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The Wisdom of Crowds The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, published in 2004, is a book written by James Surowiecki about the aggregation of information in groups, resulting in decisions that, he argues, are often better than could have been made by any single member of the group. The book presents numerous case studies and anecdotes to illustrate its argument, and touches on several fields, primarily economics and psychology. The opening anecdote relates Francis Galton's surprise that the crowd at a county fair accurately guessed the weight of an ox when their individual guesses were averaged (the average was closer to the ox's true butchered weight than the estimates of most crowd members). The book relates to diverse collections of independently deciding individuals, rather than crowd psychology as traditionally understood. Its central thesis, that a diverse collection of independently deciding individuals is likely to make certain types of decisions and predictions better than individuals or even experts, draws many parallels with statistical sampling; however, there is little overt discussion of statistics in the book. Its title is an allusion to Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds," published in 1841. Surowiecki breaks down the advantages he sees in disorganized decisions into three main types, which he classifies as Not all crowds (groups) are wise | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds Consider, for example, mobs or crazed investors in a stock market bubble. According to Surowiecki, these key criteria separate wise crowds from irrational ones: Based on Surowiecki's book, Oinas-Kukkonen captures the wisdom of crowds approach with the following eight conjectures: Surowiecki studies situations (such as rational bubbles) in which the crowd produces very bad judgment, and argues that in these types of situations their cognition or cooperation failed because (in one way or another) the members of the crowd were too conscious of the opinions of others and began to emulate each other and conform rather than think differently. Although he gives experimental details of crowds collectively swayed by a persuasive speaker, he says that the main reason that groups of people intellectually conform is that the system for making decisions has a systematic flaw. Surowiecki asserts that what happens when the decision making environment is not set up to accept the crowd, is that the benefits of individual judgments and private information are lost and that the crowd can only do as well as its smartest member, rather than perform better (as he shows is otherwise possible). Detailed case histories of such failures include: At the 2005 O'Reilly Emerging Technology Conference Surowiecki presented a session entitled "Independent Individuals and Wise Crowds", or" Is It Possible to Be Too Connected?" He recommends: Tim O'Reilly and others also discuss the success of Google, wikis, blogging, and Web 2 | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds 0 in the context of the wisdom of crowds. Surowiecki is a very strong advocate of the benefits of decision markets and regrets the failure of DARPA's controversial Policy Analysis Market to get off the ground. He points to the success of public and internal corporate markets as evidence that a collection of people with varying points of view but the same motivation (to make a good guess) can produce an accurate aggregate prediction. According to Surowiecki, the aggregate predictions have been shown to be more reliable than the output of any think tank. He advocates extensions of the existing futures markets even into areas such as terrorist activity and prediction markets within companies. To illustrate this thesis, he says that his publisher can publish a more compelling output by relying on individual authors under one-off contracts bringing book ideas to them. In this way, they are able to tap into the wisdom of a much larger crowd than would be possible with an in-house writing team. Will Hutton has argued that Surowiecki's analysis applies to value judgments as well as factual issues, with crowd decisions that "emerge of our own aggregated free will <nowiki>[being]</nowiki> astonishingly... decent". He concludes that "There's no better case for pluralism, diversity and democracy, along with a genuinely independent press." Applications of the wisdom-of-crowds effect exist in three general categories: Prediction markets, Delphi methods, and extensions of the traditional opinion poll | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds The most common application is the prediction market, a speculative or betting market created to make verifiable predictions. Surowiecki discusses the success of prediction markets. Similar to Delphi methods but unlike opinion polls, prediction (information) markets ask questions like, "Who do you think will win the election?" and predict outcomes rather well. Answers to the question, "Who will you vote for?" are not as predictive. Assets are cash values tied to specific outcomes (e.g., Candidate X will win the election) or parameters (e.g., Next quarter's revenue). The current market prices are interpreted as predictions of the probability of the event or the expected value of the parameter. Betfair is the world's biggest prediction exchange, with around $28 billion traded in 2007. NewsFutures is an international prediction market that generates consensus probabilities for news events. Intrade.com, which operated a person to person prediction market based in Dublin Ireland achieved very high media attention in 2012 related to the US Presidential Elections, with more than 1.5 million search references to Intrade and Intrade data. Several companies now offer enterprise class prediction marketplaces to predict project completion dates, sales, or the market potential for new ideas. A number of Web-based quasi-prediction marketplace companies have sprung up to offer predictions primarily on sporting events and stock markets but also on other topics | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds The principle of the prediction market is also used in project management software to let team members predict a project's "real" deadline and budget. The Delphi method is a systematic, interactive forecasting method which relies on a panel of independent experts. The carefully selected experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts' forecasts from the previous round as well as the reasons they provided for their judgments. Thus, participants are encouraged to revise their earlier answers in light of the replies of other members of the group. It is believed that during this process the range of the answers will decrease and the group will converge towards the "correct" answer. Many of the consensus forecasts have proven to be more accurate than forecasts made by individuals. Designed as an optimized method for unleashing the wisdom of crowds, this approach implements real-time feedback loops around synchronous groups of users with the goal of achieving more accurate insights from fewer numbers of users. Human Swarming (sometimes referred to as Social Swarming) is modeled after biological processes in birds, fish, and insects, and is enabled among networked users by using mediating software such as the UNU collective intelligence platform. As published by Rosenberg (2015), such real-time control systems enable groups of human participants to behave as a unified collective intelligence | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds When logged into the UNU platform, for example, groups of distributed users can collectively answer questions, generate ideas, and make predictions as a singular emergent entity. Early testing shows that human swarms can out-predict individuals across a variety of real-world projections. Hugo-winning writer John Brunner's 1975 science fiction novel "The Shockwave Rider" includes an elaborate planet-wide information futures and betting pool called "Delphi" based on the Delphi method. Illusionist Derren Brown claimed to use the 'Wisdom of Crowds' concept to explain how he correctly predicted the UK National Lottery results in September 2009. His explanation was met with criticism on-line, by people who argued that the concept was misapplied. The methodology employed was too, flawed; the sample of people, couldn't have been totally objective and free in thought, because they were gathered multiple times and socialised with each other too much; a condition Surowiecki tells us is corrosive to pure independence and the diversity of mind required (Surowiecki 2004:38). Groups thus fall into groupthink where they increasingly make decisions based on influence of each other and are thus "less" accurate. However, other commentators have suggested that, given the entertainment nature of the show, Brown's misapplication of the theory may have been a deliberate smokescreen to conceal his true method | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds This was also shown in the television series East of Eden where a social network of roughly 10,000 individuals came up with ideas to stop missiles in a very short span of time. "Wisdom of Crowds" would have a significant influence on the naming of the crowdsourcing creative company Tongal, which is an anagram for Galton, the last name of the social-scientist highlighted in the introduction to Surowiecki's book. Sir Francis Galton recognized the ability of a crowd's averaged weight-guesses for oxen to exceed the accuracy of experts. In his book "Embracing the Wide Sky", Daniel Tammet finds fault with this notion. Tammet points out the potential for problems in systems which have poorly defined means of pooling knowledge: Subject matter experts can be overruled and even wrongly punished by less knowledgeable persons in systems like Wikipedia, citing a case of this on Wikipedia. Furthermore, Tammet mentions the assessment of the accuracy of Wikipedia as described in a study mentioned in "Nature" in 2005, outlining several flaws in the study's methodology which included that the study made no distinction between minor errors and large errors. Tammet also cites the Kasparov versus the World, an online competition that pitted the brainpower of tens of thousands of online chess players choosing moves in a match against Garry Kasparov, which was won by Kasparov, not the "crowd" (which was not "wise" according to Surowiecki's criteria.). Although Kasparov did say, "It is the greatest game in the history of chess | https://en.wikipedia.org/wiki?curid=1728337 |
The Wisdom of Crowds The sheer number of ideas, the complexity, and the contribution it has made to chess make it the most important game ever played." In his book "You Are Not a Gadget", Jaron Lanier argues that crowd wisdom is best suited for problems that involve optimization, but ill-suited for problems that require creativity or innovation. In the online article "Digital Maoism", Lanier argues that the collective is more likely to be smart only when Lanier argues that only under those circumstances can a collective be smarter than a person. If any of these conditions are broken, the collective becomes unreliable or worse. | https://en.wikipedia.org/wiki?curid=1728337 |
Recursive filter In signal processing, a recursive filter is a type of filter which re-uses one or more of its outputs as an input. This feedback typically results in an unending impulse response (commonly referred to as "infinite impulse response" (IIR)), characterised by either exponentially growing, decaying, or sinusoidal signal output components. However, a recursive filter does not always have an infinite impulse response. Some implementations of moving average filter are recursive filters but with a finite impulse response. Non-recursive Filter Example: y[n] = 0.5x[n − 1] + 0.5x[n]. Recursive Filter Example: y[n] = 0.5y[n − 1] + 0.5x[n]. | https://en.wikipedia.org/wiki?curid=1735759 |
Alpha (finance) Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index. An alpha of 1% means the investment's return on investment over a selected period of time was 1% better than the market during that same period; a negative alpha means the investment underperformed the market. Alpha, along with beta, is one of two key coefficients in the capital asset pricing model used in modern portfolio theory and is closely related to other important quantities such as standard deviation, R-squared and the Sharpe ratio. In modern financial markets, where index funds are widely available for purchase, alpha is commonly used to judge the performance of mutual funds and similar investments. As these funds include various fees normally expressed in percent terms, the fund has to maintain an alpha greater than its fees in order to provide positive gains compared with an index fund. Historically, the vast majority of traditional funds have had negative alphas, which has led to a flight of capital to index funds and non-traditional hedge funds. It is also possible to analyze a portfolio of investments and calculate a theoretical performance, most commonly using the capital asset pricing model (CAPM). Returns on that portfolio can be compared with the theoretical returns, in which case the measure is known as Jensen's alpha. This is useful for non-traditional or highly focused funds, where a single stock index might not be representative of the investment's holdings | https://en.wikipedia.org/wiki?curid=1736486 |
Alpha (finance) The alpha coefficient (formula_1) is a parameter in the single-index model (SIM). It is the intercept of the security characteristic line (SCL), that is, the coefficient of the constant in a market model regression. where the following inputs are: It can be shown that in an efficient market, the expected value of the alpha coefficient is zero. Therefore, the alpha coefficient indicates how an investment has performed after accounting for the risk it involved: For instance, although a return of 20% may appear good, the investment can still have a negative alpha if it's involved in an excessively risky position. In this context, because returns are being compared with the theoretical return of CAPM and not to a market index, it would be more accurate to use the term of Jensen's alpha. A belief in efficient markets spawned the creation of market capitalization weighted index funds that seek to replicate the performance of investing in an entire market in the weights that each of the equity securities comprises in the overall market. The best examples for the US are the S&P 500 and the Wilshire 5000 which approximately represent the 500 most widely held equities and the largest 5000 securities respectively, accounting for approximately 80%+ and 99%+ of the total market capitalization of the US market as a whole | https://en.wikipedia.org/wiki?curid=1736486 |
Alpha (finance) In fact, to many investors, this phenomenon created a new standard of performance that must be matched: an investment manager should not only avoid losing money for the client and should make a certain amount of money, but in fact should make more money than the passive strategy of investing in everything equally (since this strategy appeared to be statistically more likely to be successful than the strategy of any one investment manager). The name for the additional return above the expected return of the beta adjusted return of the market is called "Alpha". Besides an investment manager simply making more money than a passive strategy, there is another issue: although the strategy of investing in every stock appeared to perform better than 75 percent of investment managers (see index fund), the price of the stock market as a whole fluctuates up and down, and could be on a downward decline for many years before returning to its previous price. The passive strategy appeared to generate the market-beating return over periods of 10 years or more. This strategy may be risky for those who feel they might need to withdraw their money before a 10-year holding period, for example. Thus investment managers who employ a strategy which is less likely to lose money in a particular year are often chosen by those investors who feel that they might need to withdraw their money sooner. Investors can use both alpha and beta to judge a manager's performance | https://en.wikipedia.org/wiki?curid=1736486 |
