Chapter 3 Characteristics of
Market System Capitalism
and Political Economy

         Updated 12/29/15             


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I. Basic Characteristics of Capitalism 2 videos 
II. Modern Capitalism  2 videos
III. Criticism of Modern Capitalism 6
IV. How Markets Work: The Circular Flow
V. Other Economic Systems
3 video
VI. Political Systems 9 videos redesigned 11/23/15

VII. Politics in the U.S. Democratic Republic 1 video
VIII. Conclusion 1 video
IX. Chapter Videos on one page
X. Quiz on Economic Systems   
XI. Political Economy Book Summaries

XII. Are Political Controversies Created?

 One-page Abstracts for Groups
Capitalism and
Our Democratic Federalist Republic


I. Basic Characteristics of Capitalism (market economy)
    A. Economic systems determine what to produce, how to
         produce, and who will receive production. 
    B. An economic system must also have the ability to adapt
         to changing economic environments. For example, How
         will America's economic system adapt to changes caused
         by September 11?
    C. Adam Smith described the beginning of market based Capitalism.
         1. His 1776 book The Wealth of Nations first described
             of capitalism as practiced in 18th century England. 
         2. Why is The Wealth of Nations So Important? Video
         3. For more visit
    D. Basic characteristics described by Adam Smith
         1. Private property-the right to own resources and bequeath property
         2. Freedom of enterprise-own a business
         3. Freedom of economic choice-work/not work, spend/not spend ...
         4. Role of self-interest
             a. People are by nature economic creatures
             b. Self-interest is a fundamental characteristic of people
         5. Competitive market system
             a. Many buyers and sellers
             b. Market participants, buyers and sellers, 
                  have little control over price
             c. Competition performs the organizing and 
                  controlling functions for a market economy
         6. Limited government ("Laissez-faire ")
             a. Government should let markets be with a hands-off philosophy
             b. Acceptable government involvement has become an important
                 political question in the United States from the revolution.
             c. Francois Quesnay popularized term laissez faire.
         7. Characteristics of capitalism lead to Creative Destruction
             a. First described by 20th century sociologist and economist
              Joseph Schumpeter it was an important new  idea of capitalism. 
             b. Change involves the creation of technology, improved economic
                 structures and the destruction of inefficient  economic structures.
             c. Capitalism allows this destruction to take place.
             d. The fight between labor and management has also brought much
             e. Read excerpt from Dynamic Economics and listen on YouTube

 E. Understanding Capitalism Readings updated 11/26/15
      1. Myth of Market Capitalism
      2. Business Isn't Capitalism 5/3/14
      3. The Fall of Rome reviews the market system of the Roman
          empire and how the author believes government failures 
          caused its demise.
      4. Great Economists: Classical Economics and its Forerunners
      5. has a somewhat conservative view of
      6. The Shared Capitalism Institute a somewhat liberal view
      7. Blackstone's Byron Wien, successful capitalist states
          lessons of his first 80 years
      8. American Misconceptions about Capitalism  6/13
F.  Creative Destruction
       1. Let  Us Now Praise Private Equity explores the application
           of creative destruction to poor job creation since the great
       2. Carnival of Creative Destruction: a futurist predicts change
       3. Rust Belt Almanac  Mid-West decline and Creative
G. Videos/Audios
     1. BBC audio on the History of Capitalism
     2. The Success and Price of Capitalism
Video 61 min 

Editor's comment concerning free trade
Free trade increases supply which forces price down
resulting in some combination of lower profit or lower
cost. It is an example of creative destruction. Owners
and managers are good at maintaining profit and 
will try to lower the cost of materials, labor or
overhead. Workers often bear brunt of this process.
It was worse before the federal income tax as some
tariffs not needed to protecting infant industries made
necessities expensive and many capitalists very rich.



