upon the parallel introduction of quantitative easing and interest on excess reserves in 2009, banks were no longer required to set out a target, and so were no longer penalised for holding excess reserves; indeed, they were proportionally compensated for holding all their reserves at the Bank Rate (the Bank of England now uses the same interest rate for its bank rate, its deposit rate and its interest rate target). In the absence of an agreed target, the concept of excess reserves does not really apply to the Bank of England any longer, so it is technically incorrect to call its new policy "interest on excess reserves". Canada abolished its reserve requirement in 1992. Other countries have "required reserve ratios" (or RRRs) that are statutorily enforced: | https://en.wikipedia.org/wiki?curid=911658 |
Regional policy is the sum of a series of policies formulated according to regional differences to coordinate regional relations and regional macro operation mechanism, which affects regional development at the macro level. It includes regional economic policy, regional social policy, regional environmental policy, regional political policy, regional cultural policy, etc.aims to improve economic conditions in regions of relative disadvantage, either within a nation or within a supranational grouping such as the European Union. Additionally, a regional policy may try to address high levels of unemployment and lower-than-average per capita incomes. Its main tool is public investment. Although the European Union is one of the richest parts of the world, there are large internal disparities of income and opportunity between its regions. The May 2004 Enlargement, followed by accession of Bulgaria and Romania in January 2007, has widened these gaps. transfers resources from richer to poorer regions. “targets all regions and cities in the European Union in to support job creation, business competitiveness, economic growth, sustainable development, and improve citizens’ quality of life.” The argument for regional policy is that it is both an instrument of financial solidarity and a powerful force for economic integration. The major Italian experience of regional policy is the Cassa per il Mezzogiorno, set up in the mid-1950s to foster economic development in southern Italy | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy Originally intended to last for six months, it survived until 1984. New roads, irrigation projects and developments in infrastructure were built in an area where local communities had suffered seriously from poverty, de-population and high levels of emigration. Tourism projects attempted to exploit Calabria’s beaches. UK regional policy was born during the economic depression of the 1930s, when heavy industries in the north were devastated. "Assisted Areas" were established, within which companies could acquire grants or capital allowances – known as Regional Selective Assistance (RSA) – in return for protecting jobs. The overall pattern of policy changed little in the next forty years. Despite criticism by a 1970s Royal Commission that it was "Empiricism run mad; a game of hit and miss played with more enthusiasm than success", governments of both parties maintained Assisted Areas. Under the 1980s Thatcher government, regional policy was significantly rolled back, with Assisted Areas substantially reduced in size. The post-1997 Labour administration reorganised regional policy, with RSA replaced by Selective Finance for Investment in England and Scotland. UK policy has been subject to EU regional policy framework, with its strong injunctions against unfair competition (generally meaning state aid). In China, regional policy is delivered through multi-level governance that involves central government, provinces, counties, townships and villages | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy The key role in regional policy and regional development plays The Department of Regional Economy under the Chinese National Development and Reform Commission (NDRC).The development of regional policy in China can be divided into three stages. Balanced development in the early 30 years of New China (1949-1978) The balanced development policy implemented in the early 30 years of the founding of the People's Republic of China is a process of the top-down one-way directive plan. The central government uses the national financial resources to implement major projects (infrastructure, national defense), carry out investment and construction, and adjust and control the layout of productivity. From the spatial level, it carries out strategic planning, guidance and control characterized by the unity of regional development. It established a number of industrial bases with initial scale, and laid the foundation for China's industrialization construction. However, the industrial development at that time was mainly based on the needs of national security strategy. It was distributed in the scattered mountainous areas, with the priority given to heavy industry, especially military industry. The development of light industry was insufficient, and there was a shortage of materials. In addition, the tendency of "attaching importance to the mainland but less to the coast" in the application of the balanced development policy has restrained the economic development | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy Unbalanced development in reform and opening up (1979-1998) At the end of 1978, China began the historical process of reform and opening up, and profoundly summed up the lessons of the "Cultural Revolution" and the disadvantages of planned economy. During this period, unbalanced development was highly praised, which basically dominated the economic layout and regional development of China. In order to make some areas rich first, it encourages coastal cities and regions with low cost, quick effect, easy project landing and convenient foreign trade to develop first, and open up the riverside, belt and inland areas in stages, with emphasis and efficiency. Specific measures include establishment of special economic zones, economic and technological development zones and coastal port