Alpha (finance) If the manager has had a high alpha, but also a high beta, investors might not find that acceptable, because of the chance they might have to withdraw their money when the investment is doing poorly. These concepts not only apply to investment managers, but to any kind of investment. | https://en.wikipedia.org/wiki?curid=1736486 |
Excess reserves In banking, excess reserves are bank reserves in excess of a reserve requirement set by a central bank. In the United States, bank reserves for a commercial bank are held in part as a credit balance in an account for the commercial bank at the applicable Federal Reserve bank (FRB). This credit balance is not separated into separate "minimum reserves" and "excess reserves" accounts. The total amount of FRB credits held in all FRB accounts for all commercial banks, together with all currency and vault cash, form the M0 monetary base. Holding excess reserves has an opportunity cost if higher risk-adjusted interest can be earned by putting the funds elsewhere. For banks in the U.S. Federal Reserve System, this earning process is accomplished by a given bank in the very short term by making short-term (usually overnight) loans on the federal funds market to another bank that may be short of its reserve requirements. Over longer periods, banks have the opportunity to choose how much to hold in excess reserves versus in loans to the non-bank public. Therefore, the amount of its assets that a bank chooses to hold as excess reserves is a decreasing function of the amount by which the market rate for loans to the non-bank public from banks exceeds the interest rate on excess reserves, and of the amount by which the federal funds rate exceeds the interest rate on excess reserves | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves Even with a substantial opportunity cost, banks may choose to hold some excess reserves to facilitate upcoming transactions or to meet contractual clearing balance requirements. The Financial Services Regulatory Relief Act of 2006 authorized the Federal Reserve Banks to pay interest on balances held by or on behalf of depository institutions at Reserve Banks, subject to regulations of the Board of Governors, effective October 1, 2011. The effective date of this authority was advanced by the Emergency Economic Stabilization Act of 2008. On October 3, 2008, Section 128 of the Emergency Economic Stabilization Act of 2008 allowed the Federal Reserve banks to begin paying interest on excess reserve balances ("IOER") as well as required reserves. The Federal Reserve banks began doing so three days later. Banks had already begun increasing the amount of their money on deposit with the Fed at the beginning of September, up from about $10 billion total at the end of August, 2008, to $880 billion by the end of the second week of January, 2009. In comparison, the increase in reserve balances reached only $65 billion after September 11, 2001 before falling back to normal levels within a month. Former U.S. Treasury Secretary Henry Paulson's original bailout proposal under which the government would acquire up to $700 billion worth of mortgage-backed securities contained no provision to begin paying interest on reserve balances | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves The day before the change was announced, on October 7, 2008, Chairman Ben Bernanke of the Board of Governors of the Federal Reserve System expressed some confusion about it, saying, "We're not quite sure what we have to pay in order to get the market rate, which includes some credit risk, up to the target. We're going to experiment with this and try to find what the right spread is." The Fed adjusted the rate on October 22, after the initial rate they set October 6 failed to keep the benchmark U.S. overnight interest rate close to their policy target, and again on November 5 for the same reason. The Congressional Budget Office estimated that payment of interest on reserve balances would cost the American taxpayers about one tenth of the present 0.25% interest rate on $800 billion in deposits: Beginning December 18, 2008, the Federal Reserve System directly established interest rates paid on required reserve balances and excess balances instead of specifying them with a formula based on the target federal funds rate. On January 13, Ben Bernanke said, "In principle, the interest rate the Fed pays on bank reserves should set a floor on the overnight interest rate, as banks should be unwilling to lend reserves at a rate lower than they can receive from the Fed. In practice, the federal funds rate has fallen somewhat below the interest rate on reserves in recent months, reflecting the very high volume of excess reserves, the inexperience of banks with the new regime, and other factors | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves However, as excess reserves decline, financial conditions normalize, and banks adapt to the new regime, we expect the interest rate paid on reserves to become an effective instrument for controlling the federal funds rate." Also on January 13, 2009, "Financial Week" said Mr. Bernanke admitted that a huge increase in banks' excess reserves is stifling the Fed's monetary policy moves and its efforts to revive private sector lending. On January 7, 2009, the Federal Open Market Committee had decided that, "the size of the balance sheet and level of excess reserves would need to be reduced." On January 15, 2009, Chicago Federal Reserve Bank president and Federal Open Market Committee member Charles Evans said, "once the economy recovers and financial conditions stabilize, the Fed will return to its traditional focus on the federal funds rate. It also will have to scale back the use of emergency lending programs and reduce the size of the balance sheet and level of excess reserves. Some of this scaling back will occur naturally as market conditions improve on account of how these programs have been designed. Still, financial market participants need to be prepared for the eventual dismantling of the facilities that have been put in place during the financial turmoil" At the end of January 2009, excess reserve balances within the Federal Reserve System stood at $793 billion but less than two weeks later on February 11, 2009, total reserve balances had fallen to $603 billion | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves On April 1, 2009, reserve balances had again increased to $806 billion. By August 2011, they had reached $1.6 trillion. On March 20, 2013, excess reserves stood at $1.76 trillion. As the economy began to show signs of recovery in 2013, the Fed began to worry about the public relations problem that paying dozens of billions of dollars in interest on excess reserves (IOER) would cause when interest rates rise. St. Louis Fed president James B. Bullard said, "paying them something of the order of $50 billion [is] more than the entire profits of the largest banks." Bankers quoted in the "Financial Times" said the Fed could increase IOER rates more slowly than benchmark Fed funds rates, and reserves should be shifted out of the Fed and lent out by banks as the economy improves. Foreign banks have also steeply increased their excess reserves at the Fed which the "Financial Times" said could aggravate the Fed’s PR problem. By October 2013, the excess reserves at the Federal Reserve had exceeded $2.3 trillion. When there are excess bank reserves fed funds are naturally near 0%. The Federal Reserve Bank was paying 0.25% in IOER very much within the requirements of the Sec. 201 of the Financial Services Regulatory Act of 2006. (A) IN GENERAL. - "Balances maintained at a Federal Reserve bank by or on behalf of a depository institution may receive earnings to be paid by the Federal Reserve bank at least once each calendar quarter, at a rate or rates not to exceed the general level of short-term interest rates | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves " By July 2018, excess bank reserves had fallen to $1.8 trillion as the Federal Reserve Bank reduced its balance sheet and demand from the economy picked up. However, the Federal Reserve Bank was now paying 1.95% on IOER which was no longer within the requirements of paying "a rate or rates not to exceed the general level of short-term interest rates." Paying 1.95% in IOER when fed funds are naturally near 0% was far more than Congress had ever intended. One of the unintended consequences were banks were no longer lending out their excess bank reserves but rather choosing to receive over $35 billion a year of risk-free interest from the Federal Reserve Bank. Sweden and Denmark have paid negative interest on excess reserves (effectively taxing banks for exceeding their reserve requirements) as an expansionary monetary policy measure. The Swedish Riksbank had previously paid positive interest rates on all overnight deposits. The Bank of England started to pay interest of 0.5% on reserves on 5 March 2009. Technically these are not excess reserves, because the United Kingdom does not have reserve requirements. Inflation is caused when there is more demand than supply for products and services at the current price level | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves When there are excess bank reserves, the Natural Equilibrium of Interest Rates (NEIR) points out the cost of capital is an integral part of inflation because fed funds are naturally near 0%, so when the Federal Reserve Bank increases the cost of capital by paying Interest On Excess Reserves (IOER), this policy is in fact inflationary and risks stagflation. When there are excess bank reserves, restricting leverage rather than paying IOER to keep sections of the economy from overheating is an alternative tool for tightening money supply. In short, the near unlimited supply of workers and products due to globalization and technology keeps inflation low and if the Fed were not to pay IOER, fed funds and inflation would be near 0% as was the case in 2015. Research by personnel at the Fed has resulted in claims that interest paid on reserves helps to guard against inflationary pressures. Under a traditional operating framework, in which central bank controls interest rates by changing the level of reserves and pays no interest on excess reserves, it would need to remove almost all of these excess reserves to raise market interest rates. Now when central bank pays interest on excess reserves the link between the level of reserves and willingness of commercial banks to lend is broken. It allows the central bank to raise market interest rates by simply raising the interest rate it pays on reserves "without changing the quantity of reserves" thus reducing lending growth and curbing economic activity | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves Nobel-prize winning economist Eugene Fama contends that paying interest on reserves has (in effect) increased the supply of short-term debt, which through standard demand/supply effects would increase bond yields. The post-GFC low interest-rate environment has therefore persisted in spite of, not because of the actions of the Federal Reserve. Specifically, the demand for risk-free assets (caused by the post-crisis 'flight to quality') has dominated the effect of paying interest on reserves on overall interest rates. He has also argued that paying interest on reserves has protected against hyperinflation of the US dollar. The working monetary base is defined as the monetary base minus excess reserves; this concept is motivated by the fact that excess reserves are funds that have not been loaned out to finance economically productive activity. Before the 2008 financial crisis, since excess reserves were small or unimportant, the working monetary base was essentially equivalent to the monetary base. Much recent economic work seems to indicate that there is an inflationary impact of the working monetary base while excess reserves have little current inflationary impact. See the chart in this article showing that the actual working monetary base has increased much more normally than the traditional monetary base since 2008 | https://en.wikipedia.org/wiki?curid=1738260 |
Excess reserves However, excess reserves, instead of being wasted, may contribute to the overall stability of the banking system since they are a more than legally required buffer against losses sudden and unexpected. | https://en.wikipedia.org/wiki?curid=1738260 |
Law of one price The law of one price (LOOP) states that in the absence of trade frictions (such as transport costs and tariffs), and under conditions of free competition and price flexibility (where no individual sellers or buyers have power to manipulate prices and prices can freely adjust), identical goods sold in different locations must sell for the same price when prices are expressed in a common currency. This law is derived from the assumption of the inevitable elimination of all arbitrage. The law of one price constitutes the basis of the theory of purchasing power parity, an assumption that in some circumstances (for example, as a long-run tendency) it would cost exactly the same number of, for example, US dollars to buy euros and then to use the proceeds to buy a market basket of goods as it would cost to use those dollars directly in purchasing the market basket of goods. The intuition behind the law of one price is based on the assumption that differences between prices are eliminated by market participants taking advantage of arbitrage opportunities. Assume different prices for a single identical good in two locations, no transport costs, and no economic barriers between the two locations. Arbitrage by both buyers and sellers can then operate: buyers from the expensive area can buy in the cheap area, and sellers in the cheap area can sell in the expensive area. Both these actions will drive up supply relative to demand in the expensive area and drive down supply relative to demand in the cheap area | https://en.wikipedia.org/wiki?curid=1739053 |
Law of one price This will force prices to decrease in the expensive area and increase in the cheap one.-priced location, while the lowered supply in the alternative location will drive up prices there. Both scenarios result in a single, equal price per homogeneous good in all locations. "For further discussion, see Rational pricing". Commodities can be traded on financial markets, where there will be a single offer price (asking price), and bid price. Although there is a small spread between these two values the law of one price applies (to each). No trader will sell the commodity at a lower price than the market maker's bid-level or buy at a higher price than the market maker's offer-level. In either case moving away from the prevailing price would either leave no takers, or be charity. In the derivatives market the law applies to financial instruments which appear different, but which resolve to the same set of cash flows; see Rational pricing. Thus: A similar argument can be used by considering arrow securities as alluded to by Arrow and Debreu (1944). The law of one price has been applied towards the analysis of many public events, such as: | https://en.wikipedia.org/wiki?curid=1739053 |
Penn effect The is the economic finding that real income ratios between high and low income countries are systematically exaggerated by gross domestic product (GDP) conversion at market exchange rates. It is associated with what became the Penn World Table, and it has been a consistent econometric result since at least the 1950s. The "Balassa–Samuelson effect" is a model cited as the principal cause of the by neo-classical economics, as well as being a synonym of "Penn effect". Classical economics made simple predictions about exchange rates; it was said that a basket of goods would cost roughly the same amount everywhere in the world, when paid for in some common currency (like gold). This is called the purchasing power parity (PPP) hypothesis, also expressed as saying that the real exchange rate (RER) between goods in various countries should be close to one. Fluctuations over time were expected by this theory but were predicted to be small and non-systematic. Pre-1940, the PPP hypothesis found econometric support, but some time after the Second World War, a series of studies by a University of Pennsylvania team documented a modern relationship: countries with higher incomes consistently had higher prices of domestically produced goods (as measured by comparable price indices), when compared at market exchange rates. In 1964 the modern theoretical interpretation was set down as the Balassa–Samuelson effect, with studies since then consistently confirming the original Penn effect | https://en.wikipedia.org/wiki?curid=1743758 |