II. Modern Capitalism has Many New Features
      A. Importance of Capital Goods and Technology
      B. Specialization
          1) Complexity limits product lines.
          2) Division of Labor allows specialization by ability, training.
     C. Modern Capitalism has many rent seekers trying to increasing

wealth through politics.
          1. Corporate Capitalism: a capitalist marketplace
              characterized by the dominance of hierarchical,
              bureaucratic corporations
State Capitalism: economy driven by the state, less
              reliance on markets practiced in China.
 3. Money Manager Capitalism: money managers dominate
  savings and investing and markets impacting economy's
4. Patrimonial Capitalism is living off of inherited wealth
          5. Crony Capitalism has been around from the beginning.
              a. New name is Corporate Welfare
              b. How crony capitalism corrupts the free market 30 min video
              c. Hunter Lewis on crony-capitalism 30 min video
              d. Geithner and Summers Crony Capitalist?
Crony Capitalism Index
     E. Democratic Capitalism vs. Capitalistic Democracy
          is about cost effectiveness of democracy.
F. Readings
         1. Capital in the Twenty-First Century was a very popular
             2014 book by Thomas Pikett.
             a. Capitalism vs. Democracy editorial 1/28/14
             b Capitalism in the Twenty-First Century 3/25/14
             c. Taking on Adam Smith and Karl Marx NYT 4/19/14
             d. Sequester Capitalism, Democracy and Money Theories

        2. Capitalism is Not to Blame for Middle-Class Plight

        3. Capitalism is a concise overview from
Calvin and Hobbes Explain Modern Capitalism 

Sources of Economic  Rent Seeking


"rent-seeking is expending resources on political activity to increase one's share of existing wealth without creating wealth"


III. Criticism of Modern Capitalism
        A. Videos
            1.The Successes and Price of Capitalism  
            2. Capitalism in Crisis 1:40 is well-done.
Seven Bad Ideas from the left
            4. The Crisis of Capitalism, The Critique from the right
            5. Unfettered Capitalism, Chris Hedges & Michael Moore 8:44
            6. The End of Capitalism
The Private Sector against corruption 30 min
            8. Great Recession from a Classical-Keynesian View
      from Roger Farmer Pepperdine School of Public Policy

a.  Who are the Academic Sc 9.11
b. Refining Classical Economics 9.29
         c. Effect of the Great Depression 9.14
d. 1970's oil shock shocks the world of economics 8.52
   e . How bad is the economy and where is it going 7.41      
 B . Readings
B. Philosophy
             1. Why Intellectuals Hate Capitalism by Robert Nozick
             2. Is Capitalism Moral? A Commonwealth Club Podcast
             3. Coercive power of capitalism
             4.  Capitalism and Inequality
(Jerry Z. Miller, Foreign Affairs)  
                  Without social safety nets capitalism is doomed through 
                  social disorder.
 Editor's Note: I've seen a lot of verbiage 
                  blaming Capitalism for the inequality in the United States.
Inequality is a political question. It is the responsibility of
voters through politicians to equitably distribute production
                  without substantially limiting the productive capabilities of
capitalism. An example would be how well the economy 
                  adjusted to the  2007-8 Balance Sheet 
Great Recession.  
  The income distribution problem it caused has been helped
                  by Obama Care and now its up to our economy to make 
                  sure it is economically efficient.
                  See People Not Voting Their Pocketbook is Killing the Poor
. Capitalism and Business
Reimagining Capitalism: Documentary of the Week
             b. Chinese Capitalism Better than American Capitalism
             c. Hoodwinked
An Economic Hit Man Reveals Why the
                 World Financial Markets Imploded--and What We 
                 Need to Do to Remake Them, by 
John Perkins
How Will Capitalism End 6/14
             e Has Capitalism Reform Reached a Turning Point
             f.   Revisiting Old Argument About Impact Capitalism
             g.  Economic Report of the President 2014 is positive
             f. The Great Recession
looks at a recent capitalistic failures.


Criticize Dramatically

Some Question his motives as Michael Moore's estimated net worth is 50 million dollars.


Ida M Tarbell crop.jpg


Ida Tarbell an  investigative journalist called a Muckrakers known. She exposed Standard Oil Trust. Working for McClure Magazine and other monthly magazines they help educated the public from 1890 to 1929 in what is known as the Progressive Era. Her work represents how we slowly improve the people properly represented by our democratic republic.

IV. How Markets Work: The Circular Flow

Our Free Internet Libraries
 improve grades and careers.


