economic theory, GP

1. Modified Capitalism VS Neo-liberalism HyungWookHur Yr 11 General Paper

2. Traditional Capitalism is based on “The Wealth of Nations” written by Adam Smith(?~1790.7.17).(laissez-faire). In the theory, he stated that the “Invisible hand” makes the economy flow and distribute wealth. However, his theory was not adopted in reality. What is Capitalism

3. The great depression The great depression is the result of “Failure of laissez-faire”. [Government influence ▼]Economy ▼ -> Demand ▼ -> Business ▼ -> employment ▼ -> Economy ▼ -> Demand ▼ -> ……………… The great depression happened due to this dilemma.

4. Modified Capitalism John Maynard Keynes, [1883.6.5~1946.4.21] (The General Theory of Employment, Interest and Money) Economy ▼ -> Demand ▼ -> Business ▼ -> employment ▼ -> Economy ▼ -> Government force Demand ▲ -> Business ▲ -> employment ▲ -> Economy ▲ From the cradle to the grave : Offering basic quality of life

5. Neo-liberalism Chicago School Oil Shock /Stagflation -> Government Failure -> Doubt effect of government influence -> Minimize government influence Positive effect : Market borders reduced -> free economic exchange -> improve national economy Similar to traditional Capitalism

6. Why Not Neo-Liberalism ?(Economy) Developing Nations disadvantaged World-Wide Economic Crash (2009 American Bank crash) Poor gets poorer, rich gets richer

7. Why Not Neo-Liberalism ?(Social) Social security ↓/ Social unrest - increase of suicide or murder

8. Why Not Neo-Liberalism ?(Ethical) Another hierarchy system based on economic power (unethical) Ignoring poverty and leave poverty as personal responsibility while it is caused by hierarchy system