Penn effect However, subsequent analysis has provided many other mechanisms through which the can arise, and historical cases where it is expected, but not found. Up until 1994 the PPP-deviation tended to be known as the "Balassa-Samuelson effect", but in his review of progress "Facets of Balassa-Samuelson Thirty Years Later" Paul Samuelson acknowledged the debt that his theory owed to the Penn World Tables data-gatherers, by coining the term "Penn effect" to describe the "basic fact" they uncovered, when he wrote: Most things are cheaper in poor (low income) countries than in rich ones. Someone from a "first world" country on vacation in a "third world" country will usually find their money going a lot further abroad than at home. For instance, a Big Mac cost $7.84 in Norway and $2.39 in Egypt in January 2013, at the prevailing USD exchange rate for those two local currencies, despite the fact the two products are essentially the same. The (naïve form of the) purchasing power parity hypothesis argues that the Balassa–Samuelson effect should not occur. A simple open economy model treating Big Macs as commodity goods implies that international price competition will force Norwegian, Egyptian, and U.S. burger prices to converge in price. The Penn effect, however, maintains that the general price level will remain consistently higher where (dollar) incomes are high. The law of one price says that the same item cannot sustain two different sale prices in the same market (since everyone would buy only at the lower price) | https://en.wikipedia.org/wiki?curid=1743758 |
Penn effect By reversing this law, we can infer that different countries do not share an efficient common market from the fact that prices for the same good are different. If a McDonald's patron in Oslo were able to eat in an identical Cairo restaurant at one quarter the price they would do so, and price competition would then equalize the Big Mac price throughout the world. Of course, someone can only eat out locally, so regional price differentials can persist; the Oslo and Cairo branches are not in competition. If the Cairo McDonald's starts "giving away" burgers the price in Oslo will be unaffected, since one is unlikely to dine in Cairo if starting the evening in Oslo, nor can one import an Egyptian meal into Norway by ordering take-out. Measuring 'the' price level involves looking at goods other than burgers, but most goods in a consumer price index (CPI) show the same pattern; equivalent things tend to cost more in high income countries. Most services, perishable goods like the Big Mac, and housing cannot be purchased very far from the point of consumption (where the consumer happens to live). These items form the typical consumer shopping list, and therefore the consumer price level can vary from country to country, just like the burger price. The deviation in Purchasing power parity allows rural Indians to survive on an income below the absolute subsistence level in the rich world. If the money income levels are taken as given, then all else being equal the is a very good thing | https://en.wikipedia.org/wiki?curid=1743758 |
Penn effect If it did not apply, millions of the world's poorest people would find that their income was below the survival threshold. However, the effect implies that the money income level disparity as measured by international exchange rates is an illusion, because these exchange rates only apply to traded goods, a small proportion of consumption. If the genuine income differential (taking local prices into account) is exaggerated by the market exchange rate, so the real difference in the standard of living between rich and poor countries is less than GDP per capita figures would suggest, if converted at market exchange rates. To make a more significant comparison, economists divide a country's average income by its consumer price index. For instance, economists in 1949 expected that one could buy similar quantities of meat in New York for one dollar as in Tokyo for 360 Yen, the pegged nominal exchange rate at the time. It was thought that deviations from this would mostly be caused by problems of supply, and the fact that exchange rates were not allowed to float to market levels by most of the world's central banks (before the 1970s and the end of the Bretton Woods era of gold convertibility). | https://en.wikipedia.org/wiki?curid=1743758 |
Social choice theory or social choice is a theoretical framework for analysis of combining individual opinions, preferences, interests, or welfares to reach a "collective decision" or "social welfare" in some sense. A non-theoretical example of a collective decision is enacting a law or set of laws under a constitution. dates from Condorcet's formulation of the voting paradox. Kenneth Arrow's "Social Choice and Individual Values" (1951) and Arrow's impossibility theorem in it are generally acknowledged as the basis of the modern social choice theory. In addition to Arrow's theorem and the voting paradox, the Gibbard–Satterthwaite theorem, the Condorcet jury theorem, the median voter theorem, and May's theorem are among the more well known results from social choice theory. Social choice blends elements of welfare economics and voting theory. It is methodologically individualistic, in that it aggregates preferences and behaviors of individual members of society. Using elements of formal logic for generality, analysis proceeds from a set of seemingly reasonable axioms of social choice to form a "social welfare function" (or "constitution"). Results uncovered the logical incompatibility of various axioms, as in Arrow's theorem, revealing an aggregation problem and suggesting reformulation or theoretical triage in dropping some axiom(s) | https://en.wikipedia.org/wiki?curid=1745670 |
Social choice theory Later work also considers approaches to compensations and fairness, liberty and rights, axiomatic domain restrictions on preferences of agents, variable populations, strategy-proofing of social-choice mechanisms, natural resources, capabilities and functionings, and welfare, justice, and poverty. Social choice and public choice theory may overlap but are disjoint if narrowly construed. The Journal of Economic Literature classification codes place Social Choice under Microeconomics at (with Clubs, Committees, and Associations) whereas most Public Choice subcategories are in JEL D72 (Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior). depends upon the ability to aggregate, or sum up, individual preferences into a combined social welfare function. Individual preference can be modeled in terms of an economic utility function. The ability to sum utility functions of different individuals depends on the utility functions being comparable to each other; informally, individuals' preferences must be measured with the same yardstick. Then the ability to create a social welfare function depends crucially on the ability to compare utility functions. This is called "interpersonal utility comparison". Following Jeremy Bentham, utilitarians have argued that preferences and utility functions of individuals are interpersonally comparable and may therefore be added together to arrive at a measure of aggregate utility. Utilitarian ethics call for maximizing this aggregate | https://en.wikipedia.org/wiki?curid=1745670 |
Social choice theory Lionel Robbins questioned whether mental states, and the utilities they reflect, can be measured and, "a fortiori", interpersonal "comparisons" of utility as well as the social choice theory on which it is based. Consider for instance the law of diminishing marginal utility, according to which utility of an added quantity of a good decreases with the amount of the good that is already in possession of the individual. It has been used to defend transfers of wealth from the "rich" to the "poor" on the premise that the former do not derive as much utility as the latter from an extra unit of income. Robbins (1935, pp. 138–40) argues that this notion is beyond positive science; that is, one cannot measure changes in the utility of someone else, nor is it required by positive theory. Apologists of the interpersonal comparison of utility have argued that Robbins claimed too much. John Harsanyi agrees that full comparability of mental states such as utility is never possible but believes, however, that human beings are able to make some interpersonal comparisons of utility because they share some common backgrounds, cultural experiences, etc. In the example from Amartya Sen (1970, p. 99), it should be possible to say that Emperor Nero's gain from burning Rome was outweighed by the loss incurred by the rest of the Romans. Harsanyi and Sen thus argue that at least partial comparability of utility is possible, and social choice theory proceeds under that assumption | https://en.wikipedia.org/wiki?curid=1745670 |
Social choice theory Sen proposes, however, that comparability of interpersonal utility need not be partial. Under Sen's theory of informational broadening, even complete interpersonal comparison of utility would lead to socially suboptimal choices because mental states are malleable. A starving peasant may have a particularly sunny disposition and thereby derive high utility from a small income. This fact should not nullify, however, his claim to compensation or equality in the realm of social choice. Social decisions should accordingly be based on immalleable factors. Sen proposes interpersonal utility comparisons based on a wide range of data. His theory is concerned with access to advantage, viewed as an individual's access to goods that satisfy basic needs (e.g., food), freedoms (in the labor market, for instance), and capabilities. We can proceed to make social choices based on real variables, and thereby address actual position, and access to advantage. Sen's method of informational broadening allows social choice theory to escape the objections of Robbins, which looked as though they would permanently harm social choice theory. Additionally, since the seminal results of Arrow's impossibility theorem and the Gibbard–Satterthwaite theorem, many positive results focusing on the restriction of the domain of preferences of individuals have elucidated such topics as optimal voting | https://en.wikipedia.org/wiki?curid=1745670 |
Social choice theory The initial results emphasized the impossibility of satisfactorily providing a social choice function free of dictatorship and inefficiency in the most general settings. Later results have found natural restrictions that can accommodate many desirable properties. | https://en.wikipedia.org/wiki?curid=1745670 |
Group of 15 The (G-15) is an informal forum set up to foster cooperation and provide input for other international groups, such as the World Trade Organization (WTO) and the Group of Seven. It was established at the Ninth Non-Aligned Movement Summit Meeting in Belgrade, Yugoslavia, in September 1989, and is composed of countries from Latin America, Africa, and Asia with a common goal of enhanced growth and prosperity. The G-15 focuses on cooperation among developing countries in the areas of investment, trade, and technology. Membership has since expanded to 18 countries, but the name has remained unchanged. Chile, Iran and Kenya have since joined the Group of 15, whereas Yugoslavia is no longer part of the group; Peru, a founding member-state, decided to leave the G-15 in 2011. Some of the objectives of the G-15 are: By design, the G-15 has avoided establishing an administrative structure like those for international organizations, such as the United Nations or the World Bank; but the G-15 does have a Technical Support Facility (TSF) located in Geneva. The TSF functions under the direction of the Chairman for the current year. The TSF provides necessary support for the activities of the G-15 and for its objectives. Other organs and functions of the G-15 include: In addition, the Federation of Chambers of Commerce, Industry and Services (FCCIS) is a private sector forum of G-15 member countries | https://en.wikipedia.org/wiki?curid=1748521 |
Group of 15 The purpose of the FCCIS is to coordinate and maximize efforts which promote business, economic development and joint investment in G-15 nations. In 2010, the chairmanship of the G-15 was accepted by Sri Lanka at the conclusion of the 14th G-15 summit in Tehran. | https://en.wikipedia.org/wiki?curid=1748521 |
G33 (developing countries) The G33 (or the Friends of Special Products in agriculture) is a coalition of developing countries, established prior to the 2003 Cancun ministerial conference, that have coordinated during the Doha Round of World Trade Organization negotiations, specifically in regard to agriculture. Dominated by India, the group has "defensive" concerns regarding agriculture in relation to World Trade Organization negotiations, and seeks to limit the degree of market opening required of developing countries. The group has advocated the creation of a "special products" exemption, which would allow developing countries to exempt certain products from tariff reductions, and also a "special safeguard mechanism" which would permit tariff increases in response to import surges. Despite the name, there are currently 48 member nations. | https://en.wikipedia.org/wiki?curid=1748558 |
Durable good In economics, a durable good or a hard good or consumer durable is a good that does not quickly wear out, or more specifically, one that yields utility over time rather than being completely consumed in one use. Items like bricks could be considered perfectly durable goods because they should theoretically never wear out. Highly durable goods such as refrigerators or cars usually continue to be useful for three or more years of use, so durable goods are typically characterized by long periods between successive purchases. Examples of consumer durable goods include automobiles, books, household goods (home appliances, consumer electronics, furniture, tools, etc.), sports equipment, jewelry, medical equipment, firearms, and toys. Nondurable goods or soft goods (consumables) are the opposite of durable goods. They may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of less than three years. Examples of nondurable goods include fast-moving consumer goods such as cosmetics and cleaning products, food, condiments, fuel, beer, cigarettes and tobacco, medication, office supplies, packaging and containers, paper and paper products, personal products, rubber, plastics, textiles, clothing, and footwear. While durable goods can usually be rented as well as bought, nondurable goods generally are not rented. While buying durable goods comes under the category of investment demand of goods, buying non-durables comes under the category of consumption demand of goods | https://en.wikipedia.org/wiki?curid=1750677 |
Durable good According to Cooper (1994, p5) "durability is the ability of a product to perform its required function over a lengthy period under normal conditions of use without excessive expenditure on maintenance or repair". Several units may be used to measure the durability of a product according to its field of application such as years of existence, hours of use and operational cycles. The life span of household goods is significant for sustainable consumption. The longer product life spans could contribute to eco-efficiency and sufficiency, thus, slowing consumption in order to progress towards a sustainable consumption. Cooper (2005) proposed a model to demonstrate the crucial role of product life spans to sustainable production and consumption. Durability as a characteristic relating to the quality of goods, that can be demanded by consumers, was not clear until an amendment of the law relating to the quality standards for supplied goods in 1994[5]. | https://en.wikipedia.org/wiki?curid=1750677 |