V. Other Economic Systems       Please 
       A. Introduction
            1. Pure capitalism of Adam Smith never existed.
            2. Recent economic systems are Mixed Economies    
(a mixture of Capitalism and Socialism) See
                Democratic Capitalism vs. Capitalistic Democracy
       B. Other Economic Systems         
           1. Socialism has collective ownership and management
               of economic resources that are more equally distributed.
           2. Democratic Socialism as practiced in Western Europe 
               has public ownership of key industries such as 
               transportation and communication.
               a. Economic systems of Europe began moving away
                   from socialism toward capitalism in the late 1970's.
               b. Margaret Thatcher former prime minister of England 
                   started this trend.
               c. Ronald Reagan agreed and stressed the market
                   system during his presidency. 
               d. Capitalism and Socialism
                   1. Capitalism vs. Socialism a Crash Course Video in 
           World History
#33 uses humor teaching the basics.
2. Laissez fair Capitalism vs. Socialism Video
See Social democracy 
                       Editors Question: Will China's system morph into
                       Democratic Socialism?

         3. Communism is the ideal of those practicing a "Marxian
             system. " Bolsheviks wanted immediate revolution.
             a. 19th century philosopher Karl Marx created the system.
             b. Wealth is collectively owned and managed in this
                  planned,` command economy.
c. The  Paris Commune of 1871 along with the French 
                 Revolution explains why so many feared change
                 promised by new liberal economic systems.
             d. Some equate communism with a totalitarian political 
   system democratic communism has never existed.


         4. Fabian Economics came from a British socialist  organization
             whose purpose was to advance socialism as gradualist,
             reformist rather than revolution.[1][2]
         5. Feudalism structures society around relationships the
             holding of land in exchange for service or labor
             a. New Feudalism refers to a theorized contemporary
                 rebirth of policies of governance, economy and 
                 public life
reminiscent of a feudal society.
                    b. Feudalism Then and Now
         6. Traditional economy is directed by custom.
         7. Oligarchy a few people from royalty, wealth, family ties,
             education, corporate, or military have control. U.S. ?
         8. Plutocracy is rule by wealthy and used by developing countries.
             a. plutocrats vs. populist is a controversial topic.
             b. American Dynasty summarizes Bush family plutocracy 
         9. Kleptocracy government exists to increase the
             personal wealth and political power of officials Russia?
       10. Theocracy deity is officially recognized as the civil ruler
             and official policy is governed by officials regarded as
             divinely guided  see
Vatican City  Iran and Sikyong
C. Readings for Other Economic Systems
           1. Using Two Cows explore using resources.
                Infographic 3/1/13
           2. Economic system has many concise definitions.
           3. Harvey - Is Marxism Relevant Today?  
takes a while to load.
            4. Presidential Courage explores how Ronald
                Reagan deplored Communism.
            5. 5 Questions Economic Systems Must Answer
            6. Book Collections
Classics of Political Economy

Classics of Political and Military Science
       D. Videos for Other Economic Systems
Economic Systems Capitalism vs. Communism  13 min
b. Capitalism and Socialism is more of an editorial. 14 min 
c.  When Capitalism is Great and Not So Great
Milton Friedman Versus A Socialist  4 min
Why Socialism Failed

Degrees of Socialism










Ten-Minute Video

Country Economic Policies
is where one nation assumes political or economic control over another nation. The practice has occurred throughout history and has been compatible with all economic and political systems. See Greece and the Endgame of the Neocolonial Model of Exploitation

2. Mercantilism is economic nationalism to build a  wealthy powerful state. It is system of political economy designed to enrich the country by restraining imports and encouraging exports. Some feel  Neomercantilism is practices by Japan, China and Germany.

3. Current Political Economy Controversies create difficult policy questions.


Ronald Reagan and Margaret Thatcher at the White House, 16 November 1988 
Click to enlarge.














