IT’S A ROLLERCOASTER RIDE SUPPORT CLASSIC LIBERALISM… OPPOSE CAPITALISM. SUPPORT SOCIALISM… OPPOSE COMMUNISM. SUPPORT MODIFIED LIBERALISM … NOW WE DON’T LIKE THAT ONE?! The Evolution of Modern Liberalism

Evolution of the idea of freedoms  Classical liberalism – negative freedoms “Freedom from…” (oppression, control, e.g. freedom of conscience) Industrial Rev – growth of capitalism, equality of opportunity can create inequality  Modern liberalism – positive freedoms “Freedom to…” (you cannot be free if your basic needs aren’t met –e.g. freedom to access education, health care) Great Depression, World Wars, urbanization, globalization = progressives: gov intervention to ensure equality of outcome

Post World War Two Liberal philosophy drifted further left  acceptance of programs part of the welfare state supported by liberals.  e.g. universal health care & CPP

Journal Entry Discuss the bias in the video clip by providing examples. Do you agree or disagree with the producer? Explain your reasoning

Can you see any bias?

Journal Entry Discuss the bias in the video clip by providing examples. Do you agree or disagree with the producer? Explain your reasoning

Stop and reflect-journal entry After we have gone through the discussion, record the following How does supply side economics differ from demand side economics? Which theory do you support more? Why?

Neo-conservative reaction Like modern liberals, there are many ways to define a neo-con.  Most common characteristic:  Reaction to liberal principles that had “gone too far” Civil rights movement leads to affirmative action Weakness of using diplomacy in dealing with enemies (détente efforts in Cold War) Increasing debts and abuse of tax dollars by liberal programs like health care Failure of public education Lack of morality in society by focusing on individual rights, or allowing faith based tribunals like Sharia law

USA in the 1970s Growing government debt High levels of taxation Increased costs to business due to higher wages, benefits and working conditions (unions), and government regulations (like minimum wage and environmental laws) Increased cost of living (especially after 1973 OPEC embargo) = inflation (due to government spending and high cost of managing debt) and unemployment (due to economy that provided few incentives for investment)

A trillion dollars (see the little guy beside it?!) – these are $100, not $1 bills.

Supply Side Economics

Chicago School – Friedrich von Hayek Believed that government intervention in the economy was first step towards totalitarianism Pure free-market principles were the best way to encourage economic growth Opposed demand-side economics  Demand side felt the government would give money to the people to spur the economy  Supply side felt that the government should let people keep their money to invest in the economy

Milton Freidman economic systems have “leakages” that cause the extremes in the business cycle by limiting demand “leakages” - individual income saved in banks, income lost to taxes, monies spent on imported goods These can be balanced with “injections” “injections” - businesses borrowing for investment, government spending, exports Keynes (demand-side) wanted gov. to increase injections (fiscal policy) – Friedman felt government should prevent the leakages (monetary policy) felt changes in the business cycle were due to inept politicians mismanaging the stock of money government should be limited to protecting property rights, printing money, and maintaining law and order

Friedman

Friedman, part two

“Trickle-down Economics” “Reaganomics” “Thatcherism” (Klein in Alberta) Stagflation (USA) – while fiscal and monetary policy worked in the 1960s, it was not working in the 1970s Ronald Reagan elected on platform of decreasing government involvement in economy to reduce national debt  cut government regulations, social program spending and income taxes (corporate and personal) to encourage production (although he did not cut military spending).  Initially this system worked, but in the end it left the economy with a greater debt (military spending)

Reagan on Reaganomics 2yU&feature=related 2yU&feature=related

Stop and reflect-journal entry How does supply side economics differ from demand side economics? Which theory do you support more? Why?

An argument against it - Buffet