3-1 Chapter 3 Discussion: The Business System Paul L. Schumann, Ph.D. © 2004 by Paul L. Schumann. All rights reserved.

3-2 Ideologies  What is meant by ideology?  How does a person’s ideology affect his or her behavior? Examples?  What is an individualistic ideology?  What is a communitarian ideology?

3-3 Socioeconomic Systems  What is a command system?  In what ways are businesses examples of command systems?  What is a market system?  What are the 2 key components of a market system?

3-4 John Locke: Free Markets & Rights  According to Locke, what are the 2 natural rights?  What’s Locke’s argument for the existence of the 2 natural rights?  Why did humans invent the institution called government? What is the proper role of government?What is the proper role of government? What should government not do?What should government not do?  How can Locke’s ideas be used to argue in favor of a free market system?

3-5 John Locke: Free Markets & Rights  How have Locke’s ideas influenced the United States?  What are the 4 major criticisms of Locke’s defense of free markets?  Considering the advocates and critics of Locke, under what circumstances is government regulation of business justified?

3-6 Adam Smith: Utility of Free Markets  What is the utilitarian argument from Smith in favor of the free market system?  What is the proper role of government?  Can government allocate resources as efficiently as the free market? Why?  What are the 4 major criticisms (except for the Keynesian criticism) of Smith’s defense of free markets?

3-7 Adam Smith: Utility of Free Markets  What is the Keynesian criticism of Smith’s defense of free markets?  According to the Keynesian criticism, what is the proper role of government? Why?  What did Herbert Spencer and other Social Darwinists argue?  What are the criticisms of Social Darwinism?  Considering the advocates and critics of Smith, under what circumstances is government regulation of business justified?

3-8 Marxist Criticisms  What did Karl Marx witness that influenced his thinking about free market capitalism?  According to Marx, what are the 2 sources of income in a capitalist system?  Why do workers have to sell their labor in order to earn a wage?  What is the source of the business owner’s profits? How does Marx see this as exploitation of the workers?How does Marx see this as exploitation of the workers?

3-9 Marxist Criticisms  How does Marx believe that humans should live?  According to Marx, what are the 4 forms of alienation that are produced by capitalism?  According to Marx, what is the basis of the inequities produced by capitalism?

3-10 Marxist Criticisms  In Marx’s theory, what is meant by the economic substructure?  What is meant by the forces of production?  What is meant by the relations of production? What are the 2 main types of relations of production?What are the 2 main types of relations of production? –How did this work in feudal societies? –How does this work in capitalist societies? –How do the relations of production create social classes?  In Marx’s theory, what is meant by the social superstructure?

3-11 Marxist Criticisms  According to Marx, what is the actual function of government?  According to Marx, what are the 2 basic features of capitalism  How do these features harm the working class (the proletariat)?  How do the defenders of free market capitalism respond to the Marxist criticisms?

3-12 The Mixed Economy  What is meant by a mixed economy?  Considering Locke, Smith, the critics of Locke and Smith, Marx, and the critics of Marx, what is the proper role of government in a capitalist system?  Under what conditions is government regulation of business justified?

3-13 Property & New Technologies  What is meant by intellectual property?  What are some examples of intellectual property?  How is intellectual property different from physical property?  What are the arguments in favor of treating intellectual property the same as any private property?  What are the arguments in favor of the collective (or common) ownership of intellectual property?

3-14 Property & New Technologies  What is the property system for intellectual property in the United States?  What is a copyright?  What is a patent?

3-15 Case: Napsters’ Revolution  How would the modern-day, hardcore advocate of the ideas of John Locke analyze peer-to-peer systems (such as Napster, Gnutella, and Kazaa)?  How would the modern-day, hardcore advocate of the ideas of Adam Smith analyze peer-to-peer systems?  How would the modern-day, hardcore advocate of the ideas of Karl Marx analyze peer-to-peer systems?