1. Exploring Economic Equality
Chapter 12
Exploring Economic Equality

2. To what extent should we embrace an ideology?
Key Issue
To what extent should we embrace an ideology?

3. To what extent are the values of liberalism justified?
Related Issue
To what extent are the values of liberalism justified?

4. To what extent should governments encourage economic equality?
Chapter Issue
To what extent should governments encourage economic equality?

5. What does economic equality mean?
Question for Inquiry #1
What does economic equality mean?

6. In what ways can governments promote economic equality?
Question for Inquiry #2
In what ways can governments promote economic equality?

7. Key Skill
Consider the points of view and perspectives of others when defending a position on an issue.

8. Key Terms and Concepts Command Economy Economic Equality
Free Market Economy
Mixed Economy
Social Safety Net

9. Chapter Introduction (Pg 309)
In Calgary from
Rent average $1089
Average House price was $
Minimum Wage is $8.00 (at this time)
$ / year
Can someone making minimum wage afford to live?

10. Chapter Introduction (Pg 309)
What should determine the wage of a person?

11. Chapter Introduction (Pg 309)
What should a society value more?
Economic freedom and to take the risk of success and failure
Economic Equality – Sharing successes and failure as a society

12. Chapter Introduction (Pg 309)
The chapter issue: To what extent should governments encourage economic equality, is related to two other chapter we have learned
Chapter 2 – Individualism
Chapter 3 – Collectivism

13. Defining Economic Equality (Pg 310)
Competition is a key value in liberalism
Competition will set the prices for goods and services, determine who will get paid what and who will succeed and who will fail.

14. Defining Economic Equality (Pg 310)
However, people who fail under a system of liberalism can find themselves without money to provide for their basic needs.

15. Defining Economic Equality (Pg 310)
Economic inequality can occur from the following reasons
Competition
Individualism
Free markets

16. Understanding of Economic Equality (Pg 310)
Economic Equality can mean many different things
Egalitarianism
Equal opportunity
Equitable distribution of wealth

17. Understanding of Economic Equality (Pg 310)
Egalitarianism
People should own the means of production collectively
There should be a guaranteed annual income to meet the basic needs of people

18. Understanding of Economic Equality (Pg 311)
Equality of Opportunity
There should be a minimum wage
There should be no discrimination in hiring workers

19. Understanding of Economic Equality (Pg 311)
Equitable distribution of wealth
All people should earn equal wages for work of similar value
People with higher incomes should pay higher rates of taxes

20. Understanding of Economic Equality (Pg 311)
The values you hold on collectivism or individualism will likely influence greatly your ideas on economic equality

21. Understanding of Economic Equality (Pg 311)
The three approaches in dealing with economic inequality
Egalitarianism
Equal opportunity
Equitable distribution of wealth
Can be placed on an economic spectrum

22. Economic Spectrum Dealing with Economic Inequality
Values of Collectivism
Values of individualism
Low degree of government intervention in the economy
High Degree of government intervention in the economy
Equitable division of wealth

23. Understanding of Economic Equality (Pg 311)
Turn to page 312 and 313 of the text.
I will read quotes from the text, you will decide where on the economic spectrum you would put them.

24. Understanding of Economic Equality (Pg 311)
Are there any positions I just mentioned that you have not though about before.

25. Understanding of Economic Equality (Pg 311)
Do you think that people are more responsible for their own well being or do you think the government is. Take a couple of minutes to think where you would put yourself on the economic continuum.

26. Understanding of Economic Equality (Pg 314)
Parties on the political right tend to favour
Small government
Less government involvement
Competition
Trickle down theory
More money will be created at the top by competition and will find its way to the common people

27. Summary of Defining Economic Theory (Pg 310)
People have different understandings of economic equality
Egalitarianism
Equal opportunity
Equitable distribution of wealth
People from individualistic beliefs will define economic equality differently than people with collective beliefs.

28. What does economic equality mean?
Question for Inquiry #1
What does economic equality mean?

29. In what ways can governments promote economic equality?
Question for Inquiry #2
In what ways can governments promote economic equality?

30. Promoting Economic Equality (Pg 315)
Is there economic equality in Canada?
When compared to 17 other industrialized nations Canada ranks 10th and is given a grade of C (See 315 for graph and details)

31. Promoting Economic Equality (Pg 315)
Do you believe it is the governments responsibility to address economic equality?

32. Promoting Economic Equality (Pg 316)

33. Promoting Economic Equality (Pg 316)
Sometimes political and economic goals are closely aligned
Which quadrant would liberalism fit into ?

34. Promoting Economic Equality (Pg 316)
What are some descriptive words you can say about liberalism?
Do the words peace and freedom belong with liberalism?

