As a teacher, my goal is to be as unbiased as I can with regard to the subject matter. That’s often a bit tricky when it comes to economics or any of the social sciences for that matter.
The problem is that I want to present economics from the mainstream of economics as a discipline. I want to take a centrist approach because that’s where most economists are and that’s the textbook approach to economics. If you go on to study economics as a discipline, it’s this approach that you are most likely to experience. I do not want to spend too much time on the margins by offering a left-wing or right-wing economic analysis.1
That’s not to say I don’t want to acknowledge alternative perspectives at all. All sides have something to say. And I certainly want people to understand what socialism is because it’s talked about all the time and often misrepresented. The bulk of what I need to teach in an economics class, however, should come from the center of the discipline. I also want it to be applicable to the students’ real lives–and we live in a capitalist economy.
That poses a problem. You see, the economic center does not necessarily align with the political center. Teaching from the economic center is likely to present as a big D Democratic bias. That is to say, it may seem that I’m presenting the material according to the agenda of the Democratic Party. This, however, says more about the state of our politics than it does my bias in teaching economics.
Let me explain.
To help, I created this nifty-difty little graphic that represents the spectrum of economic thought as it aligns with the spectrum of political thought. I include a description of each element of the spectrum, the major theorist associated with that economic position, and the political philosophies that align with the economic spectrum. I also include some contemporary voices for each political philosophy in case you want to explore further.
Fortunately, the political and economic spectrum aligns fairly well. Where it’s a little messier I used gradient colors over solid colors. It’s important to understand that this stuff is a spectrum and there is some overlap. It’s not always clear where conservatism ends and liberalism begins. Most of us hold overlapping views on these issues.
So, let’s do a rundown from the top. The current economic spectrum can be divided up into Left, Center, and Right. That being said, when it comes to economics, there really are only two approaches today. The Center and the Right end of the spectrum are pro-capitalist. This means that the center and right agree that the best way to organize the most effective distribution of resources is if the factors of production2 are owned by individuals. The idea is that if individuals own the factors of production then they will use those factors in such a way as to maximize their own self-interests and everyone will benefit from the efficiencies and innovations they bring to the market to meet these interests.
To the left of the spectrum is folks who reject the notion of capitalism as the most effective way to distribute resources. The left believes that capitalism leads inevitably to exploitation and the dominance of those who hold capital over those who own nothing but their own labor. This is what Karl Marx referred to as Dialectical Materialism. Socialists believe that the best way to address the economic needs of everyone without one large group being exploited and another smaller group reaping almost all of the rewards is if the factors of production are communally owned and decisions about how to develop these factors are made democratically. This is important to understand because most people don’t realize that socialism is a democratic movement. Socialists simply believe that you cannot have a democratic society if the market is autocratic…as is the case with capitalism.3
The Center and the Right-wing of the spectrum both believe in the validity of capitalism as the best way to organize a market. From an economic point of view, that means the Center and the Right are both “Liberal”. I know that’s confusing, but for economists, liberalism means individual ownership of the factors of production, or capitalism. To “liberalize” a market means to shift from collective or command economies to one in which individuals have private rights to the factors of production. This is called privatization. This is not to be confused with what in the United States has become a distinction between liberalism and conservatism–a distinction covered in this post. What distinguishes the Center from the Right is what could be called an emphasis on the purity of capitalist markets and the role of government with regard to capitalism.
What does this mean “Purity of capitalist markets”? That’s a great question. The great debate within capitalist economics is, to what extent should the government, or the state, be involved with market decisions. Liberalism as a philosophy suggests that the power of the state should be limited. But what are those limits? We usually understand the limits of government in terms of individual rights. The state should not, for instance, have the power to limit one’s ability to speak their mind or to express themself, or to participate in religious practice.
Um…well…to an extent. We mostly accept that the government can interfere in speech or religious practice when that speech or practice might be harmful to others. So, I’m not allowed to perform human sacrifices even if that is a sincerely held religious belief. I’m not allowed to incite a riot or to slander someone, or yell “fire!” in a crowded room when there is no fire. We accept certain limits, imposed and enforced by the government, but there is a debate as to where those limits should be placed. So, should a person be able to advocate overthrowing the government, or make racist statements, or say things that are unpatriotic, or protest a war? This debate plays out acutely in school. What should I teach to a diverse student body? What books should I have you read? What if my curriculum or the books and articles I ask you to read conflict with what your parents feel you should be learning?