cities, etc. Coordinated development since the new millennium (1999-) At this stage, China implements the regional policy of "four plates" and "three support belts" as a whole, and promotes coordinated and complementary development among regions and narrow the regional economic gap under the guidance of major strategies. Specific measures include The Belt and Road Initiative, the development of the "Beijing Tianjin Hebei", the Yangtze River economic belt, the development of the Yangtze River economic belt, the construction of the Guangdong, Hong Kong and Macao | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy After more than 20 years of reform and opening up, the unbalanced development strategy is oriented by "efficiency" and adopts the policy of inclining to the East, which promotes the rapid development of economic core areas such as the Pearl River Delta, the Yangtze River Delta and the Bohai rim, and economic growth poles such as Beijing, Shanghai, Shenzhen and Guangzhou. However, the regional development gap between the East and the West has gradually widened, a series of contradictions such as resource allocation, ecological environment, ethnic relations and regional competition have been intensified, and regional economic problems have become increasingly prominent. The thinking of China's regional economic development has turned to the coordinated and balanced way of "maintaining the priority development momentum of the eastern region and accelerating the development of the central and western regions". Therefore，Western development and Northeast Revitalization and The rise of Central China and the first development of Eastern China are two main regional policy directions. Specific Regional Policy Special economic zone In 1979, Comrade Deng Xiaoping first proposed the establishment of "export special zone". In 1990, the State Council approved the establishment of Shanghai Waigaoqiao Free Trade Zone, the first free trade zone in New China. In 2001, China joined the WTO to participate in international competition and cooperation | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy Since 2003, the State Council has issued a series of documents to build an energy-saving society. The development mode of low-carbon economy has become China's transformation of economic development mode and adjustment China (Shanghai) pilot Free Trade Zone, the first free trade zone in China, was officially established in 2013. The policy includes related keywords as bonded zone, western development, free trade zone, scientific and technological innovation, WTO entry, low-carbon economy, regional preferential policies, foreign direct investment. Main functional areas China's regional economy has formed an overall strategy of "four major plates" for the development of the west, the revitalization of the northeast, the rise of the central region and the first development of the East. The main functional areas are the implementation of the overall strategy of regional development. The land and space are divided into four categories: optimized development, key development, restricted development and prohibited development. The policy includes keywords such as coordinated development, cultivated land protection, the rise of Central China, industrial agglomeration, tax preference, public services, economic compensation, ecological compensation, revitalization of Northeast China, and circular economy | https://en.wikipedia.org/wiki?curid=916257 |
Regional policy One belt and one road One belt and one road, Silk Road Economic Belt & 21st century maritime Silk Road, is a global development strategy adopted by the Chinese government in 2013 involving infrastructure development and investments in nearly 70 countries and international organizations in Asia, Europe, and Africa. It includes key words such as reform and opening up, regional cooperation, industrial upgrading, regional coordinated development, innovation drive, Yangtze River Delta, open economy. | https://en.wikipedia.org/wiki?curid=916257 |
Central Bank of Brazil The () is Brazil's central bank. It was established on December 31, 1964. The Central Bank is linked with the Ministry of the Economy. Like other central banks, the Brazilian central bank is the principal monetary authority of the country. It received this authority when it was founded by three different institutions: the (SUMOC), the Bank of Brazil (BB), and the . One of the main instruments of Brazil's monetary policy is the Banco Central do Brasil's overnight rate, called the SELIC rate. It is managed by Monetary Policy Committee (COPOM) of the bank. The bank is active in promoting financial inclusion policy and is a leading member of the Alliance for Financial Inclusion. It is also one of the original 17 regulatory institutions to make specific national commitments to financial inclusion under the Maya Declaration. during the 2011 Global Policy Forum in Mexico. The most recent presidents of the bank have been: | https://en.wikipedia.org/wiki?curid=917127 |
Fundraising or fund-raising (also known as ""development"" or ""advancement"") is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather money for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for-profit enterprises. Traditionally, fundraising consisted mostly of asking for donations on the street or at people's doors, and this is experiencing very strong growth in the form of face-to-face fundraising, but new forms of fundraising, such as online fundraising, have emerged in recent years, though these are often based on older methods such as grassroots fundraising. is a significant way that non-profit organizations may obtain the money for their operations. These operations can involve a very broad array of concerns such as religious or philanthropic groups such as research organizations, public broadcasters, political campaigns and environmental issues. Some examples of charitable organizations include student scholarship merit awards for athletic or academic achievement, humanitarian and ecological concerns, disaster relief, human rights, research, and other social issues. Some of the most substantial fundraising efforts in the United States are conducted by colleges and universities | https://en.wikipedia.org/wiki?curid=917917 |