Editors Note: Most unbiased observers would feel uncomfortable calling Democratic Socialism radical. Followed by many of the great countries of Europe after WWII, it did very well but some would feel it drifted toward communism. by trying to redistribute too much wealth from the top toward the bottom. Prime Minister Margaret Thatcher pushed Great Britan toward capitalism by selling many large state owned industries and instituted business deregulation. Ronald Reagan followed suit in the U.S. though he concentrated on deregulation. Some 30 years later Thatcher's Great Britan has fared better than more socialistic continental European countries as politicians have allowed government spending and borrowing to get out of control. Conservatives in America feel they must stop U.S. politicians from doing the same thing.

VI. Political Systems

Our Democratic Federalist Republic

A. The Basics Video 13:28
B. A Political System consists of a government and politics.
    1. Republic government exists when a constitutionally determined
        government of elected leaders operating according to laws to protect
        individual rights which include equality, liberty, property and  necessity
        of consent.
        a. There are many application of Republican concepts. What constitutes a
            right and their relative importance of rights has been continually debated
        b. John Adams "a government, in which all men, rich and poor,
            magistrates and subjects, officers and people, masters and servants,
            the first citizen and the last, are equally subject to the laws."
        c. In United States v. Cruikshank (1875) the Supreme Court ruled that
            "equal citizens" was inherent to the republic ideal.
        d. Colonial America developed in an untamed wilderness far from the
            mother country. This was a  unique historical circumstance resulted
            in the concept of American Exceptionalism.


Editor's notes on U.S. government
Political science developed during the Age of Enlightenment . In the United State a philosophy State Liberalism developed with many ideas coming from John Lock's Second Treaties on civil government. Liberalism seeks individual freedom under the law.

Liberal values from Lock concern an individual's natural rights of equality, liberty, property, the necessity of consent, and limited government.  Order and importance of these rights was then and still is the focal point of U.S. political discussions. For about three-hundred years these discussions have centered on minimal state liberalism (today's conservatism) vs. active state liberalism (today's liberalism). The question was to what degree should   government get involved with the protection of which of an individual's natural rights. How much property through taxes should be used to foster equality?

Five recurring themes have been present in these political discussions.
1) American Exceptionalism  exists because the country was formed at a unique time and place which allowed it to be special with a responsibility to provide an example of appropriate government. 2) The dynamic flexibility of America Liberalism has allowed concepts concerning individual rights to adjust as required by evolving circumstances. 3) The
reconstitution of American government after the Civil War, the New Deal, and other less significant reconstitutions has been beneficial though controversial. 4) An expansion of "we the people" from white men of property, to white men, to all men, to all citizens, and recently continued with the addition of homosexuals.  5) Space, the freedom to separate individuals from oppressive government, religion, and other potentially tyrannical organizations has continued though some feel modern America has lost some of this space. Source: Cycles of American Political Thought

    2. Federalism divides powers between member units so that political order
        is constitutionally decentralized between at least two units. Each level has
        some final authority and has some areas of self government.
a. Federalism in the United States protects states rights with a concept
            of Dual Federalism but hardships caused by the Great Depression led
            some toward the concept of
Cooperative Federalism.
       b. A conservative look at Federalism video 1.38
        c. The political Revolution of 1800 entailed Jefferson's Republicans
            taking over for the Federalist Washington, Hamilton and Adams. It
            began a 200 plus year battle concerning Federal Government power.  

Editor's Note: Secretary of the Treasury Alexander Hamilton orchestrated  the first federal tax on imports in 1789. Many believers in state rights were unhappy even though tax revenue was needed to pay Revolutionary War debt of both state and federal governments. Relative to GDP, it was the largest federal debt to exist until 1933 when revenue a collapse caused D3 (deep-do-do). Hamilton began the practices of increasing taxes (though not enough) to pay for war, paying interest and paying principle over a number of years. The practice of refinancing principal began after WWI. Some call this passing debt to our children but it has been 100 years and none has been paid so far. The practice of not increasing taxes to pay for war started with Bush II when he cut taxes while starting two wars and increasing Medicare. Hamilton (to the dismay of       Jefferson) also began the practices of the federal government paying state debt with many states   showing their appreciation by telling the federal government to stay out of state business. This    practice continues today. Source       