Anyway, what does this have to do with economics? According to theories of capitalism, mostly elaborated by Adam Smith in his book The Wealth of Nations, government interference in the market should be limited. People have a right to property (John Locke), and they should have the right to dispose of that property in whatever way they see fit to maximize their gain. That’s the driving force behind capitalism. Ultimately, if you are using your property to maximize your interests and I’m using my property to maximize my interest and our interests are competing, then I will have to find innovative ways to outdo you. You will do the same. The result will be the best quality product within reason that can be sold at the lowest reasonable price. Everyone wins. Consumers win by getting a quality product at a low price. Workers win because we are going to hire people to do the labor for us…because I can’t beat you and you can’t beat me if we are just working out of our own garages. We need employees. And we win by making a profit. Bam!
On the right end of the economic spectrum, we have folks who believe that little to no government involvement is necessary for such a system. The winners will win. The losers will lose. If you don’t want to be a loser, then work harder to win. Government interference only benefits the losers at the expense of the winners, and that makes everyone worse off. If I have a less effective business strategy than you, then I lose my investment, my product goes away and the market is better off without my lousy idea. This will make room for someone else to come along and compete with you. It is as it should be. From a right-wing perspective, or what can be called a classical liberal perspective, the only role of government in the market should be to protect property rights. Beyond that, there is no role. In the United States, this perspective can be called Economic Libertarianism and largely aligns with political conservatism.4
The Right perspective on this is bolstered by two important economic theorists, Friedrich Hayek and Ludwig von Mises. Each has institutes dedicated to their theories, here and here for those who are interested in this perspective. They advanced theories that suggest that economic liberty is, in essence, the most important liberty we have. Consequently, any interference on the part of the government equates to tyranny. This tyranny will ultimately translate into political tyranny like those advanced by Lenin, Stalin, and Mao. In the United States, Hayek’s and Mises’s theories were advanced by the novelist Ayn Rand and her philosophy of Objectivism.
The Center, which can be considered mainstream liberalism, has a somewhat different take on this. Capitalism is great, but it does lend itself to certain excesses. Even cheerleaders of capitalism, like Adam Smith and David Ricardo, acknowledge as much. First, as Adam Smith points out, the winners in a capitalist system can often create monopolies. When that happens, there’s no competition and no incentive to innovate. Monopolists can use their market power to distort the market by raising their prices and reducing quality and driving innovators out of the market. Furthermore, the wealthy may sometimes horde their wealth, in which case less and less of that wealth is available to others to advance themselves. This increases poverty which will only reduce the demand for goods and services as fewer and fewer people can afford what the economy produces. Smith referred to this as the “Vile Maxim of the Masters of Mankind”.
Ricardo also pointed out that in a capitalist economy, there are natural limits to the wages that can be demanded by workers. That natural limit is subsistence, or only enough to get by with. If workers make less than can sustain them, they will choose not to work or may be unable to work because they can’t physically sustain themselves. This will cause wages to rise because capitalists can only make profits from worker labor. As wages rise, more workers will be incentivized to enter the market. When too many workers enter the market, wages will fall again. Ricardo called this the Iron Law of Wages. The problem is that workers toiling for nothing more than subsistence are not reliable consumers…and not reliable citizens as they may become discontented by their station and inclined to pitchfork politics.
These problems suggest that the government will have to do something to mitigate these problems in order to sustain capitalism. For instance, the government may need to discourage or break up monopolies when they see them developing. With regard to Ricardo’s Iron Law, the government can either create a minimum wage (which Ricardo was against), provide certain social safety nets, or invest in police to keep the Discontented in place. Regardless, these are government interventions resulting from the negative externalities of capitalism.
Also, there are certain state interventions in the market that capitalists like. Infrastructure, for instance. If businesses had to build their own infrastructure necessary for doing business, this would be a profound cost that most private individuals would be uninclined to take on. The state must take on this cost of roads, ports, electricity, etc if business is to thrive.
The government does other things that businesses like. For instance, the state protects patent rights, corporate limited liability, provides regulation that increases the confidence in their products (FDA, SEC, FCC, etc. How much money would you spend on, say medicine if you couldn’t be sure that the medicine would do what it advertises). The government offers things like police protection, making markets safer and more secure. The state also helps to police other capitalists to ensure that the entrepreneurs can make investments that are likely to pay off. The state helps to organize the market to make conducting business more efficient. It also helps to expand markets by negotiating trade agreements with other nations. There’s a whole host of things that the state does that capitalists need to have in place if they are going to be successful. The government is also a large consumer of private goods and services.
