Discussion The main argument supporting authoritarianism help economic development is the state can enjoy autonomy in drawing development policy which face less resistance force from the public and more public interests oriented. When countries are developing its economy, huge investment is needed to start-up the economy and state will cut off the current consumption. The party insist for a “better future” will never win in the election. As a result, the country will never have enough resources accumulate for future economic development (Rao, 1984, p.75 as cited in Prezworski A. and Limongi L., 1993, p.54). In this sense, authoritarianism has its own advantage as it can draw and execute policy beneficial to economic development without facing the objection from citizens.
In order to maintain their net earnings, the business look for a number of alternatives, that includes cutting employment and making other similar decisions. Thus the results that policy makers expect form the fixation of minimum wages doesn’t turns out to be the same due to the behavioural responses of the employers. The supporters of minimum wage imposition believes that minimum wage imposition is the technique to boost the incomes of full time adults who belong to low income families in order to better off their situation. But in contrast to the assumptions, in reality the data indicates that mostly the part time workers are young workers and are generally not from the low income background. Hence the policy ends up resulting in creating
Adam Smith, the father of Economics published papers that had changed the way Economists think. In his paper, he mentioned the “invisible hand”. The “invisible hand” refers to individual’s interests which generates a demand for goods and services that allow others to supply those goods and services. He suggests that a market work best under free market, without government intervention. There will be better allocation of resources as demand and supply will automatically adjust to equilibrium based on individual’s interest and utility.
Minimum wage has gained an important place in the brain of politicians to reduce social gaps and inequality. Governments intervene on the market to allocate a better wage towards workers than the one offer by the market equilibrium. This controversial measure raises lots of debate on whether raising the minimum wage results in workers becoming jobless. Government intervention on minimum wage has one main goals: increase the demand by an increasing of wage. The main reason against minimum wage is that it creates unemployment among low skilled workers; on top of that it can be argued that the redistribution effect is not going to the target people of the measure.
Ever since the Great Depression, the minimum wage has been in effect — in order to reduce poverty and solidify that employees are paid a reasonable sum. Although the minimum wage can be beneficial and advantageous for individuals and to our economy as a whole, it can also be detrimental to our nation’s finances. The federal government should not allow this to pass, but rather they should increase the citizens’ knowledge of the pernicious consequences and complications that will arise with a higher minimum wage, especially one as high as $15 per hour. Some of the resulting conflicts that will occur if this possible raise in the federal minimum wage takes effect are: job loss, business failure, higher consumer prices, and a lower demand for uneducated employees. Although it may appear as if increasing the federal minimum wage will help to lift families out of poverty, in
Another article used is another part of Ayn Rand’s Philosophy but on the term “self-interest”. Having self-interest is part of being human and “the purpose of morality, she argues, is to teach us what is in our self-interest, what produces happiness”, this sentence also ties with the words “self” and “ego”. Having an ego or being an egoist has its limits, though. People should care for themselves, but also care for others because ego is more of a balance in which one can’t work without the other. The beneficial side of ego is that it “constitutes the essential identity of a human being” (Rand Introduction) but the detrimental side, according to visionlaunch.com, is that it can “completely eliminate objectivity”.
Gary S. Becker was one of the most influential scholars in the history of the economic thought. With his studies, the boundaries of economics expanded from crime to fertility. Some scholars interpret this expansion as the invasion of social sciences by economics and they give it the name of “economic imperialism”. However, the superiority of the economic methodology are questionable because they have several problems, namely over-simplification, lack of historicity, neglecting spatial and cultural differences, and ignoring the role of institutions. Therefore, human behavior can be explained better with not just economics but also with the help of other social science.
Joint problem-solving arrangements: Which included routines associated with adjustment and coordination that, despite economists predictions, were more efficient than market-based mechanisms of coordination. The notion that economic action is embedded in social structure has revived debates about the positive and negative effects of social relations on economic behavior. While most organization theorists hold that social structure plays a significant role in economic behavior, many economic theorists maintain that social relations minimally affect economic transacting or create inefficiencies by shielding the transaction from the market (Peterson and Rajan, 1994). In this regard, Granovetter's (1985) embeddedness argument has emerged as a potential theory for joining economic and sociological approaches to organization theory. As presently developed, however, Granovetter's argument lacks its own concrete account of how social relations affect economic exchange.
INTRODUCTION In this paper I tried to argue that how growth does not lead to proper reduction of poverty. There are other factors also which helps us to understand poverty broadly. Among the factors I have talked about inequality and its relation with poverty. First part of the paper tries to give an overview of how to measure poverty and define it. It also talks about importance of considering all factors in determining the poverty line.
His rational expectations theory was developed as a challenge to some of the ideas regarding aggregate demand from classic economist John Maynard Keynes. The theory of rational expectations says that because people are forward-looking and rational (as opposed to emotional), actual outcomes will turn out to be very close to the expectations of all the players in the economy. The theory of rational expectations can be directly applied to the labor market - specifically, what happens to unemployment. The rational expectations theory predicts that, because companies and workers rely not only on past information but also make predictions about the future, the labor market will generally be in equilibrium most of the time, so unemployment is at its natural rate. Rational expectations theory also leads to the conclusion that, although the government can help reduce the unemployment rate, their actions will only lead to higher prices.
In the first chapter of Jonas Pontusson’s book Inequality and Prosperity: Social Europe vs Liberal America, he raises an important question regarding if we are caught in a situation in which governments can no longer do much to improve the economic prospect of low-income workers and their families. Although the answer to his question varies in different countries, it is clear that the U.S. government CAN improve the lives of low-income citizens, but it often neglects to do so. The United States is a capitalist driven country. However, its quest for economic prosperity has come at the expense of those unable to reach the standard income. As much as Ronald Reagan have proclaimed the U.S. as the poster-boy of democracy and economic prosperity, the reality today is that many people are still deprived from the “American dream.” Despite occasional turmoil, there is no denying that the U.S. government has done an amazing job maintaining its economy.
“Some policymakers may believe that companies simply absorb the costs of minimum wage increases through reduced profits, but that 's rarely the case. Instead, businesses rationally respond to such mandates by cutting employment and making other decisions to maintain their net earnings. These behavioral responses usually offset the positive labor market results that policymakers are hoping for.” There is a large misconception that low wage jobs are meant to be permanent jobs when in fact these jobs are meant to be temporary. Low wage jobs should be seen as “first jobs”