    3. Democracy exists when government power resides in a constitutionally
        determined electorate each with an equal say in determining majority will.
        Political decisions are such that majority's power is absolute and unlimited.
        The most difficult issue concerning democracy success has always been
        controlling Majority Factions as states in The Federalist Papers
Founding father Madison "...defines a faction as "a number of citizens, whether amounting to a minority or majority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community".[14]
Kinds of Democracy

1. Presidential Democracy has a president and the legislative body whose 
    functions are separated with checks and balances limiting their power. 
    a. American Politics Are we a Democracy? A Republic? A Polyarchy?
        In this 7.04 video Noam Chomsky breaks down his view of
        politics today and the politics that our founders envisioned.
    b. Current Political Economy Controversies provide discussion areas.
2. Parliamentary Democracy as practiced in Great Brittan has an executive
    ranch that derives its legitimacy from and is held accountable to a legislature
    (parliament). The executive and legislative branches are thus interconnected. 
    a. Head of state is normally a different person from the head of government.
        Called a prime minister, they are appointed from the majority party or from
        a coalition of parties when no one party has a majority. Heads of state
        have varying digress political responsibility
    d. England's Queen has only ceremonial responsibilities.
3. Democratic Republic vs. Parliamentary Democracy by President Wilson's

   His comparison would make many founding fathers unhappy as they feared
    budget instability and anarchy similar to that of the French Revolution.

History of Democracy
1. Overview from Wiki
2. Origins of Democracy and the Citizenship of Athens c. 440 BC – 430 BC
3. Magna carta at 800
4. Origin of Democracy video
5. Athens-The Truth About Democracy video
6. The War On Democracy Video
7. Republican Principles developed during Jefferson's presidency.
8. US Voting Rights Timeline

Republic vs. Democracy
1. In a republic the sovereign is the individual, it is government of the people.
    In a democracy, the sovereign is the group, the majority, it is government
    by the people.
2. Republic v Democracy and other governments
3. An Important Distinction: Democracy v Republic
4. Republic v Democracy
5. Why faster growth with a democratic presidents-timing is everything.
6. Building a Democratic Republic
7. Book Summaries Internet Library's reviews Meacham's biography of
Jefferson and other political economy writings.

 Democracy and Capitalism
1. Pyramid Theory looks at Capitalism as Practiced in the US Democracy.
2. Alexis de Tocqueville wrote about capitalism and democracy
    in 19thnd democracy America. Read Democracy in America
3. Trading Democracy for Corporate Rule Part 1
    video from Documentary Films

Is democracy, like communism, a failed doctrine? Videos
1. Terminal Democracy Documentary Film
2. After Democracy Documentary Film
3. Legalize Democracy Documentary Film

Tenth Amendment to the United States Constitution
is part of the Bill of Rights as ratified on December 15, 1791.
1. The Tenth Amendment states the Constitution's principle of
    federalism by providing that powers not granted to the
    federal government nor prohibited to the States by the
    Constitution are reserved to the states or the people.
2. This requires judicial interpretation.

The US constitution was seen as very important because republican government had not succeeded very often due to an inability to limit majority power. It was written at a time when the science of politics developed by John Lock and others would help develop a document that would promote stability and control majority factions. Controls included  Separation of powers/ authority among three branches of government, the legislature, the President, and the courts. Within the legislature power was again separated such that the Senate could stop a bill passed by the House of Representatives, the President could veto a passed Congressional bill, Congress could override said veto with a 2/3 vote, and the Supreme Court could stop the President and Congress by declaring a law unconstitutional. These checks and balances between the branches were to protect minority rights from factions.

Politically, the U.S. had a difficult beginning as the violence and anarchy surrounding the French Revolution made many Americans uneasy about their republican democracy. Historically, the Federalist and their active state liberalism ruled and then Jefferson and Jackson governed based on minimal state liberalism.  Then Lincoln used a strong federal government to preserve the Union and it lasted until the end of reconstruction when limited government helped by the Supreme Court fostered the Gilded Age. The Progressivism Teddy Roosevelt and Windrow Wilson ruled with active state liberalism until the First Red Scare and unionism following WW I brought back minimal state liberalism. The Great recession allowed FDR to use active state liberalism to tame the Great Recession and while active government was slowed by a Second Red Scare and the Korean War, the Kennedy assassination  in 1962's gave LBJ's the ability to use active state liberalism to pass The Great Society anti-poverty programs. A difficult 1970's because of Stagflation allowed Ronald Regan to blame big government and he returned to minimal state liberalism. Neither branch of state liberalism has controlled the 21st Century with society allowing a strong governmental response to 9/11 and then allow President Obama, a strong active state liberalism president, to pass Obamacare.