Some capitalists simply don’t want to pay for these services through taxes. They would rather pass these costs off to others.
Furthermore, critics of the Hayek/Mises/Rand position point out that there really doesn’t seem to be a correlation between economic freedom and political freedom. Chile under the brutal dictatorship of August Pinochet is a great example. China instituted “liberal reforms” (meaning embracing some elements of capitalism or “market based” reforms) in the 1970s and 80’s under Chairman Deng Xiaoping. Russia embraced similar, even more dramatic market-based reforms in the 1990s. Yet these nations cannot be described as free.
Most importantly, capitalism has this bad habit of collapsing every now and again. When this happens, the consequence is unquantifiable suffering for whole populations. The iconic example of this collapse was the Great Depression. Overproduction of goods, environmental exploitation, and financial overreach all came together in the late 1920s and resulted in the collapse of capitalism on a global scale. Millions lost work. Businesses shuttered. Those who held capital had nothing to invest in. What’s worse, there didn’t seem to have an end in sight. Government leaders had no idea how to respond. There had been smaller collapses in the past and they all seemed to straighten themselves out given enough time, but this depression was different.
Eventually, governments responded by making massive investments in the economy. Some, like Germany, Italy, and Spain turned to Fascism and invested in their militaries…militaries they used to conquer other nations and steal their resources. Japan responded by pursuing a policy of military conquest in Manchuria, Korea, and S.E. Asia. The United States and western democracies responded with massive public works projects that provided employment but resulted in growing deficits in their national budgets.
These strategies seemed to work, more or less. At the very least, citizens were able to get resources and jobs that kept their heads above water. The Economist John Maynard Keynes started to compile observations and put together The General Theory of Employment, Interest, and Money, otherwise referred to as the General Theory. The General Theory was a radical departure from the economics of classical liberalism. Keynes posited that the most important thing in any economy is demand, or the desire to pay for goods and services. Where there is demand, investment will follow. No demand, no investment, no hiring, no production. That leads to decreased demand which fuels recession, or falling productivity.
According to Keynes, the source of this demand is irrelevant. If you want the economy to grow, money has to be spent. It doesn’t matter where this money comes from or what it is spent on. It only matters that money is spent. If private citizens within the market aren’t willing or able to spend, then the only entity able to spend at the necessary levels is the state. The government has to pick up the slack. Furthermore, the government can’t increase spending by raising taxes and spending that revenue, because that either decreases the ability of others to spend or the willingness of capitalists to invest. No. During times of recession or depression, the government must borrow money and spend it on stuff. It doesn’t really matter what that stuff is, but it would be best to spend that borrowed money on stuff that will pay off in the end, infrastructure, education, technology. It’s during times of prosperity, Keynes advises, that the state should balance its books and work on paying off its debts.
The proof in the pudding was World War II. Critics of the New Deal and Keynesian economics often point out that public investments didn’t end the Depression, World War II ended the Depression. Well, according to Keynes’s General Theory there is absolutely no difference between spending on war and spending on public works. Spending is spending. In the case of World War II, participating nations were willing to take on virtually limitless debt in order to win the war. This was economic stimulus. People were employed directly by the government to fight the war, others were employed through companies that had government contracts. Massive amounts of production were stimulated by government spending. World War II was the ultimate example of Keynesian economics. The General Theory was validated and became a powerful tool for deciding upon economic policy.
The center of the economic spectrum is defined by Keynesian economics. Yes, capitalism is great, but some government interventions are necessary to make it work for everyone. Governments should invest in certain social safety nets, enforce minimum wages, invest in public goods, and serve to regulate some of capitalism’s excesses. Keynesian economics drove the postwar economy and proved to be immensely successful.
Then the 1970s happened!
The economy of the 1970s posed some problems that Keynesian theorists of the time could not resolve. The United States experienced a phenomenon called Stagflation. See, in normal times, as the economy grows more people are working, more goods and services are being produced and more money enters the market through demand and investment. This tends to cause inflation to rise. Inflation, in turn, reduces the desire to invest because the value of what I may gain from investing is lost to lower buying power resulting from inflation. So high inflation becomes a problem. If investment dries up, then production slows and the economy can end up in a recession. On the other hand, when the economy is slow, unemployment is high, demand is low and the economy slows. This also leads to recession.
