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Economics History - Coggle Diagram
Economics History
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High Noon: 1870 - 1913
Rise of mass production and assembly lines. Systematic research to develop products and then automate the manufacture.
New institutions such as limited liability companies, bankruptcy law, central bank, welfare state, labour laws etc
Referred to first age of globalization and considered to be result of liberalism, but it wasn't so. Protectionism increased in US and Western Europe. Latin American countries whose forced free traded agreements expired, added new tariffs. Government also had increased role as in labor regulations, social welfare schemes, public investment in infrastructure etc
Liberalism: Started with Thomas Hobbes and John Locke in 17th century
Initially stood for individual's right to do as he pleases with his private property, the state would maintain law and order and was a "minimal state"
Now refers to advocacy of democracy. In US, liberal is considered left of center, which is social democrats in Europe. In Europe liberals are equivalent to libertarians in the US
Ne0-liberalism - advocates classical minimal state when it comes to economic policy but accepts central bank with note issue monopoly. Liberals believe there should be competition in production of money too.
The Turmoil: 1914 -1945
First world war indirectly caused by imperialistic capitalism. Globalization driven by imperialism rather than market forces
Russian revolution and socialism was a counterpoint to capitalism. Led to centralized planning. Marx envisioned matured capitalistic societies to move to socialism since they would have the institutions, Russia lacked those and had to wing. Saw 5% growth in per-capita income but also millions of deaths due to repression and famine.
Great Depression of 1929 was also a blow to capitalism. Private spending fell, debts went unpaid, banks could not lend leading to a downward spiral. Tying currency to a gold standard and a focus on balanced budgets meant government could not spend and this led to a further downward spiral
The great depression led to reforms in the US. First new deal, separation of investment and commercial banking, insurance on deposits, stock market regulation, public infrastructure work. Second new deal led to social security act, unemployment insurance and the Wagner act that strengthened trade unions
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