Federalist George Cabot of Massachusetts feared ..."the terrible evils of democracy," and felt Jefferson was unstoppable,..." From p368 of Thomas Jefferson: The Art of Power, 2012 a biography by Jon Meacham as summarized by Walter Antoniotti Democracy and a Republics are often interchangeably. Source


Does Current Political Economy Questions substantiate that democracy has not control government spending.


Editor's Note: Building a Democratic Republic is an interesting study of the 250 years of trial and tribulations required to build our government. It is from Part 2 of Turning Points in American History covers these topics.


Instigators Finely Hit a Nerve With a 1773 Boston Tea Party
A Hesitant Reluctant 1776 Nation Seeks Freedom

The French Save the Day
1786 Shays Tax Rebellion Leads to a Constitution

U.S. Undergoes an 1800 First Peaceful Democratic Government Transfer
Marshal's 1803 Power Grab Creates a Third Separate Power
Who Are the People of We the People?
Who Protects the Unalienable 1866 Rights of Whom?
The 1870s Takes Away Unalienable Rights 1930's_Government Safety Net Deficits, Like War Deficits, Prove Attractive

1973 Finally Brings Fast Track Civil Rights

Alexis de Tocqueville toured the U.S. and made some
salient observations about democracy.

Read Democracy in America and
On Majority Rule and Mediocrity
Listen on YouTube Listen on LibriVox

Universal male suffrage began in 1884 France and
was an important milestone  in the history of democracy. 


We seek individual liberty, social justice and economic efficiency with a Democratic Republic that uses a constitution to protects the minority, a Supreme Court to enforce the constitution and an ever expanding electorate deciding who does what, when and how. This continually changing electorate both legally and in practice has led to a somewhat dynamic Republic of the United States 

Editors Note: Voter rules are again a
hot 2015 political topic and equal rights
have apparently been granted to homosexuals.

      Political Systems are about control.
1. Commonwealth is a political community founded for the common good.
2. Oligarchy: power effectively rests with a small number of people.
    a. US is an oligarchy Northwestern study concludes
    b. German Oligarchs financed Hitler.
3. Polyarchy has decentralized rule where many smaller governments
    tailored to the needs and desires of the local populations.
4. Fascism a form of is a form of radical authoritarian nationalism is
    considered by some to be right-wing as it is social conservatism
    and uses authoritarian means to oppose egalitarianism.
5. Totalitarianism: the state holds total authority over society and seeks to
     control all aspects of public and private life.
6. Libertarianism  wants to limit power.
Liberalism, Constitutionalism and Democracy
7. Dictatorship rules by a few or one person. Germany had Hitler as dictator, he
    controlled a few advisors and a strongly nationalistic totalitarian state resulted.


Political Economy
2016 Presidential Election Issues 1p each
Current Political Economy Problems 7p
Brief U.S. Political History 
Political Eras and Their Important Events
Presidential Politics Political Eras and Their Elections 1788 - 2012  5p each
Capitalistic Democracy  Run Government at a Profit 1p
Recent Decades Ranked by Problems 2p
Great Recession 1p or 3 p
Severe Recessions 2p 

History of US Banking 1p
US Economic Normality 1945-2015       page 2
5 Decades of Problems  Under Construction and needs help. Interested? e-mail 1p
Return to Our Democratic Federalist Republic Student participation welcome contact
VII. Politics in the U.S. Democratic Republic    

     A. U.S  Voting Rights Timeline
       B. 20th Century U.S. Political Economy           
       C. Money in U.S. Politics Using 40 charts.
       D Presidential Politics is a 5-page concise
           summary of Presidential Elections.
       E. Presidential Courage depicts great
            presidents serving democracy.
       F. The End Game for Democracy Bill
           Moyer's 3 minute video on all aspects
           of public and private life.
       G. A Republic No More Video 1:03
explores of U.S. Democracy and
the concept of a Republic.
       H. Are representatives trustees
           representing the nation or are they
          delegates representing their constituency?
       I. Have you read the federalist papers of
          American-conservatism? has student articles
          with a conservative view.