As you can see, balancing unemployment and inflation is pretty important. The central bank, in the United States that’s the Federal Reserve, regulates this by changing interest rates and reserve requirements. I don’t want to get into the weeds on this. Suffice it to say that raising interest rates and reserve requirements discourages investment and therefore tends to slow the economy. This strategy is used to deal with inflation. Lowering interest rates and reserve requirements tends to speed up the economy and is used during recessions to incentivize investment and reduce unemployment. The seventies stagflation, however, created a conundrum. Under stagflation, both unemployment is high and inflation is high. Now, what do we do? Raising the rates and the requirements will increase unemployment. Lowering the rates and requirements will increase inflation. We’re screwed!
Along came the economist Milton Friedman. He posited that Keynes had the issue backward. Efforts by governments to stoke demand created inflation and disincentivized work. Furthermore, the taxes required to sustain things like social safety nets and public goods, especially taxes on high-income earners, discouraged investment as much of the returns from one’s investments is then lost to taxes. Instead of focusing on increasing and sustaining demand (demand-side economics as proposed by Keynes) Friedman suggested that the state should focus on encouraging the investors to invest (in other words, supply-side economics). Friedman and his associated Chicago School of economics advocate for lower taxes, especially on the wealthy, and “liberalization” of the market. In other words, instead of the government paying for public goods, these goods should be privatized because private markets can provide these goods more cheaply and efficiently. Furthermore, social safety nets should be eliminated, incentivizing people to take whatever jobs are there rather than living off the government largess.
This position was embraced by political conservatives in the United States. Conservatives had always opposed the kind of social democracy promoted by the New Deal and the Great Society investments in social safety nets and public goods. As you see from the chart, Social Democracy is to the left of the Centrist position on the economic spectrum and overlaps with Democratic Socialism. Friedman gave the theoretical support needed to criticize Keynesianism and social democratic public investments. Obviously, his theories were also attractive to investors who were all about being stimulated.
President Carter started implementing some of Milton Friedman’s ideas, but supply-side economics got its big shot in the arm with the election of Ronald Reagan (in Britain, Prime Minister Margaret Thatcher also embraced Friedmanite theory). Reagan ran on the message that “government is not the solution…government is the problem.” In 1980, in the face of stagflation, Watergate, the Pentagon Papers, the Church Commission, and other government scandals, it sure seemed that government was problematic. Reagan won in a landslide election and proceeded to roll back the New Deal and Great Society programs of the previous era. His approach was called Reaganomics. This approach to the economy has been a driving force of American economic policy ever since.
So, does it work? Weeeeelllllll.
In the end, Stagflation wasn’t so much as resolved by Reaganomics as it was by Paul Volker and the Federal Reserve. Volker decided that the best way to end Stagflation was to…create a recession. The Federal Reserve (the Fed) jacked up its rates and the economy crashed. The result was massive unemployment and hardship, but inflation did fall. Once inflation fell to an acceptable level, the Fed lowered rates and stimulated the economy. For the rest of Reagan’s term, the economy grew. There was a brief recession in the early ’90s, but under President Clinton, largely following Reaganomics programs, the economy grew–largely as a result of a new thing called the internet. This growth continued through the early 2000s despite a brief recession when the tech bubble burst.
This growth is a good indicator that supply-side works. Incentivize the investors and they will invest.
On the other hand, the benefits of this economic growth are not as widely shared as they were under the more Keynesian demand-side policies of the postwar years. This resulted in a great deal of instability as wages stagnated while corporate profits took off. Increasing piles of wealth were locked up in the hands of fewer and fewer people. This discrepancy between the success of the investor class and stagnation of the working and middle class came to a head in 2008 in the throws of the Great Recession.
It turns out when investors can invest with little or no oversight, there’s an incentive to invest in riskier opportunities. In the 2000s, as a result of numerous supply-side financial reforms, investors created a bubble in impossibly complex mortgage-backed securities. When the bubble burst, it took down the global economy in much the same way as the Great Depression. By the end of 2008 politicians all over the world were rushing to help the failing investors by offering billions in bailouts. The Fed purchased trillions of dollars of toxic investments to free up investors from the weight of their junk bonds. Meanwhile, millions of homeowners found themselves out on the streets as landlords and banks foreclosed or shuttered rental properties. The helping hand of the government was decidedly one-sided.