Fundraising Commonly the fundraising, or "development" / "advancement," program, makes a distinction between annual fund appeals and major campaigns. Most institutions use professional development officers to conduct superior fundraising appeals for both the entire institution or individual colleges and departments (e.g. School of Art, School of Math, School of Science, etc... as well as campus institutions like athletics and libraries.). The number of people involved will vary widely depending on the size of the institution. Equally important are fundraising efforts by virtually all recognized religious groups throughout the world. These efforts are organized on a local, national, and global level. Sometimes, such funds will go exclusively toward assisting the basic needs of others, while money may at other times be used only for evangelism or proselytism. Usually, religious organizations mix the two, which can sometimes cause tension. also plays a major role in political campaigns. This fact, despite numerous campaign finance reform laws, continues to be a highly controversial topic in American politics. Political action committees (PACs) are the best-known organizations that back candidates and political parties, though others such as 527 groups also have an impact. Some advocacy organizations conduct fundraising "for-or-against" policy issues in an attempt to influence legislation | https://en.wikipedia.org/wiki?curid=917917 |
Fundraising While public broadcasters are completely government-funded in much of the world, there are many countries where some funds must come from donations from the public. In the United States less than 15% of local public broadcasting stations' funding comes from the federal government. Pledge drives, a type of annual giving, commonly occur about three times each year, usually lasting one to two weeks each time. Viewership and listenership often decline significantly during funding periods, so special programming may be aired in order to keep regular viewers and listeners interested. is just one of several revenue sources for a nonprofit organization. revenue can come in the form of grants from government agencies, non-profit foundations or corporations; donations from individuals; and sales and services. Income from endowment is not strictly fundraising but rather the fruits of the investment of previous fundraising. Non-profit organizations also raise funds through competing for grant funding. Grants are offered by governmental units and private foundations/charitable trusts to non-profit organizations for the benefit of all parties to the transaction. Charitable giving by foundations in the U.S was estimated to be $66.90 billion in 2017. Charitable giving by corporations in the U.S was estimated to be $20.77 billion in 2017. This consists of corporate grants as well as matching gift and volunteer grants. 65% of Fortune 500 companies offer employee matching gift programs and 40% offer volunteer grant programs | https://en.wikipedia.org/wiki?curid=917917 |
Fundraising These are charitable giving programs set up by corporations in which the company matches donations made by employees to eligible nonprofit organizations or provides grants to eligible nonprofit organizations as a way to recognize and promote employee volunteerism. The donor base (often called a file or simply "constituents") for higher education includes alumni, parents, friends, private foundations, and corporations. Gifts of appreciated property are important components of such efforts because the tax advantage they confer on the donor encourages larger gifts. The process of soliciting appreciated assets is called planned giving. Charitable giving by individuals in the U.S. was estimated to be $286.65 billion in 2017. The classic development program at institutions of higher learning include prospect identification, prospect research and verification of the prospect's viability, cultivation, solicitation, and finally stewardship, the latter being the process of keeping donors informed about how past support has been used. When goods or professional services are donated to an organization rather than cash, this is called an in-kind gift. A number of charities and non-profit organizations are increasingly using the internet as a means to raise funds; this practice is referred to as online fundraising. In addition, crowdfunding has begun to be used as a method to engage small-donation donors for small, specific opportunities | https://en.wikipedia.org/wiki?curid=917917 |
Fundraising While fundraising often involves the donation of money as an outright gift, money may also be generated by selling a product of some kind, also known as product fundraising. Girl Scouts of the USA are well known for selling cookies in order to generate funds. It is also common to see on-line impulse sales links to be accompanied by statements that a proportion of proceeds will be directed to a particular charitable foundation. Tax law may require differentiating between the cost of an item versus its gift value, such as a $100.00 per person dinner, for a $25.00 cost meal. often involves recognition to the donor, such as naming rights or adding donors to an honor roll or other general recognition. Charity Ad Books are another form of donation for recognition, sponsorship or selling of ads often in an event related program or group directory. Organizations raise funds to support capital projects, endowments, or operating expenses of current programs. Capital fundraising is when fundraising is conducted to raise major sums for a building or endowment, and generally keep such funds separate from operating funds. This is often done over a period of time (in a capital campaign) to encourage donors to give more than they would normally give and tap donors, especially corporations and foundations who would not otherwise give. A capital campaign normally begins with a private phase before launching a public appeal | https://en.wikipedia.org/wiki?curid=917917 |
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