Forward exchange market The forward exchange market is a market for contracts that ensure the future delivery of a foreign currency at a specified exchange rate. The price of a forward contract is known as the forward rate. Forward rates are usually negotiated for delivery one month, three months, or one year after the date of the contract's creation. They usually differ from the spot rate and from each other. If one currency is expected to depreciate against a second, it is said the first currency is selling at a discount on the forward market. The term selling at a premium on the forward market is used for cases in which appreciation is expected. If there is no government intervention on the value of a currency, the forward market will be governed by supply and demand. In such a case it is possible that the forward rate provides information on the future spot rate, but ultimately uncertain. What is certain is that the forward rates reflect the expectations forward market participants have on the changes of the spot rate during the specified interval. If the forward rate and the spot rate are the same, forward market participants do not expect much change in the price of a currency over the given period of time. Forward contracts can be used to hedge or cover exposure to foreign exchange risk. | https://en.wikipedia.org/wiki?curid=1759885 |
NASDAQ MarketSite (or simply MarketSite) is the commercial marketing presence of the NASDAQ stock market. Located in Times Square in New York City, it occupies the northwest corner of the bottom of 4 Times Square. The exterior wall of the seven-story cylindrical tower is an LED electronic video display that provides market quotes, financial news and advertisements. It was built in 1999 and made its debut on January 1, 2000. The ground floor of the glass-walled MarketSite contains a television studio. A wall of rear-projection monitors 44 feet (17 m) long by 14 feet (4 m) high display market conditions in real-time, providing reporters from CNBC, CNN, Yahoo! Finance, Fox News Channel, MSNBC, Bloomberg Television, BBC, and other financial television networks a backdrop to present their reports. BusinessWeek's weekly syndicated newsmagazine also comes from the MarketSite. The Nasdaq MarketSite was a novel idea that took the electronic display of market data from simple LED stock tickers with arcane company trading symbols to sophisticated graphic displays including a logo ticker and other real-time market data. The original idea for MarketSite and the data visualizations and graphics came from Enock Interactive (now Percepted) in New York City. The project was 10 years in the making prior to the Times Square launch. The technologies and processes used in the original Nasdaq MarketSite are protected under United States Patent 7,082,398 () issued July 25, 2006 | https://en.wikipedia.org/wiki?curid=1760952 |
NASDAQ MarketSite Inventors were: Thomas Apple (Arlington, Virginia), Paul Noble (Short Hills, New Jersey), John Footen (Mount Arlington, New Jersey); and Andrew Klein (Brookline, Massachusetts). The initial installation of the MarketSite was in the former Whitehall street location of Nasdaq. The current Times Square system and process have been upgraded and changed several times but remain protected by the broad claims and novel uses outlined in the original patent. The current MarketSite facility utilizes a complex system of videowall processors and data feeds to provide broadcasters with a dynamic real-time data background. This system shares nothing with the original Whitehall street iteration of the MarketSite, having been upgraded and redesigned several times due to advances in technology. | https://en.wikipedia.org/wiki?curid=1760952 |
Free silver was a major economic policy issue in late-19th-century America. Its advocates were in favor of an expansionary monetary policy featuring the unlimited coinage of silver into money on demand, as opposed to strict adherence to the more carefully fixed money supply implicit in the gold standard. Supporters of an important place for silver in a bimetallic money system making use of both silver and gold, called "Silverites", sought coinage of silver dollars at a fixed weight ratio of 16-to-1 against dollar coins made of gold. Because the actual price ratio of the two metals was substantially higher in favor of gold at the time, most economists warned that the less valuable silver coinage would drive the more valuable gold out of circulation. While all agreed that an expanded money supply would inevitably raise prices, at issue was whether or not this inflationary tendency would be beneficial. The issue peaked from 1893 to 1896, when the economy was wracked by a severe depression—remembered as the Panic of 1893—characterized by falling prices (deflation), high unemployment in industrial areas, and severe distress for farmers. The "free silver" debate pitted the pro-gold financial establishment of the Northeast, along with railroads, factories, and businessmen, who were creditors deriving benefit from deflation and repayment of loans with valuable gold dollars, against farmers who would benefit from higher prices for their crops and an easing of credit burdens | https://en.wikipedia.org/wiki?curid=1762386 |
Free silver was especially popular among farmers in the Wheat Belt (the western Midwest) and the Cotton Belt (the Deep South), as well as silver miners in the West. It had little support among farmers in the Northeast and the Corn Belt (the eastern Midwest). was the central issue for Democrats in the presidential elections of 1896 and 1900, under the leadership of William Jennings Bryan, famed for his Cross of Gold speech in favor of free silver. The Populists also endorsed Bryan and free silver in 1896, which marked the effective end of their independence. In major elections free silver was consistently defeated, and after 1896 the nation moved to the gold standard. The debate over silver lasted from the passage of the Fourth Coinage Act in 1873, which demonetized silver and was called the "Crime of '73" by opponents, until 1913, when the Federal Reserve Act completely overhauled the U.S. monetary system. Under the gold specie standard, anyone in possession of gold bullion could deposit it at a mint where it would be processed into gold coins. Less a nominal seigniorage to cover processing costs, the coins would then be paid to the depositor; this was free coinage of gold by definition. The objective of the free silver movement was that the mints should accept and process silver bullion according to the same principle, notwithstanding the fact that the market value of the silver in circulating coins of the United States was substantially less than face value | https://en.wikipedia.org/wiki?curid=1762386 |
Free silver As a result, the monetary value of silver coins was based on government fiat rather than on the commodity value of their contents, and this became especially true following the huge silver strikes in the West, which further depressed the silver price. From that time until the early 1960s the silver content in United States dimes, quarters, half dollars and silver dollars was worth only a fraction of their face values. Free coinage of silver would have amounted to an increase in the money supply, with inflation as the result. Many populist organizations favored an inflationary monetary policy on the grounds that it would enable debtors (often farmers who had mortgages on their land) to pay their debts off with cheaper, more readily available dollars; those who would suffer under this policy were the creditors such as banks and landlords. The most vocal and best organized supporters were the silver mine owners (such as William Randolph Hearst) and workers, and the western states and territories generally, as most U.S. silver production was based there and the region had a great number of highly indebted farmers and ranchers. Outside the mining states of the West, the Republican Party steadfastly opposed free silver, arguing that the best road to national prosperity was "sound money", or gold, which was central to international trade. They argued that inflation meant guaranteed higher prices for everyone, and real gains chiefly for the silver interests. In 1896 Senator Henry M | https://en.wikipedia.org/wiki?curid=1762386 |
Free silver Teller of Colorado led many western Republicans to bolt and form a third party that supported William Jennings Bryan, the short-lived Silver Republican Party. The Sherman Silver Purchase Act of 1890, while falling short of free silver's goals, required the U.S. government to buy millions of ounces of silver (driving up the price of the metal and pleasing silver miners) for money (pleasing farmers and many others). However, the U.S. government paid for that silver bullion in gold notes—and actually reduced their coinage of silver. The result was a "run" on the Treasury's gold reserves which was one of the many reasons for the Panic of 1893 and the onset of the 1890s Depression. Once he regained power, and after the Panic of 1893 had begun, Grover Cleveland engineered the repeal of the Act, setting the stage for the key issue of the next presidential election. The Populist Party had a strong free-silver element. Its subsequent combination with the Democratic Party moved the latter from the support of the gold standard which had been the hallmark of the Cleveland administration to the free-silver position epitomized by 1896 presidential nominee William Jennings Bryan in his Cross of Gold speech. Bryan's 1896 candidacy was supported by Populists and "silver Republicans" as well as by most Democrats. The issue was over what would back the US currency. The two options were: "gold" (wanted by the Goldbugs and William McKinley) and "silver" (wanted by the Silverites and Bryan) | https://en.wikipedia.org/wiki?curid=1762386 |
Free silver Unbacked "paper" (wanted by the Greenbacks) represented a third option. A fourth option, currency backed by "land value", was advocated by Senator Leland Stanford through several Senate bills introduced in 1890-1892, but was always killed by the Senate Finance Committee. Three fraternal organizations rose to prominence during the mid-1890s and supported the silver campaign in 1896. They all disappeared after the failure of the campaign. The city voters—especially German Americans—overwhelmingly rejected the free-silver cause out of conviction that it would lead to economic disaster, unemployment, and higher prices. The diversified farmers of the Midwest and East opposed it as well, but the cotton farmers in the South and the wheat farmers in the West were enthusiastic for free silver. Bryan tried again in 1900 to raise the issue but lost by larger margins, and when he dropped the issue it fell out of circulation. Subsequent actions to revive the issue were unsuccessful. became increasingly associated with populism, unions, and the fight of ordinary Americans against the bankers, railroad monopolists, and the robber barons of the "Gilded Age" capitalism era and was referred to as the "People's Money" (as opposed to the gold-based currency, which was portrayed by the Populists as the money of "exploitation" and "oppression"). William H | https://en.wikipedia.org/wiki?curid=1762386 |
Free silver Harvey's popular pamphlet "Coin's Financial School", issued in the aftermath of the Panic of 1893, illustrated the "restorative" properties of silver; through devaluation of the currency, closed factories would reopen, darkened furnaces would be relit, and the like. But Henry Demarest Lloyd was much harsher, writing: "The free silver movement is a fake. is the cow-bird of the reform movement. It waited until the nest had been built by the sacrifices and labor of others, and then it lay its own eggs in it, pushing out the others which lie smashed on the ground." | https://en.wikipedia.org/wiki?curid=1762386 |
Binary economics Binary economics, also known as Two-factor Economics, is a theory of economics that endorses both private property and a free market but proposes significant reforms to the banking system. According to theories first proposed by Louis Kelso, widespread use of central bank-issued interest-free loans to fund employee-owned firms can finance economic growth whilst widening stock ownership in a way which binary economists believe will be non-inflationary. The term "binary" derived from its heterodox treatment of labor and capital (but not in the sense of binary opposition). Kelso claimed that in a truly free market wages would tend to fall over time, with all the benefits of technological progress accruing to capital owners. rejects the claim that neoclassical economics alone promotes a 'free market' which is free, fair and efficient. (e.g., as an interpretation of the classical First Fundamental Theorem of Welfare Economics). Binary economists believe freedom is only truly achieved if all individuals are able to acquire an independent economic base from capital holdings, and that the distribution of ownership rights can "deepen democracy". argues financial savings prior to investment are not required on the basis that the present money supply is mostly created credit anyway | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics It argues that newly minted money invested on behalf of those "without access" to existing cash savings or collateral can be adequately repaid through the returns on those investments, which need not be inflationary if the economy is operating below capacity. The theory asserts that what matters is whether the newly created money is interest-free, whether it can be repaid, whether there is effective collateral and whether it goes towards the development and spreading of various forms of productive (and the associated consuming) capacity. Another contrast is that, in evidence-based economics, interest (as distinct from administration cost) is practically always necessary; in Binary Economics theory it isn't (not in relation to the development and spreading of productive capacity). Conventional economics accounts for the observed time value of money, whereas binary economics does not. The theory behind Binary Economics was proposed by American lawyer Louis Kelso and philosopher Mortimer Adler in their book "The Capitalist Manifesto" (1958). The book's title could be seen as a Cold War reference in opposition to communism. Kelso and Adler elaborated on their proposals in "The New Capitalists" in 1961. Then Kelso worked with political scientist Patricia Hetter Kelso to further explain how capital instruments provide an increasing percentage of the wealth and why capital is narrowly owned in the modern industrial economy | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics Their analysis predicted that widely distributed capital ownership will create a more balanced economy. Kelso and Hetter proposed new "binary" share holdings which would pay out full net earnings as dividends (with exceptions for research, maintenance and depreciation). These could be obtained on credit by those not possessing savings, with a government-backed insurance scheme to protect the shareholder in the event of loss. Kelso's writings were not well received by academic economists. Milton Friedman said of "The Capitalist Manifesto" "the book's economics was bad...the interpretation of history, ludicrous; and the policy recommended, dangerous" and recalls a debate where even the moderator Clark Kerr "lost his cool as a moderator and attacked [Kelso's arguments] vigorously". Paul Samuelson, another Nobel Memorial Prize in Economic Sciences winner, told the U.S. Congress that Kelso's theories were a "cranky fad" not accepted by mainstream economists, but Kelso's ideas on promoting wider capital ownership nevertheless significantly influenced the passing of legislation promoting employee ownership. The aim of binary economics is to ensure that all individuals receive income from their own independent capital estate, using interest-free loans issued by a central bank to promote the spread of employee-owned firms. These loans are intended to: halve infrastructure improvement costs, reduce business startup costs, and widen stock ownership. is not mainstream and does not fit easy into the left–right spectrum | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics It has variously been characterized as an extreme right-wing ideology and as extremely left-wing by its critics. The 'binary' (in 'binary economics') means 'composed of two'’ because it suffices to view the physical