VIII. Conclusion:

Four Horsemen 1:39 video is a collection of today's greatest sociological, political and economic voices that analyze and put into historical perspective the decisions and results of our economic and political systems.



Growing Into a Republic

For the first few years America showed few signs of becoming a Republic as individual liberty was subservient to religious authority and investor who had been granted ownership of colonial territories by the King of England. Liberalism grew from developments in English constitutional history and development of political philosophy. It grew as a reaction to political authority, economic development,  the existence of unlimited space. The

Presidential Election Issues

Economic Questions

Will Stagnate Median Income Hurt Our Children?
How Severe is the Great Recessions?
Is $17 Trillion Dollar Deficit Trouble?

Is the Country in Trouble?
Do People Vote Their Pocketbook?
Should Tea Party Share Its Tea?
Is Politics About The Money?

E-mail comments to

  Education Questions

How Would Experts Redesign US Education?
Should We Adjust 21st Century
Education Axioms?

Market System Capitalism and Political Economy Videos  
X. Quiz on Economic Systems
A. Provided with answers from steponicseconomics 
Exam Strategies +  has comprehensive testing advise.

Class Discussion Questions/project #1 6/15

 A. How is the concept of creative destruction
          currently affecting the United States economy?
      B. Explain how the concept of creative destruction
          has affected European politics: 
          a. in the recent past 
          b. in the near future
      C. Read the John Adams section of Presidential 
for the economic and political issues
          faced by President Adams at the turn of the 
          18th century. Are they similar to those faced by
           the U.S. early in the 21st Century. Cam these
           questions can be applied to most of America's
      D. President Obama been accused of being a
          Socialist? Begin with a nominal definition of
          relevant political and economic terms explored
          in this chapter and relate them to our current
          economy and politics. How accepted are
          political and economic concepts? What did
          suffrage have to do with this accusation. 
Presidential Politics: Party Politics and
          Presidential Elections from 1788 to 2012
20th Century U.S. Political Economy: An
nteraction of Politics and Economics.

E. Give examples of current political discussions
         designed to move the U.S. toward or from a
     F. Class Project can take a day, week, month, term,
        lifetime! Something happened during the last 30
        years to disconnected wage growth from
        productivity growth. 

   G. Course project/discussion # 2
        Using concepts explored in this chapter and this
        course Investigate
        1. Competition
        2. Energy cost
3. How are capitalism and democracy designed
      to return a normal growth in wages?
    4. Geekability 
     5. Other Stuff 

          Answers Class Discussion Questions

Editor's Note: To solve the problem of not enough income for the middle classes in the 1980's capitalism changed the name of Home Improvement Loans to Home Equity Loans.   People were encouraged to immediately spend what had been a retirement nest egg. There is nothing wrong with this as long as people realize that they may be delaying retirement.



Is This Divergence an Economic or Political Issue?


2015 Political Economy Controversies
cover poverty, middle class income and politics in 2015






More Project Data For many years, Americans have worked hard, produce more, and voted to give  more and more of the income gains to the rich.

Editors Note: A closer look would reveal that these same voters allowed governments to build up debt,  governments and businesses to have large unfunded pension liabilities, and individuals to spend unrealized home equity using home equity loans. deleveraging




alvin and Hobbes Explain Modern Capitalism 
from The Daily Beas
















Here is a visual version of the well-known cow based analogy of capitalism.

from  Infographic and Daily Global  Economic Intersection Newsletter WikiMoney Explains Capitalism Around The World - An Infographic from WikiMoney


US Produces Most Per Capita

Voters Hire Politicians That Overspend and
 Promise More in the Future at all levels of Government

Cheap Imports Allow Even More Consumption.

We Borrow on Home Equity for Current Consumption.

Yet Many Seem Dissatisfied?


Market System Capitalism and Political Economy Videos




 The French Save the Day Who are the New Nation's People