The Great Recession provided an opportunity for a fascinating natural experiment between Friedmanite supply-side economics and good, ol’ fashioned Keynesian General Theory. You see, all of these bailouts of the big banks and investment houses, as well as declining productivity, caused massive increases in the national debt for all affected nations. Supply-siders don’t like debt because debt tends to lead to inflation and inflation discourages investment. So, debts are bad.5 When a nation is running deficits, according to supply-siders, it’s necessary for that country to cut spending and raise taxes (on income, not investment) in order to balance budgets. Only when national budgets are under control will investors have the confidence to open the investment tap and get the economy growing. This is called austerity.
Of course, this is exactly the opposite of what the General Theory predicts. Keynesians advocate ignoring the threat of inflation and focusing on increasing demand through government stimulus. Economist Paul Krugman scoffed at the “Austerian” plans as appealing to the “Confidence Fairy” to fix the economy. Keynesians predicted that austerity would lead to significant suffering on the part of working people without actually helping to turn the economy around. Internationally, governments were more or less enthralled with the supply-side theory, so they more or less instituted austerity. That created a testable environment. Would the Confidence Fairy show up for those nations that instituted more austerity as predicted by the supply-siders, or would the nations implementing more stimulus and less austerity validate good, ol’ Keynes?
It turned out that the General Theory remains the best tool for drawing up economic policy. Nations following austerity principles fared consistently worse than those that embraced less austerity and more stimulus. The more severe the austerity, the worse the performance. Writing for the Guardian, Nobel Prize winning economist Paul Krugman noted,
the benefits of improved confidence failed to make their promised appearance. Since the global turn to austerity in 2010, every country that introduced significant austerity has seen its economy suffer, with the depth of the suffering closely related to the harshness of the austerity.Paul Krugman, The Guardian, April 29th, 2015
Subsequent research into austerity vs. stimulus confirms this observation. After a stint in theoretical limbo, Keynes and his General Theory is back and ready to party!
But he’s not invited to all parties…I’m speaking here of political parties.
And this is the gist of the titular question: why are so many of the articles I share seemingly supportive of the Democratic Party. Since the end of the Great Depression, solidified by the post-war prosperity, Keynes’s General Theory has been the central position in economic theory. There was, however, about forty years where he had to play second fiddle to Milton Friedman. Furthermore, supply-side theory remains a favorite of the investor class. The investor class is a major contributor to political campaigns. There’s a lot of pressure on political parties to conform to the expectations of the economic elite.6
Political conservatives tend to align with the economic elite. In the United States, conservatives also embrace individualist values and deride any semblance of dependency. There is an emphasis on work ethic and an impermeable myth of the so-called “Welfare Queen”, Ronald Reagan’s icon of the welfare recipient who refuses to work because she lives large on the public dole. Today, the Republican Party is solidly entrenched in conservative philosophy and invested in a supply-side theory that it has promoted for the last forty years.
The Democratic Party is more of a mixed bag. Some, like Senator Joe Manchin are pretty conservative and more likely to advocate Chicago School policies. Many Democrats are solid Keynesians with a growing caucus of old-school New Deal Social Democrats and a smattering of Democratic Socialists at the far left, like Alexandria Ocasio-Cortez.
If we overlay the Economic and Political spectrum with the U.S. Party Spectrum we see that they don’t quite align with the Center of Economics Thought.
This puts me in a bit of a bind when it comes to being “unbiased”. What constitutes a bias? Do I try to account for the political positions of my students and their parents by trying to find an elusive center in an increasingly polarized political environment? Doing so may distort a general understanding of economics as a discipline. Or do I teach to the center of economic thought which will, by virtue of political alignments, appear to favor the Democratic Party position simply because the Democratic Party more closely aligns with the economic center?7
This is not only a problem in economics. It’s also a conflict when teaching any social science. How do we span the political divides while at the same time offering an understanding of the discipline with as little distortion as possible? I have to make a call knowing that it is impossible to satisfy everyone. Well, I choose to teach the center of the discipline while acknowledging that there are debates to the left and to the right of the mainstream. I also have to acknowledge that I’m sympathetic to one side of the debate over the other, but I want to give the other side of the debate a fair hearing. It’s a tricky balancing act.
Hopefully, this admittedly long exposition helped explain my approach.