factors of production as being but two (labour and capital (which includes land). It recognises only two ways of genuinely earning a living − by labour and by productive capital ownership. In its theory humans own their labour, but also productive capital. is partly based on belief that society has an absolute duty to ensure that all humans have good health, housing, education and an independent income, as well as a responsibility to protect the environment for its own sake. The interest-free loans proposed by binary economics are compatible with the traditional opposition of the Abrahamic religions to usury. Proponents of binary economics claim that their system contains no expropriation of wealth, and much less redistribution will be necessary. They argue that it cannot cause inflation and is of particular importance as more of the physical contribution to production is automated. and that the paradigm is particularly helpful in addressing the issue of why developing countries languish. Advocates contend that implementing their system will lessen national debt and encourage national unity. They believe binary economics could create a stable economy. Binary productiveness is distinctly different from the conventional economic concept of productivity | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics Binary productiveness attempts to quantify the proportion of output contributed by total labor input and total capital input respectively, Adding capital inputs to a production process increases labor productivity, but binary economic theory argues that it decreases "labor productiveness" (i.e. the proportion of the total output with the support of both labor and capital that the labor inputs could have produced alone). For example, if the invention of a shovel allows a laborer to dig a hole in quarter of the time it would take him without the spade, binary economists would consider 75% of the "productiveness" to come from the shovel and only 25% from the laborer. Roth criticised the shovel example on the basis that the shovel is not a factor of production independent of human capital because somebody invented it, and the shovel cannot act independently: the physical productiveness of the shovel before labour is added to it is zero. Kelso used the concept of productiveness to support his theory of distributive justice, arguing that as capital increasingly substitutes for labor..."workers can legitimately claim from their aggregate labor only a decreasing percentage of total output", implying they would need to acquire capital holdings to maintain their level of income | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics In "The Capitalist Manifesto", Kelso boldly asserted: "It is, if anything an underestimation rather than an exaggeration to say that the aggregate physical contribution to the production of the wealth of the workers in the United States today accounts for less than 10 percent of the wealth produced, and that the contribution by the owners of capital instruments, through their physical instruments, accounts in physical terms for more than 90 percent of the wealth produced" Whilst the increased importance of capital as a factor of production following the Industrial Revolution has long been accepted even by those believing economic value derives from labour such as Marx, Kelso's figures suggesting that value was created almost entirely by capital were dismissed by academic economists like Paul Samuelson. Samuelson asserted that Kelso's had not used any econometric analysis to arrive at his figures, which completely contradicted economists' empirical findings on the contribution of labour. "The Capitalist Manifesto" did not provide detailed calculations to support Kelso's claim, although a footnote suggested that it was based on a simple comparison with 1850s labour productivity figures. Employee stock ownership plans (ESOPs) are compatible with some of the principles of binary economics | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics These stem originally from Louis Kelso & Patricia Hetter Kelso (1967)"Two-Factor Theory: The Economics of Reality"; the founding of Kelso & Company in 1970; and then from conversations in the early 1970s between Louis Kelso, Norman Kurland (Center for Economic and Social Justice), Senator Russell Long of Louisiana (Chairman, USA Senate Finance Committee, 1966–81) and Senator Mike Gravel of Alaska. There are about 11,500 ESOPs in the USA today covering 11 million employees in closely held companies. proposes that central bank-issued interest-free loans should be administered by the banking system for the development and spreading of productive (and the associated consuming) capacity, particularly new capacity, as well as for environmental and public capital. While no interest would be charged, there would be an administrative cost as well as collateralization or capital credit insurance. Proponents of binary economics are dissatisfied with fractional-reserve banking, arguing that it "creates new money out of nothing". The supply of interest-free loans would place in circumstances of a move (over time) towards banks maintaining reserves equal to 100% of their deposits; in practice, the large-scale interest-free lending desired by binary economics is compatible with the widespread reduction in money supply that would be caused by increased reserve requirements only if the government takes over the banks' role in credit creation | https://en.wikipedia.org/wiki?curid=1762631 |
Binary economics suggests that ownership of productive (and the associated consuming) capacity, particularly new capacity, could be spread by the use of central bank-issued interest-free loans. Interest-free loans should be allowed for private capital investment "IF such investment creates new owners of capital and is part of national policy to enable all individuals, over time, on market principles, to become owners of substantial amounts of productive, income-producing capital". By using central bank-issued interest-free loans, a large corporation would get cheap money as long as new binary shareholders are created. | https://en.wikipedia.org/wiki?curid=1762631 |
Poverty penalty The poverty penalty describes the phenomenon that poor people tend to pay more to eat, buy, and borrow than the rich. The term became widely known through a 2005 book by C. K. Prahalad, "The Fortune at the Bottom of the Pyramid". An earlier exploration of this was a 1960s sociology study published as "The Poor Pay More" which examined the ways in which retail patterns and a lack of consumer options allowed marginal retailers such as door-to-door salesmen, "easy credit" storefronts and the sale of installment credit agreements to extract profits from low-income buyers, with fewer options and less sophisticated consumer habits. | https://en.wikipedia.org/wiki?curid=1763069 |
Salt tax A salt tax was a tax levied directly on salt, usually proportional to the amount of salt purchased. In ancient times, salt was extremely valuable as a preservant. Words such as "salary" are derived from the same root as salt and indicate its vitality to civilizations. As an example, ancient "salaries" could literally be quantities of salt. Due to the scarcity and importance of salt, levying a tax on its commerce was extremely lucrative, but also widely despised and controversial. The most notable instances are the gabelle in France, salt tax in China and the salt tax in India including that under the British. Notable examples of salt taxation throughout history include: In 2014, it is still illegal in certain provinces of China to use salt from a neighbor city. | https://en.wikipedia.org/wiki?curid=1778868 |
Reproduction (economics) In Marxian economics, economic reproduction refers to recurrent (or cyclical) processes. Michel Aglietta views economic reproduction as the process whereby the initial conditions necessary for economic activity to occur are constantly re-created. Marx viewed reproduction as the process by which society re-created itself, both materially and socially. Economic reproduction involves: Karl Marx developed the original insights of Quesnay to model the circulation of capital, money, and commodities in the second volume of "Das Kapital" to show how the reproduction process that must occur in any type of society can take place in capitalist society by means of the circulation of capital. Marx distinguishes between "simple reproduction" and "expanded (or enlarged) reproduction". In the former case, no economic growth occurs, while in the latter case, more is produced than is needed to maintain the economy at the given level, making economic growth possible. In the capitalist mode of production, the difference is that in the former case, the new surplus value created by wage-labour is spent by the employer on consumption (or hoarded), whereas in the latter case, part of it is reinvested in production. Ernest Mandel additionally refers in his two-volume "Marxist Economic Theory" to "contracted reproduction", meaning production on a smaller and smaller scale, in which case business operating at a loss outnumbers growing business (e.g., in wars, depressions, or disasters) | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) Reproduction in this case continues to occur, but investment, employment, and output fall absolutely, so that the national income falls. In the Great Depression of the 1930s, for example, about one-quarter of the workers became unemployed; as a result of the 2008–9 slump, the unemployed labour force increased by about 30 million workers (a number approximately equal to the total workforce of France, or Britain). As an approach to studying economic activity, economic reproduction contrasts with equilibrium economics, because economic reproduction is concerned not with statics or with how economic development gravitates towards an equilibrium, but rather with "dynamics"—that is, the motion of an economy. It is not concerned with the conditions of a perfect match between supply and demand under ideal conditions but rather with the quantitative proportions between different economic activities or sectors that are necessary in any real economy so that economic activity can continue and grow. It is concerned with "all" the conditions for that, including the social and technical conditions necessary for the economic process. Reproduction economics does not assume that society is kept in balance by market mechanisms. Wassily Leontief developed Marx's idea further in his input-output economics (see also input-output model). However, there is a major difference between Leontief and Marx | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) By treating gross profit as a "factor input" as well as a factor output, the respective total values of the input and output in Leontief's model are always exactly equal. In Marx's model, the output in an accounting period is normally always higher in value than the input. This is what Marx believed capitalists to be in business for: to produce a product sold at a higher value than the sum of input costs, thus generating profit. The profit in Marx's theory is not an "input" (it is not part of the capital advanced), but a business result, the yield of capital on an investment. In Marx's view, economic reproduction in any society has five main features: What is specific to capitalist society is that these reproduction processes are accomplished primarily via the intermediary of "commercial trade"; that is, they are mediated by the market. Reproduction on a larger and larger scale becomes "conditional" on successfully making money. It means that these processes tend to be increasingly reorganized to bring them in line with the requirements of the accumulation of capital. Marx's argument is that by producing an output value the equivalent to their own labor cost plus a surplus value (or gross profit) appropriated by capitalists, waged workers accomplish many of the processes involved at the same time | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) Part of the role of the state is to secure those general (collective) conditions for the reproduction and maintenance of society that individuals and private enterprise cannot secure by themselves for one reason or another (e.g., because they transcend competing interests, because they are too costly for private agencies, because it is technically not possible to privatize them, or because they are not sufficiently profitable or too risky). Ecologists would nowadays probably add as a "reproduction condition" good stewardship for the physical environment. Sustainable development cannot occur if the natural environment is constantly depleted without being restored. The recycling of wastes and waste materials can be considered as a necessary and integral part of society's reproduction process. Each of these six features is the subject of much political controversy in society. Many different opinions exist about their relative importance and their effects on each other. Economists and businesspeople are often primarily concerned with the economic effects, but other intellectuals and workers are often more concerned with the non-economic effects for the health, security, and well-being of citizens. Thus, governments usually have both economic policies and social policies, population policies, environmental policies, and so on. According to Marx, in a capitalist society, economic reproduction is conditional on capital accumulation. If workers fail to produce more capital, economic reproduction begins to break down | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) Therefore, economic reproduction in capitalist society is "necessarily" expanded reproduction and requires market growth. Capital must grow, otherwise the whole process breaks down. Thus, economic growth is not simply desirable but also necessary in capitalism, not just because of population growth, but for commercial reasons. In this light, the ecological vision of a "zero-growth society" appears rather utopian; or, at the very least, its achievement would require the abolition of capitalism. Some would argue that population growth makes economic growth absolutely necessary. Others argue that population growth must be restricted with birth control methods because otherwise there will be too many people for the available resources. The real argument, though, is "not" about growth or the lack thereof, but rather about the "kind" of growth that is best for the (enlarged) reproduction of the human species as such. Ecologists may validly argue that some types of growth undermine important conditions for human survival in the longer term without invalidating other kinds of growth that are beneficial. However, there is much dispute about which kinds of economic growth are beneficial or harmful. Capital accumulation (the amassing of wealth in the form of capital assets) can occur either by producing a net addition to the stock of capital assets or by transferring wealth from one owner to another. In the former case, the total stock of capital grows | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) In the latter case, the accumulation of one owner occurs at the expense of the other, there is no net growth. These two ways are usually combined, meaning that all or most owners make gains, but in unequal amounts. In considering the economic reproduction process as a whole, one therefore has to consider both the production of new resources and the transfer (distribution) of resources. As a corollary, supposing that there is no net growth of output and capital, capital accumulation can continue only if some people and organizations get richer while other people and organizations get poorer. Typically, if output growth slows down, socio-economic inequality (as measured, e.g., by the Gini coefficient) increases. There were nine main factors that Marx disregarded in his construction of reproduction schemes when he modelled the circulation of capital (through the constant transformations of money-capital into production-capital and commodity-capital and vice versa). These omissions have been noted by various Marxist and non-Marxist authors. In assessing the effect of these "omissions", one ought to keep in mind that when Marx discussed the intertwining of the circulation of capital with the reproduction processes that occur in any kind of