35. Economies and Liberalism (Pg 317)
Liberalism and individualism value these concepts when it comes to an economic system
Self interest
Competition
Economic freedom
Private property

36. Economies and Liberalism (Pg 317)
Any economic system exists to answer one question:
How do we deal with scarcity?

37. Economies and Liberalism (Pg 317)
Scarcity looks at:
What will be produced?
How will goods and services be produced?
Who will make these decisions?

38. Economies and Liberalism (Pg 317)
The way the government answers the previous three questions will determine what type of economic system will be in place.

39. Economies and Liberalism (Pg 317)

40. Command Economy (Pg 318)
Recall that communism was a response to the problems of Classical liberalism created by the industrial revolution.

41. Command Economy (Pg 318) Communism is a command economy.
A command economy is one in which the government has a high control over the economy.
Examples include The Soviet Union and Cuba

42. Command Economy (Pg 318)
A command economy is also called a centrally planned economy or a public enterprise economy.
How do you think they will answer the three questions; what will be produce, who will produce it and who will decide this?

43. Command Economy (Pg 318) What will be produced
The government will conduct studies to see what the needs of society are
Individual consumer wants are not a priority

44. Command Economy (Pg 318) How will goods and service be produced?
The government owns most factories and services
The government sets quotas as to how much to make and service
People are often pushed into vocations they appear to have skill in

45. Command Economy (Pg 318)
To whom will goods and service be distributed to?
The government will distribute based on need. This will create economic equality
Distribution may also be decided based on other governmental goals (military, industrial, etc)

46. Command Economy (Pg 318) Who will make these decisions?
The central planners in the government, often the leaders of the government

47. Egalitarianism and Cuba (Pg 319)
Read pages 319 and 320 regarding Cuba and Egalitarianism?
Be prepared to answer some questions

48. Egalitarianism and Cuba (Pg 319)
How did Cuba define economic equality?

49. Egalitarianism and Cuba (Pg 319)
How did Cuba define egalitarianism?

50. Egalitarianism and Cuba (Pg 319)
What has been changing in Cuba in regards to economic equality?

51. Free Market Economy (Pg 320)
There are no true free market economies
The best examples are Britain during Industrial Revolution and The US before the Great Depression
It is also called capitalism, Laissez-faire economy, and private enterprise

52. Free Market Economy (Pg 320)
What will be produced?
Supply and demand will decide what is produced due to scarcity
People demand items and producers try to fill the demand.

53. Free Market Economy (Pg 320)
How will goods and services be produced?
Companies decide how to use scarce resources to fulfill customer demand to make the most profit

54. Free Market Economy (Pg 320)
To whom will goods and services be distributed?
Whoever can afford to buy the goods and services can purchase them

55. Free Market Economy (Pg 320)
Who will make these decisions?
The marketplace will make these decisions. The government allows people to determine their demand and producers to determine supply

56. Free Market Economy (Pg 320)
What are some of the perceived advantages to the free market economy?

57. Free Market Economy (Pg 320)
Competition between companies result in low prices, higher quality, and wider selection
Efficiency is encouraged to keep prices low
Technology and innovation are encouraged

58. Free Market Economy (Pg 320)
Workers and owners are motivated to earn money and make profits
The economy can respond quickly to change
When workers are in short supply wages increase

59. Free Market Economy (Pg 320)
What are some perceived disadvantages to the free market economy?

60. Free Market Economy (Pg 320)
There may be a large income gap
Economic cycles – Good time and bad times
Periods of high unemployment
Advertising can manipulate the consumer
Producers can form monopolies
Hidden costs such as pollution or resource depletion
Resources wasted on goods people want but do not need.

61. Equality of Opportunity (Pg 322)
Some people believe that equality is simply the removal of barriers that stand in the way for people to achieve economic success.

62. Equality of Opportunity (Pg 322)
In Canada people are not allowed to be discriminated against for employment based on
Race
National or ethnic origin
Colour
Religion
Age
Sex
Sexual orientation
Marital status
Family status
Criminal record if pardoned

63. Equality of Opportunity (Pg 322)
This typed of economic equality is usually found in liberal democracies such as Canada, Britain and The US

64. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322)
The Quiet Revolution is a period of about 10 years in Quebec that began with the election of the Lesage provincial government
A large part of the quiet revolution was the take over of the education in Quebec by the government from the Catholic Church

65. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322)
The purpose of this educational take over was to allow a better education system for Francophones to allow them to compete better with Anglophones in Quebec.

66. Equality of Opportunity and the Quiet Revolution in Canada (Pg 322)
The modernization of the education system removed some barriers to success for the Francophone who had been discriminated in the province due to perceived poorer education

67. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
In the United States there was a major problem with people being discriminated on based on race.
The government passed the Civil Rights Act of 1964 to deal with this problem

68. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
The laws give certain advantages to groups that are disadvantaged in order to bring them to a level equal to those who are not disadvantaged.

69. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
These laws are very controversial and many states still try to fight them based on the fact the believe that they violate the constitution

70. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
Read Page 324 on Affirmative Action in Michigan

71. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
What are the two viewpoints that are expressed in this article?

72. Equality of Opportunity and Affirmative Action in the United States (Pg 323)
What was the outcome of the referendum in Michigan on Affirmative Action?

73. Mixed Economy (Pg 325)
A mixed economy is one in which there is some form of government intervention in the economy.
Government intervention occurred in large part due to the devastating effects of the Great Depression.

74. Mixed Economy (Pg 325)
Canada and Sweden are good examples of Mixed economies
How do you think a Mixed economy would answer the questions of scarcity?

75. Mixed Economy (Pg 325) What will be produced?
Supply and demand has a large say, however if there is a need the government may step in and fill it

76. Mixed Economy (Pg 325) How will goods and services be produced?
Producers still have a very large say, however government will step in to make regulations that may affect public safety, consumer rights, or other concerns.

77. Mixed Economy (Pg 325) To whom will goods and services be distributed?
Those who can pay can have the product or service, however, those who cant afford basic needs can get government help to fulfill this need.

78. Mixed Economy (Pg 325) Who will make these decisions
Again, supply and demand are large contributors but the government will step in to protect the greater good when the feel it is needed.

79. Equitable Distribution of Incomes and Wealth (Pg 326)
Many people do not believe in the extreme versions of equality as Cuba once advocated.
Some are just looking for a more fair system than is currently in place.

80. Equitable Distribution of Incomes and Wealth (Pg 326)
During the great depression the unemployment rate was as high as 25%
Those that had a job saw their wages fall 43% between 1929 and 1933

81. Equitable Distribution of Incomes and Wealth (Pg 326)
Look at the two graphs at the bottom of page 326.
Who has a more equitable distribution of wealth, Country A or Country B?

82. Equitable Distribution of Incomes and Wealth (Pg 326)
In good economies there are lots of jobs, this encourages people to spend money which in turn creates more jobs.
This can overheat the economy (Ex. Alberta )

83. Equitable Distribution of Incomes and Wealth (Pg 326)
The reverse is also true, in bad economies people get scared and spend less. This can cause a recessions to move into a depression. This makes times even worse (Ex. Great Depression)

84. Equitable Distribution of Incomes and Wealth (Pg 326)
The two previous slides create boom and bust economies which are not ideal.
Why do you think this situation is not ideal?

85. Equitable Distribution of Incomes and Wealth (Pg 326)
Economic theory suggests that the government is in a position to be able to make the boom and bust cycle less severe.
They can do this by intervening in the economy.

86. Equitable Distribution of Incomes and Wealth (Pg 326)
What they can do is encourage spending during a recession and encourage saving during a good economy. This will lower the boom and minimize the bust

87. Economic Stability and Government Intervention (Pg 327)
Some people believe that major industries that are vital to a nation’s economy should be in the hands of the government in order to ensure the health of the economy for all.

88. Equitable Distribution of Incomes and Wealth (Pg 326)
In 2007 the US spent 700 Billion dollars bailing out financial institutions on bad mortgages.
Some people agreed with this move while others did not.

89. Sweden’s Approach to Economic Equality (Pg 328)
Read page on Sweden and their economic approach.
While you read please take note of words or phrases you do not understand so that we can discuss them as a group.

90. Sweden’s Approach to Economic Equality (Pg 328)
What are some of the ideas that Sweden uses in their economy?
What are the benefits of these programs?

91. Sweden’s Approach to Economic Equality (Pg 328)
Progressive Taxation
As discussed earlier a person’s tax rate increases as their income increases.
Flat Tax System
The tax rate is the same for all regardless of income.

92. Canada’s Approach to Economic Equality (Pg 330)
From the 1920’s to the 1960’s Canada introduced many social programs
Old Age Pension
Social assistance
Hospital insurance
Healthcare

93. Canada’s Approach to Economic Equality (Pg 330)
Take a look at the pie chart on the bottom of page 331
What are the major expenditures of the governments of Canada in 2006.

94. Summary of Promoting Economic Equality (Pg 332)
Countries have to determine how to deal with the problem of scarcity
They do this by answering a number of economic questions about what and how will be produced and who decides these questions.

95. Summary of Promoting Economic Equality (Pg 332)
Command economies will fulfill state goals before they consider individual wants
Free Market economies tend to value ideas of classical liberalism – Private property, self interest, competition.

96. Summary of Promoting Economic Equality (Pg 332)
Mixed economies intervene in the economy to correct some of the problems of inequity and boom and bust economies.
The economic crisis of created a major example of government intervention in to the economy.