- That’s not to say that I don’t have a bias and a personal preference. I am personally very critical of capitalism. Frankly, I’m critical of just about all “isms”. Isms tend to encourage the worst of all isms–dogmatism. I like to follow the data and understand the lived experience. I personally think capitalism has been an amazing human technology for advancing exchange and innovation. But I also think we can do better. I believe, based on the long view of history, that capitalism will, eventually, run its course and humanity will have to find other ways to distribute resources. I would prefer a democratic system for doing so. What will that entail? I don’t really know. But I have some ideas…all of which are outside the curriculum of the Honors Economics Course.
- Reminder: The Factors of Production are Land (physical resources, all of which is derived from the earth in some way), Labor (human work), and Capital (wealth that can be invested into organizing Land and Labor for the sake of an economic gain or profit). The State of Florida and your textbook also mandate that I include Entrepreneurs as a factor of production, so I do. It is, however, propaganda. Entrepreneurs are typically holders of capital, so their inclusion as a factor of production is redundant. Also, there are other organizing entities that are not necessarily entrepreneurs, like the state or non-profit organizations. I admit that that is my bias and you can accept or reject the argument as you see fit.
- That being said, there is a proverbial elephant in the room when it comes to socialism. Namely, it doesn’t really exist in any generalizable way, so different socialists have different ideas on how to set up a socialist political-economy. As it stands, the only examples of socialism we have at the scale of the nation-state is the systems created by socialists following the model created by Vladimir Lenin and Mao Zedong. This is a system by which the state takes control of the factors of production and, in theory, serves the interests of “the people” by organizing the market and the distribution of goods and services. These systems don’t have a good track record. They tend to be autocratic, corrupt, and inefficient. It’s important to note, however, that most socialists are opposed to such arrangements for the very reason that they are not democratic either politically or economically.
- It’s important to note that what is considered “conservative” in the United States, does not necessarily align with what is considered conservative elsewhere. As a political movement, conservatism simply means that government should seek to protect and preserve traditional values in order to maintain stability in a society. Political conservatives emphasize traditional institutions that are dedicated to these traditional values, like the traditional family (in the United States this is the heteronormative nuclear family), mainstream religion (in the United States that is Protestant Christianity), the military and systems for maintaining law and order (police and corrections). In the United States, traditional economics is associated with capitalism. That’s not true for much of Europe where the traditional economy was Feudal with an emphasis on Vassalage. In Russia, the conservatives are old line communists. This is what makes talking about this stuff confusing.
- At least that’s the argument. Critics of the Chicago School point out that supply-siders tend to be pretty selective when it comes to debt. For instance, Ronald Reagan, the patron saint of supply-side policy, ran huge deficits. George W. Bush further accelerated the national debt with unpaid for wars and massive tax cuts. The Trump tax cuts in 2018 added another trillion dollars to the debt and growing. All with nary a peep from supply-siders. But the stimulus passed under President Obama and the the prospects of a massive public investment under Biden’s Build Back Better are derided as examples of profound fiscal irresponsiblity that will explode the debt. So when debt results from tax cuts, that’s fine. Public investment, however, is off the table. Funny how that works out.
- It’s important to note that not all members of the economic elite are supply-siders. There are what seem to be a growing number of wealthy people who are advocating Social Democratic policies even if such policies mean higher taxes and increased regulation. Some are morally sympathetic with working Americans who are finding it increasingly difficulut to make ends meet and to better their conditions. Some are responding to growing Democratic Socialist and other left wing movements since the stunning success of the Bernie Sanders campaign. Others are also concerned about the threat of a fascist resurgence resulting from chronic economic uncertainty. Regardless, not every rich person lives according to the Vile Maxim.
- It’s standard practice for conservatives in the United States to accuse political liberals or progressives of being radical leftists and Marxists. We see it all the time. This is simply disingenuous. A socialists seeks to end capitalism. A Marxist believes in the revolutionary overthrow of capitalism and the creation of a stateless, classless society. If someone isn’t advocating for democratic control of the factors of production, then they are not a socialist, let alone a Marxist. Support for a social safety net is called Social Democracy and used to be largely accepted by both Democrats and Republicans from the end of World War II until the Rise of the New Right under Ronald Reagan.
So here’s the challenge: This post is especially long. I have set aside a pool of two-hundred points extra credit for anyone who reads this post and answers the following question correctly. For everyone who answers the question by the time I close grades for the quarter, I will divide the points. If you are the only one to answer in that time you get all 200 points. If five people answer, everyone gets forty points. So what do you do? Tell your friends to read the post?
Question: There is a Latin term in economics, caveat emptor. What does this term mean and what economic theory described in this post does it most closely align with?