society, he was primarily concerned with the functional requirements of the capitalist mode of production and not with the reproduction of the whole of society | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) At any time, a fraction of the population is not working or "economically active" (children, students, the sick and disabled, the unemployed, volunteer workers, housewives, pensioners, idlers, etc.), and assets are maintained or accumulated that are unrelated to the sphere of production. These were generally outside the scope of Marx's analysis, even if he occasionally mentioned them. Marx's models of economic reproduction in capitalism have often been interpreted as stating the conditions for economic equilibrium, or balanced economic growth. After all, there are certain "necessary proportions" between different branches of production, which have to adjust their output levels to each other. If those proportions do not reach a minimum acceptable level, then products remain unsold or producers cannot obtain the inputs they require, in which case production begins to slow down or break down. So there are necessary proportions between production, distribution, and consumption that must be maintained if society is to survive and grow. In this sense, Marx distinguishes between the production of means of production, consumer goods, and luxury goods, and he considers the commercial interactions between the sectors producing them. If the growth of different sectors of production occurs very unevenly, bottlenecks can occur, so that a supply or demand cannot be met | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) In the worst case, an interruption in the normal reproduction process triggers a sequence of disturbances, a chain reaction, which spreads from some branches of production to the whole economy, meaning that products are left unsold and that producers receive insufficient income to pay their bills. The result is rising unemployment, idle productive capacity, and a drop in output and productive investment. This in turn means lower economic growth. In this case, models of economic reproduction are not a useful guide to understanding economic crises because, it is argued, Marx only intended them to show how it was "possible" for the whole economic reproduction process to be accomplished on the basis of the circulation of capital, by stating the minimum requirements (not the equilibrium conditions) for it. If certain quantitative assumptions are made about the growth rates of different sectors and about capital compositions, it can be proved that certain disproportions must necessarily develop. But in reality, the economic reproduction process could be interrupted or break down for all kinds of reasons (including non-economic causes, such as wars or disasters). And if disproportions occur, the economic system can also adjust to them, within certain limits | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) If vastly more capital assets are created than are invested in production, one cannot explain economic crises simply in terms of disproportionalities in the sphere of production; one has to look at the process of capital accumulation as a whole, which includes the financial system, non-productive assets, and real estate. This becomes particularly important when large debt crises occur. These debt crises signal that serious misallocations of capital have occurred, which impact negatively on economic reproduction. Arguably, much of the confusion in the debates about economic reproduction is attributable to two basic errors: Once the basic needs of all could be met and organized capitalistically, the further development of capital accumulation could take directions quite unrelated to the direct requirements of economic reproduction. Indeed, this was also part of Marx's critique of capitalism: significant funds could be invested in ways that did not benefit society at all, with the effect that activities and assets essential to maintain society's well-being might be starved of funds. That is, within certain absolute limits, the requirements for physical reproduction and for capital accumulation might not be the same at all. Capital would be invested for profit, but basic necessities might be ignored. An example might be the 2007–2008 world food price crisis, which indicates that insufficient capital has been invested in food production. This might seem strange, since food is a basic requirement of human life | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) But, as Marx would presumably argue, what makes a profit is not necessarily what people really need, and therefore the possibility exists that profit making may undermine the most basic conditions for economic reproduction, including the supply of food and clean water, sanitation, adequate shelter, schooling, health care, and the like. These conditions are undermined not because capitalists dislike investing in these things—they might love to invest in them, if they could—but rather because it is difficult to make a secure profit from doing so. The required investments may be very large and long term, tying up capital for many years, but either there is no possibility for profit or it is uncertain whether a sufficient profit can and will be made. If, for example, foreign investors invested in a country's essential infrastructure, a falling currency exchange rate some years later might wipe out the profits they could get. Therefore, such investments could occur only if foreign or local government authorities (and ultimately taxpayers) subsidized them (or at any rate, if they acted as a guarantor for the investments), or if financial institutions could find sufficient financial insurance to protect the value of investment capital through terms that reduce financial risk to investors. Reproduction can also refer to the worker's daily reproduction of his or her own labor power | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) This consists of the tasks of everyday existence—food preparation, laundry, and so forth—that maintain the worker and his or her ability to work. Since roughly the 16th century, much of this domestic labor has been made the responsibility of women, through various developments put in motion by powerful institutions in the transition period from feudalism to capitalism. Adding to the process of social degradation of women in that period was the devaluation of the reproduction of labor. As Silvia Federici notes, "In the new monetary regime, only production-for-market was defined as value-creating activity, whereas the reproduction of the worker began to be considered as valueless from an economic viewpoint and even ceased to be considered as work". Thus it is of particular interest in feminist economics. For example, it was reported in 1988 that the paid work done by both men and women outside the home in West Germany totalled 55,000 million hours a year, earning them a total of $335 billion; but housework done by women inside the home totalled 53,000 million hours a year, which earned them no salary at all. One of the principal inventors of modern national accounts, Simon Kuznets, did at one time suggest that the value of household labour should be estimated as a standard measure, even just for the sake of objectivity about the economy, but that argument was rejected. He stated: Later, the economist Robert Eisner tried to estimate the value of "non-market outputs" | https://en.wikipedia.org/wiki?curid=1781054 |
Reproduction (economics) His calculations suggested that in the United States, the value of unpaid household work declined from about 45% of conventional Gross National Product in 1945 to about 33% in 1981. | https://en.wikipedia.org/wiki?curid=1781054 |
Entry-level job An entry-level job is a job that is normally designed or designated for recent graduates of a given discipline and typically does not require prior experience in the field or profession. These roles may require some on-site training. Many entry-level jobs are part-time and do not include employee benefits. Recent graduates from high school or college usually take entry-level positions. Entry-level jobs targeted at college graduates often offer a higher salary than those targeted at high school graduates. These positions are more likely to require specific skills, knowledge, or experience. Most entry-level jobs offered to college graduates are full-time permanent positions and some offer more extensive graduate training programs. While entry-level jobs traditionally required no experience, the Great Recession produced a surplus of college graduates on the job market and eliminated many entry-level positions. | https://en.wikipedia.org/wiki?curid=1792931 |
Poverty industry The terms poverty industry or poverty business refer to a wide range of money-making activities that attract a large portion of their business from the poor because they are poor. Businesses in the poverty industry often include payday loan centers, pawnshops, rent-to-own centers, casinos, liquor stores, lotteries, tobacco stores, credit card companies, and bail-bond services. Illegal ventures such as loansharking might also be included. The poverty industry makes roughly US$33 billion a year in the United States. In 2010, elected American federal officials received more than $1.5 million in campaign contributions from poverty-industry donors. In poorer countries, the poverty industry exploits the bottom of the pyramid and its extent can at times be used as a litmus test to assess the effectiveness of philanthropic poverty-alleviation initiatives. In some cases, the poverty industry directly takes advantage of philanthropic poverty-alleviation initiatives (e.g. formal, government-supported microfinance). For example, some moneylenders misrepresent themselves as formal microfinance initiatives or obtain loans from formal microfinance initiatives through deception. They on-lend these loans to micro-entrepreneurs (informal intermediation). | https://en.wikipedia.org/wiki?curid=1796566 |
Primary labor market The primary labor market is a market that generally consists of high-wage paying jobs, social security, and longer-lasting careers, but others define it as jobs that "require formal education", but in addition to white collar jobs like teaching, accounting, and the law, it also includes the skilled trades like being a plumber or a photocopy repair technician. It is contrasted by the secondary labor market, which usually consists of low-wage paying jobs, limited mobility within jobs, and temporary careers. The primary and secondary labor markets are intended for division of the standard of jobs within labor (heavy work) services. The workforce as a whole in a primary market is motivated to serve their employer because of health benefits, insurance policies, pension wages and job security. The job market here consists mainly of white- and blue-collar jobs. In the primary labor market, the employees are always trying to prove themselves to their employers by portraying their skills and educational credentials. | https://en.wikipedia.org/wiki?curid=1798471 |
Part-time job A part-time job is a form of employment that carries fewer hours per week than a full-time job. They work in shifts. The shifts are often rotational. Workers are considered to be part-time if they commonly work fewer than 30 hours per week. According to the International Labour Organization, the number of part-time workers has increased from one-quarter to a half in the past 20 years in most developed countries, excluding the United States. There are many reasons for working part-time, including the desire to do so, having one's hours cut back by an employer and being unable to find a full-time job. The International Labour Organisation Convention 175 requires that part-time workers be treated no less favourably than full-time workers. In some cases the nature of the work itself may require that the employees be classified part as part-time workers. For example, some amusement parks are closed during winter months and keep only a skeleton crew on hand for maintenance and office work. As a result of this cutback in staffing during the off season, employees who operate rides, run gaming stands, or staff concession stands may be classified as part-time workers owing to the months long down time during which they may be technically employed, but not necessarily on active duty. In the EU, there is a strong East–West divide, where: "in Central and Eastern European countries part-time work remains a marginal phenomenon even among women, while the Western countries have embraced it much more widely | https://en.wikipedia.org/wiki?curid=1798796 |
Part-time job " The highest percentage of part-time work is in the Netherlands (see below) and the lowest in Bulgaria. There is also a gap between women (32.1% EU average in 2015) and men (8.9%). The Netherlands has by far the highest percentage of part-time workers in the EU and in the OECD. In 2012, 76.9% of women and 24.9% of men worked part-time. The high percentage of women working part-time has been explained by social norms and the historical context of the country, where women were among the last in Europe to enter the workforce, and when they did, most of them did so on a part-time basis; according to "The Economist", fewer Dutch men had to fight in the World Wars of the 20th century, and so Dutch women did not experience working for pay at rates women in other countries did. The wealth of the country, coupled with the fact that "[Dutch] politics was dominated by Christian values until the 1980s" meant that Dutch women were slower to enter into the workforce. Research in 2016 led by professor Stijn Baert (Ghent University) debunked the idea that part-time work by students is an asset for their CV in respect of later employment chances. Part-time employment in Australia involves a comprehensive framework. Part-time employees work fewer hours than their full-time counterparts within a specific industry. This can vary, but is generally less than 32 hours per week. Part-time employees within Australia are legally entitled to paid annual leave, sick leave, and having maternity leave etc | https://en.wikipedia.org/wiki?curid=1798796 |
Part-time job except it is covered on a 'pro-rata' (percentage) basis depending on the hours worked each week. Furthermore, as a part-time employee is guaranteed a ular roster within a workplace, they are given an annular salary paid each week, fortnight, or month. Employers within Australia are obliged to provide minimum notice requirements for termination, redundancy and change of rostered hours in relation to part-time workers. As of January 2010, the number of part-time workers within Australia was approximately 3.3 million out of the 10.9 million individuals within the Australian workforce. In Canada, part-time workers are those who usually work fewer than 30 hours per week at their main or only job. In 2007, just over 1 in every 10 employees aged 25 to 54 worked part-time. A person who has a part-time placement is often contracted to a company or business in which they have a set of terms they agree with. 'Part-time' can also be used in reference to a student (usually in higher education) who works only few hours a day. Usually students from different nations (India, China, Mexico etc.) prefer Canada for their higher studies due to the availability of more part-time jobs. According to the Bureau of Labor Statistics, working part-time is defined as working between 1 and 34 hours per week. In 2018, between 25 and 28 million Americans worked part-time. Typically, part-time employees in the United States are not entitled to employee benefits, such as health insurance | https://en.wikipedia.org/wiki?curid=1798796 |
Part-time job The Institute for Women's Policy Research reports that females are nine times likelier than males to work in a part-time capacity over a full-time capacity as a result of caregiving demands of their family members. Increasing use of part-time workers in the United States is associated with employee scheduling software often resulting in expansion of the part-time workforce, reduction of the full-time workforce and scheduling which is unpredictable and inconvenient. | https://en.wikipedia.org/wiki?curid=1798796 |
Full-time job A full-time job is employment in which a person works a minimum number of hours defined as such by their employer. Full-time employment often comes with benefits that are not typically offered to part-time, temporary, or flexible workers, such as annual leave, sickleave, and health insurance. Part-time jobs are mistakenly thought by some to not be careers. However, legislation exists to stop employers from discriminating against part-time workers so this should not be a factor when making decisions on career advancement. They generally pay more than part-time jobs per hour, and this is similarly discriminatory if the pay decision is based on part-time status as a primary factor. The Fair Labor Standards Act (FLSA) does not define full-time employment or part-time employment. This is a matter generally to be determined by the employer (US Department of Labor). The definition by employer can vary and is generally published in a company's Employee Handbook. Companies commonly require from 32 to 40 hours per week to be defined as full-time and therefore eligible for benefits. Full-time status varies between company and is often based on the shift the employee must work during each work week. The "standard" work week consists of five eight-hour days, commonly served between 9:00 AM to 5:00 PM or 10:00 AM to 6:00 PM totaling 40 hours. While a four-day week generally consists of four ten-hour days, it may also consist of as little as nine hours for a total of a 36-hour work week | https://en.wikipedia.org/wiki?curid=1798797 |
Full-time job Twelve-hour shifts are often three days per week, unless the company has the intention of paying out the employee overtime. Overtime is legally paid out anytime an employee works more than 40 hours per week. The legal minimum for overtime starts at Base Pay + One-Half. The increased payout is considered to compensate slightly for the increased fatigue which a person experiences on such long shifts. Shifts can also be very irregular, as in retail, but are still full-time if the required number of hours is reached. There are some situations where a person who needs full-time work is dropped to part-time, which is sometimes a form of constructive dismissal to avoid paying unemployment benefits to a laid-off worker. Full-time workweeks: A person working more than full-time is working overtime, and may be entitled to extra per-hour wages (but not salary). “Full-time” can also be used in reference to a student (usually in higher education) who takes a full load of course work each academic term. The distinction between a full-time and part-time student varies markedly from country to country. As an example, in the United States a student is commonly defined as being in full-time education when they undertake 12 or more credit hours. This translates to 12 "hours" (often of 50 minutes instead of 60 minutes each) in class per week. "Lab hours" often count for less, only as one-half or one-third of a credit hour. International students must maintain full-time status for student visas | https://en.wikipedia.org/wiki?curid=1798797 |
Full-time job Adult students (typically up to age 22 or 23) may also fall under their parents' health insurance (and possibly car insurance and other services) if they are full-time, except for one term per year (usually summer). Students may also be eligible for elected office in student government or other student organizations only if they are full-time. The Department of Labor has a full-time student program which allows employers to pay no less than 85% of the minimum wage to the student/employee. https://www.jobfind.online/2019/12/maharashtra-police-bharti-2019.html | https://en.wikipedia.org/wiki?curid=1798797 |
International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. examines the dynamics of the global financial system, international monetary systems, balance of payments, exchange rates, foreign direct investment, and how these topics relate to international trade. Sometimes referred to as multinational finance, international finance is additionally concerned with matters of international financial management. Investors and multinational corporations must assess and manage international risks such as political risk and foreign exchange risk, including transaction exposure, economic exposure, and translation exposure. Some examples of key concepts within international finance are the Mundell–Fleming model, the optimum currency area theory, purchasing power parity, interest rate parity, and the international Fisher effect. Whereas the study of international trade makes use of mostly microeconomic concepts, international finance research investigates predominantly macroeconomic concepts | https://en.wikipedia.org/wiki?curid=1799316 |
International finance The three major components setting international finance apart from its purely domestic counterpart are as follows: These major dimensions of international finance largely stem from the fact that sovereign nations have the right and power to issue currencies, formulate their own economic policies, impose taxes, and regulate movement of people, goods, and capital across their borders. | https://en.wikipedia.org/wiki?curid=1799316 |
Mutualism (economic theory) Mutualism is an anarchist school of thought and economic theory that advocates a socialist society based on free markets and usufructs, i.e. occupation and use property norms. One implementation of this system involves the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration. Mutualism is based on a version of the labor theory of value which it uses as its basis for determining economic value. According to mutualist theory, when a worker sells the product of their labor, they ought to receive money, goods, or services in exchange that are equal in economic value, embodying "the amount of labor necessary to produce an article of exactly similar and equal utility". Mutualism was popularized by the writings of anarchist philosopher Pierre-Joseph Proudhon. Mutualists are opposed to individuals receiving income through loans, investments and rent under capitalist social relations. Although personally opposed to this type of income, Proudhon expressed that he had never intended "to forbid or suppress, by sovereign decree, ground rent and interest on capital. I think that all these manifestations of human activity should remain free and voluntary for all: I ask for them no modifications, restrictions or suppressions, other than those which result naturally and of necessity from the universalization of the principle of reciprocity which I propose" | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) As long as they ensure the worker's right to the full product of their labor, mutualists support markets and property in the product of labor, differentiating between capitalist private property (productive property) and personal property (private property). Mutualists argue for conditional titles to land, whose ownership is legitimate only so long as it remains in use or occupation (which Proudhon called possession), a type of private property with strong abandonment criteria. This contrasts with capitalist non-proviso Lockean sticky property, where owners maintain title more or less until they consent to gift or sell it. As libertarian socialists, mutualists distinguish their market socialism from state socialism and do not advocate state control over the means of production. Instead, each person possesses a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market. Benjamin Tucker wrote of Proudhon that "though opposed to socializing the ownership of capital, he aimed nevertheless to socialize its effects by making its use beneficial to all instead of a means of impoverishing the many to enrich the few [...] by subjecting capital to the natural law of competition, thus bringing the price of its own use down to cost". Although similar to the economic doctrines of the 19th-century American individualist anarchists, mutualism is in favor of large industries | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Mutualism has been retrospectively characterized sometimes as being a form of individualist anarchism and as ideologically situated between individualist and collectivist forms of anarchism as well. Proudhon himself described the liberty he pursued as "the synthesis of communism and property". As a result, some consider mutualism to be part of free-market anarchism, individualist anarchism and market-oriented left-libertarianism while others regard it to be part of social anarchism. As a term, mutualism has seen a variety of related uses. Charles Fourier first used the French term "mutualisme" in 1822, although the reference was not to an economic system. The first use of the noun mutualist was in the "New-Harmony Gazette" by an American Owenite in 1826. In the early 1830s, a French labor organization in Lyons called themselves the Mutuellists. Pierre-Joseph Proudhon was involved with the Lyons mutualists and later adopted the name to describe his own teachings. In "What Is Mutualism?", Clarence Lee Swartz gives his own account of the origin of the term, claiming that "[t]he word "mutualism" seems to have been first used by John Gray, an English writer, in 1832". When Gray's 1825 "Lecture on Human Happiness" was first published in the United States in 1826, the publishers appended the "Preamble and Constitution of the Friendly Association for Mutual Interests, Located at Valley Forge". 1826 also saw the publication of the "Constitution of the Friendly Association for Mutual Interests at Kendal, Ohio" | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) By 1846, Proudhon was speaking of "mutualité" in his writings and he used the term "mutuellisme" at least as early as 1848 in his "Programme Révolutionnaire". In 1850, William Batchelder Greene used the term mutualism to describe a mutual credit system similar to that of Proudhon. In 1850, the American newspaper "The Spirit of the Age", edited by William Henry Channing, published proposals for a mutualist township by Joshua King Ingalls and Albert Brisbane, together with works by Proudhon, Greene, Pierre Leroux and others. Proudhon ran for the French Constituent Assembly in April 1848, but was not elected, although his name appeared on the ballots in Paris, Lyon, Besançon and Lille. He was successful in the complementary elections of June 4 and served as a deputy during the debates over the National Workshops, created by the 25 February 1848 decree passed by Republican Louis Blanc. The workshops were to give work to the unemployed. Proudhon was never enthusiastic about such workshops, perceiving them to be essentially charitable institutions that did not resolve the problems of the economic system. He was against their elimination unless an alternative could be found for the workers who relied on the workshops for subsistence. Proudhon was surprised by the French Revolution of 1848. He participated in the February uprising and the composition of what he termed "the first republican proclamation" of the new republic | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) However, he had misgivings about the new provisional government headed by Jacques-Charles Dupont de l'Eure (1767–1855), who since the French Revolution in 1789 had been a longstanding politician, although often in the opposition. Proudhon published his own perspective for reform which was completed in 1849, "Solution du problème social" ("Solution of the Social Problem"), in which he laid out a program of mutual financial cooperation among workers. He believed this would transfer control of economic relations from capitalists and financiers to workers. The central part of his plan was the establishment of a bank to provide credit at a very low rate of interest and the issuing of exchange notes that would circulate instead of money based on gold. Mutualism has been associated with two types of currency reform. Labor notes were first discussed in Owenite circles and received their first practical test in 1827 in the Time Store of former New Harmony member and individualist anarchist Josiah Warren. Mutual banking aimed at the monetization of all forms of wealth and the extension of free credit. It is most closely associated with William Batchelder Greene, but Greene drew from the work of Proudhon, Edward Kellogg and William Beck as well as from the land bank tradition. Mutualism can in many ways be considered the original anarchy since Pierre-Joseph Proudhon was the first to identify himself as an anarchist. Although mutualism is generally associated with anarchism, it is not necessarily anarchist | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Historian Wendy McElroy reports that American individualist anarchism received an important influence of three European thinkers. One of the most important of these influences was the French political philosopher Pierre-Joseph Proudhon, whose words "Liberty is not the Daughter But the Mother of Order" appeared as a motto on "Liberty"s masthead. "Liberty" was an influential American individualist anarchist publication of Benjamin Tucker. For American anarchist historian Eunice Minette Schuster, "[i]t is apparent [...] that Proudhonian Anarchism was to be found in the United States at least as early as 1848 and that it was not conscious of its affinity to the Individualist Anarchism of Josiah Warren and Stephen Pearl Andrews. [...] William B. Greene presented this Proudhonian Mutualism in its purest and most systematic form". After 1850, Greene became active in labor reform. He was elected vice-president of the New England Labor Reform League, the majority of the members holding to Proudhon's scheme of mutual banking; and in 1869 president of the Massachusetts Labor Union. He then publishes "Socialistic, Mutualistic, and Financial Fragments" (1875). He saw mutualism as the synthesis of "liberty and order". His "associationism [...] is checked by individualism. [...] "Mind your own business", "Judge not that ye be not judged". Over matters which are purely personal, as for example, moral conduct, the individual is sovereign as well as over that which he himself produces | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) For this reason, he demands "mutuality" in marriage—the equal right of a woman to her own personal freedom and property". Tucker later connected his economic views with those of Proudhon, Warren and Karl Marx, taking sides with the first two while also arguing against American anti-socialists who declared socialism as imported, stating: Mutualist ideas found fertile ground in the 19th century in Spain. In Spain, Ramón de la Sagra established the anarchist journal "El Porvenir" in A Coruña in 1845 which was inspired by Proudhon's ideas. The Catalan politician Francesc Pi i Margall became the principal translator of Proudhon's works into Spanish and later briefly became president of Spain in 1873 while being the leader of the Democratic Republican Federal Party. According to George Woodcock, "[t]hese translations were to have a profound and lasting effect on the development of Spanish anarchism after 1870, but before that time Proudhonian ideas, as interpreted by Pi, already provided much of the inspiration for the federalist movement which sprang up in the early 1860's". According to the "Encyclopædia Britannica": "During the Spanish revolution of 1873, Pi y Margall attempted to establish a decentralized, or cantonalist, political system on Proudhonian lines" | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Pi i Margall was a dedicated theorist in his own right, especially through book-length works such as "La reacción y la revolución" ("Reaction and Revolution" from 1855), "Las nacionalidades" ("Nationalities" from 1877) and "La Federación" ("The Federation" from 1880). For prominent anarcho-syndicalist Rudolf Rocker, "[t]he first movement of the Spanish workers was strongly influenced by the ideas of Pi y Margall, leader of the Spanish Federalists and disciple of Proudhon. Pi y Margall was one of the outstanding theorists of his time and had a powerful influence on the development of libertarian ideas in Spain. His political ideas had much in common with those of Richard Price, Joseph Priestly ["sic"], Thomas Paine, Jefferson, and other representatives of the Anglo-American liberalism of the first period. He wanted to limit the power of the state to a minimum and gradually replace it by a Socialist economic order". According to historian of the First International G. M. Stekloff, in April 1856 "arrived from Paris a deputation of Proudhonist workers whose aim it was to bring about the foundation of a Universal League of Workers. The object of the League was the social emancipation of the working class, which, it was held, could only be achieved by a union of the workers of all lands against international capital | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Since the deputation was one of Proudhonists, of course this emancipation was to be secured, not by political methods, but purely by economic means, through the foundation of productive and distributive co-operatives". Stekloff continues by saying that "[i]t was in the 1863 elections that for the first time workers' candidates were run in opposition to bourgeois republicans, but they secured very few votes. [...] [A] group of working-class Proudhonists (among whom were Murat and Tolain, who were subsequently to participate in the founding of the (First) International issued the famous Manifesto of the Sixty, which, though extremely moderate in tone, marked a turning point in the history of the French movement. For years and years the bourgeois liberals had been insisting that the revolution of 1789 had abolished class distinctions. The Manifesto of the Sixty loudly proclaimed that classes still existed. These classes were the bourgeoisie and the proletariat. The latter had its specific class interests, which none but workers could be trusted to defend. The inference drawn by the Manifesto was that there must be independent working-class candidates". For Stekloff, "the Proudhonists, who were at that date the leaders of the French section of the International | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) They looked upon the International Workingmen's Association as a sort of academy or synagogue, where Talmudists or similar experts could "investigate" the workers' problem; wherein the spirit of Proudhon they could excogitate means for an accurate solution of the problem, without being disturbed by the stresses of a political campaign. Thus Fribourg, voicing the opinions of the Parisian group of the Proudhonists (Tolain and Co.) assured his readers that "the International was the greatest attempt ever made in modern times to aid the proletariat towards the conquest, by peaceful, constitutional, and moral methods, of the place which rightly belongs to the workers in the sunshine of civilisation". According to Stekoff, the Belgian Federation "threw in its lot with the anarchist International at its Brussels Congress, held in December, 1872. [...] [T]hose taking part in the socialist movement of the Belgian intelligentsia were inspired by Proudhonist ideas which naturally led them to oppose the Marxist outlook". Mutualism also had a considerable influence in the Paris Commune. George Woodcock manifests that "a notable contribution to the activities of the Commune and particularly to the organization of public services was made by members of various anarchist factions, including the mutualists Courbet, Longuet, and Vermorel, the libertarian collectivists Varlin, Malon, and Lefrangais, and the bakuninists Elie and Elisée Reclus and Louise Michel" | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) 19th-century mutualists considered themselves libertarian socialists and are still considered libertarian socialists to this day. While oriented towards cooperation, mutualists favor free market solutions, believing that most inequalities are the result of preferential conditions created by government intervention. Mutualism is something of a middle way between classical economics and socialism of the collectivist variety, with some characteristics of both. As for capital goods (man-made, non-land means of production), mutualist opinions differs on whether these should be commonly managed public assets or private property. Contemporary mutualist Kevin Carson considers mutualism to be free-market socialism. Proudhon supported labor-owned cooperative firms and associations, for "we need not hesitate, for we have no choice. [...] [I]t is necessary to form an association among workers [...] because without that, they would remain related as subordinates and superiors, and there would ensue two [...] castes of masters and wage-workers, which is repugnant to a free and democratic society" and so "it becomes necessary for the workers to form themselves into democratic societies, with equal conditions for all members, on pain of a relapse into feudalism" | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) In the preface to his "Studies in Mutualist Political Economy", Carson describes this work as "an attempt to revive individualist anarchist political economy, to incorporate the useful developments of the last hundred years, and to make it relevant to the problems of the twenty-first century". Contemporary mutualists are among those involved in the Alliance of the Libertarian Left and in the Voluntary Cooperation Movement. Contemporary mutualist Kevin Carson holds that capitalism has been founded on "an act of robbery as massive as feudalism" and argues that capitalism could not exist in the absence of a state. He says that "[i]t is state intervention that distinguishes capitalism from the free market". Carson does not define capitalism in the idealized sense, but he says that when he talks about capitalism he is referring to what he calls actually existing capitalism. He believes the term "laissez-faire" capitalism is an oxymoron because capitalism, he argues, is "organization of society, incorporating elements of tax, usury, landlordism, and tariff, which thus denies the Free Market while pretending to exemplify it". However, he says he has no quarrel with anarcho-capitalists who use the term "laissez-faire" capitalism and distinguish it from actually existing capitalism. Carson says he has deliberately chosen to resurrect an old definition of the term. However, many anarchists, including mutualists, continue to use the term and do not consider it an old definition of the term | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Carson argues that the centralization of wealth into a class hierarchy is due to state intervention to protect the ruling class by using a money monopoly, granting patents and subsidies to corporations, imposing discriminatory taxation and intervening militarily to gain access to international markets. Carson's thesis is that an authentic free-market economy would not be capitalism as the separation of labor from ownership and the subordination of labor to capital would be impossible, bringing a classless society where people could easily choose between working as a freelancer, working for a fair wage, taking part of a cooperative, or being an entrepreneur. As did Benjamin Tucker before him, he notes that a mutualist free-market system would involve significantly different property rights than capitalism is based on, particularly in terms of land and intellectual property. The primary aspects of mutualism are free association, reciprocity and gradualism, or dual power. Mutualism is often described by its proponents as advocating an anti-capitalist free market. Mutualists argue that most of the economic problems associated with capitalism each amount to a violation of the cost principle, or as Josiah Warren interchangeably said, the cost the limit of price. It was inspired by the labor theory of value which was popularized—although not invented—by Adam Smith in 1776 (Proudhon mentioned Smith as an inspiration) | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) The labor theory of value holds that the actual price of a thing (or the true cost) is the amount of labor that was undertaken to produce it. In Warren's terms, cost should be the limit of price, with cost referring to the amount of labor required to produce a good or service. Anyone who sells goods should charge no more than the cost to himself of acquiring these goods. Mutualism holds that producers should exchange their goods at cost-value using systems of contract. While Proudhon's early definitions of cost-value were based on fixed assumptions about the value of labor-hours, he later redefined cost-value to include other factors such as the intensity of labor, the nature of the work involved and so on. He also expanded his notions of contract into expanded notions of federation. As Proudhon argued: Dual power is the process of building alternative institutions to the ones that already exist in modern society. Originally theorized by Proudhon, it has become adopted by many anti-state movements like autonomism and agorism. Proudhon described it as such: Beneath the governmental machinery, in the shadow of political institutions, out of the sight of statemen and priests, society is producing its own organism, slowly and silently; and constructing a new order, the expression of its vitality and autonomy | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Dual power should not be confused with the dual power popularized by Vladimir Lenin as it was also theorized by Proudhon and it refers to a more specific scenario where a revolutionary entity intentionally maintains the structure of the previous political institutions until the power of the previous institution is weakened enough such that the revolutionary entity can overtake it entirely. Dual power as implemented by mutualists and agorists is the development of the alternative institution itself. Mutualists argue that association is only necessary where there is an organic combination of forces. For instance, an operation that requires specialization and many different workers performing their individual tasks to complete a unified product, i.e. a factory. In this situation, workers are inherently dependent on each other—and without association they are related as subordinate and superior, master and wage-slave. An operation that can be performed by an individual without the help of specialized workers does not require association. Proudhon argued that peasants do not require societal form and only feigned association for the purposes of solidarity in abolishing rents, buying clubs and so on. He recognized that their work is inherently sovereign and free. In commenting on the degree of association that is preferable, Proudhon said: In cases in which production requires great division of labour, it is necessary to form an association among the workers [.. | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) ] because without that they would remain isolated as subordinates and superiors, and there would ensue two industrial castes of masters and wage workers, which is repugnant in a free and democratic society. But where the product can be obtained by the action of an individual or a family, [...] there is no opportunity for association. For Proudhon, mutualism involved creating industrial democracy, a system where workplaces would be "handed over to democratically organised workers' associations. [...] We want these associations to be models for agriculture, industry and trade, the pioneering core of that vast federation of companies and societies woven into the common cloth of the democratic social Republic". He urged "workers to form themselves into democratic societies, with equal conditions for all members, on pain of a relapse into feudalism". This would result in "[c]apitalistic and proprietary exploitation, stopped everywhere, the wage system abolished, equal and just exchange guaranteed". Workers would no longer sell their labour to a capitalist but rather work for themselves in co-operatives. As Robert Graham notes: "Proudhon's market socialism is indissolubly linked to his notions of industrial democracy and workers' self-management". K. Steven Vincent notes in his in-depth analysis of this aspect of Proudhon's ideas that "Proudhon consistently advanced a program of industrial democracy which would return control and direction of the economy to the workers". For Proudhon, "strong workers' associations [ | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) ..] would enable the workers to determine jointly by election how the enterprise was to be directed and operated on a day-to-day basis". Mutualists argue that free banking should be taken back by the people to establish systems of free credit. They contend that banks have a monopoly on credit, just as capitalists have a monopoly on the means of production and landlords have a monopoly on land. Banks are essentially creating money by lending out deposits that do not actually belong to them, then charging interest on the difference. Mutualists argue that by establishing a democratically run mutual bank or credit union, it would be possible to issue free credit so that money could be created for the benefit of the participants rather than for the benefit of the bankers. Individualist anarchists noted for their detailed views on mutualist banking include Pierre-Joseph Proudhon, William Batchelder Greene and Lysander Spooner. Some modern forms of mutual credit are LETS and the Ripple monetary system project. In a session of the French legislature, Proudhon proposed a government-imposed income tax to fund his mutual banking scheme, with some tax brackets reaching as high as 33 percent and 50 percent, but it was turned down by the legislature. This income tax Proudhon proposed to fund his bank was to be levied on rents, interest, debts and salaries | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) Specifically, Proudhon's proposed law would have required all capitalists and stockholders to disburse one-sixth of their income to their tenants and debtors and another sixth to the national treasury to fund the bank. This scheme was vehemently objected to by others in the legislature, including Frédéric Bastiat. The reason given for the income tax's rejection was that it would result in economic ruin and that it violated "the right of property". In his debates with Bastiat, Proudhon did once propose funding a national bank with a voluntary tax of 1%. Proudhon also argued for the abolition of all taxes. Pierre-Joseph Proudhon was one of the most famous philosophers who articulated thoughts on the nature of property. He is known for claiming that "property is theft", but is less known for the claims that "property is liberty" and "property is impossible". According to Colin Ward, Proudhon did not see a contradiction between these slogans. This was because Proudhon distinguished between what he considered to be two distinct forms of property often bound up in the single label. To the mutualist, this is the distinction between property created by coercion and property created by labor. Property is theft "when it is related to a landowner or capitalist whose ownership is derived from conquest or exploitation and [is] only maintained through the state, property laws, police, and an army". Property is freedom for "the peasant or artisan family [who have] a natural right to a home, land [they may] cultivate, [.. | https://en.wikipedia.org/wiki?curid=1799997 |
Mutualism (economic theory) ] to tools of a trade" and the fruits of that cultivation—but not to ownership or control of the lands and lives of others. The former is considered illegitimate property, the latter legitimate property. Proudhon argued that property in the product of labor is essential to liberty while property that strayed from possession ("occupancy and use") was the basis for tyranny and would lead a society to destroy itself. The conception of entitlement property as a destructive force and illegitimate institution can be seen in this quote by Proudhon: Then if we are associated for the sake of liberty, equality, and security, we are not associated for the sake of property; then if property is a natural right, this natural right is not social, but anti-social. Property and society are utterly irreconcilable institutions. It is as impossible to associate two proprietors as to join two magnets by their opposite poles. Either society must perish, or it must destroy property. If property is a natural, absolute, imprescriptible, and inalienable right, why, in all ages, has there been so much speculation as to its origin? – for this is one of its distinguishing characteristics | https://en.wikipedia.org/wiki?curid=1799997 |
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