Category: Economics

Against Marx and Engels’ criticism of private ownership

One of the cornerstones of Marxist economic theory is the abolition of private property and in its stead have common communal rights.  This is a noble and idealistic idea but one suffering from lack of applicability.  It has been proven true on many occasions that people are motivated to work hard when they are offered material incentives.  The possibility and potential to own a house or a car or a jewel is what motivates most of us to work.  Such being human psychology, it is futile to think of idealistic conceptions espoused by Marx and Engels.  A cursory look at the state of commons underscores the ineffectiveness of this mode of ownership.  For example, our environment is degrading at a rapid pace.  The quality water in the oceans and rivers, the pollution levels in the air we breathe and the steady destruction of erstwhile pristine ecosystems can all be attributed to lack of private ownership.  If only all these resources were privately owned, it is difficult to foresee . . . Read More

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Defense Spending and the Military-Industrial Complex

Dwight Eisenhower’s warnings about the Military-Industrial Complex have proved prophetic in the years since. Addressing the nation on occasion of his tenure’s closure, he reminded Americans about the threat to democratic policy-making posed by this corrupt nexus. Levin-Waldman’s concept of the ‘iron triangle’ closely aligns with Eisenhower’s understanding. Indeed, the former President had to strike out Congress from his original Military-Industrial-Congressional Complex as his advisers deemed it to be too provocative (but factual nonetheless). In the Levin-Waldman model, we can substitute the Military as the dominant ‘interest group’, whose lobbyists are constantly pressurizing members of the Congress and Senate to get passed legislations favoring their industry.

The veracity of Eisenhower and Levin-Waldman claims are evidenced in budgetary allocations to the arms industry. The United States has by far the most powerful military in the world. Despite having no . . . Read More

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What is Social Capital?

The journal article by James Coleman titled Social Capital in the Creation of Human Capital talks in detail about the concept of Social Capital. The author identifies three predominant forms in which social capital manifests: “obligations and expectations, information channels, and social norms”. Social structural conditions under which social capital is created are explained in detail. He prefers the ‘rational action paradigm’, whereby social capital is useful for constructive social action. The author takes surveys of high school students in America to validate his theories and assumptions.

Coleman’s criticizes both the dominant analytic paradigms of social action.  Under the sociological model, the actor is seen as socialized and the action governed by social norms, rules and obligations.  The “principal virtues of this intellectual stream lie in its ability to describe action in social context and to explain the way action is shaped, constrained, and . . . Read More

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Speech Analysis: President Obama on student financial aid in the Democratic National Convention (2012)

President Obama has often included issues related to financial aid to educational institutions in his political rhetoric.  Although his reference to the ailing education system is articulated with a sympathetic tone there is also ambivalence and equivocation. In the Democratic National Convention of 2012, where he formally accepted the Democratic Party’s nomination of him as the Presidential candidate, the message is again one of hope rather than concrete action.  He begins the topic of education by acknowledging how his own education was made possible by government largesse and how the middle classes cannot do without student aid.  He then outlined how some of his initiatives over the last four years have made an impact in middle-class Americans’ access to education.

“For the first time in a generation, nearly every state has answered our call to raise their standards for teaching and learning. Some of the worst schools in the country have made real . . . Read More

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Management Research: Merger & Expansion

The fictitious company chosen for this exercise is a medium-sized investment bank called Armor Bank, which has a footprint in states in Southern United States. The bank has plans for penetrating markets in the rest of the country and is mulling options for a merger.

  1. Explain why government regulation is needed, citing the major reasons for government involvement in a market economy.

Government regulation is a concept that is seen out-dated in capitalist economies.  The faith in unfettered free trade is thought to be a panacea for all economic problems.  But empirical evidence points to the fallacy of this theory.  As it is, government intervention is only sought when there is a major economic crisis, like during the 2008 Wall Street crash.  It is a bit unfair for the general population that tax-payer money is doled out to greedy corporations when they are in trouble.  At the same time, during the boom their behavior is not regulated in the . . . Read More

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Is Social Policy primarily determined by the needs of the economy?

There is much truth to the statement that social policy is a product of economic imperatives. This is not in the true spirit of social democratic principles espoused in the legislatures, but has nonetheless become inevitable under the heavy influence of private capital (both domestic and international) in the era of neo-liberalism. Britain was for long recognized for its strong welfare tradition. But this status is changing gradually but surely. As Michael Rustin notes in his insightful analysis of the contradictions in the British welfare system, while public services have remained at the centre of New Labour governments of recent past, many market oriented changes have also simultaneously taken place. So, the original British welfare state, which was a considerable achievement on part of organized labour and citizenry against the forces of capitalism, is now becoming subservient to the market state. The consequence is that the health and welfare of workforce are brokered in “a . . . Read More

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Is unemployment within the labour market primarily voluntary?

The worldwide recession precipitated by the financial crisis in the United States has had disastrous consequences for the UK economy as well.  This most recent episode of recession in the UK happens to be the worst it had faced in the period following the Second World War.  Based on the GDP numbers for the years 2008 and 2009, one learns that “the economy contracted even more sharply than previously thought in the first quarter of 2009: 2.4 per cent compared to the preliminary estimate of a 1.9 per cent contraction.” (Lynch, 2009)  The promising rise of industrial production in April 2010 did provide hope for an early recovery.  But this hope was to prove a mirage as the trend reversed in subsequent months.  Though the UK took a little while to catch up with the crisis in the United States, at the beginning of the second quarter of 2008, the region’s economy was in acute recession.  It has been close to four years since the onset of recession and subsequent economic . . . Read More

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Op-Ed response to ‘Move Over OPEC – Here We Come’ by Ed Morse

The Op-Ed article titled Move Over, OPEC—Here We Come is compactly written with suitable supporting evidence.  The author Ed Morse having had experience in both the government (former State Department Official) and the corporate world (presently holding high office in Citigroup) has the requisite credentials for foraying into the topic in question.  And his command of statistics and analytic breadth further show his mastery of the subject.  Mr. Morse offers several insights into the current state of the global oil and natural gas industry.  He makes salient observations about the rising prowess of North America in the energy market, as the U.S., Canada and Mexico have ushered in a phase of increased extraction of energy resources.  Key energy resources discussed by Mr. Morse are crude oil and natural gas, where new discoveries in off-shore and wilderness areas of the North American landscape throw open new opportunities for self-sufficiency for the highly energy dependent . . . Read More

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With reference to motivation theory discuss the psychological foundations of pay

Financial reward or pay is a core component of employee motivation.  Eminent thinkers such as Maslow, McGregor, Tolman, Locke, Pavlov, etc have contributed to our understanding of workplace motivation.  Based on a synthesis of their theories, we are in a position to ascertain how key a role pay plays in motivating employees and enhancing their performance.  The rest of this essay will attempt to do the same.

Motivation theory is not a single monolithic framework of analysis, but rather a product of contributions from various fields/disciplines within humanities. The intellectuals mentioned above have offered their theories from the perspective of their respective fields/disciplines.  For example, Maslow, McGregor, Alderfer, McClelland have emphasized the physiological basis of employee motivation, whereas scientists such as Locke, Vroom, Kelly and Tolman have presented the cognitive basis of motivation.  Social/behaviourist theories of . . . Read More

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Derivatives are toxic weapons of financial mass destruction?

Derivatives are an integral part of modern financial markets.  Simply stated, a derivative instrument is a contract between two entities that specifies the values, dates, notional amounts and other conditions under which the transaction between them is to take place (usually at a future date).  Derivates play an important role in streamlining economic activity, as well as to facilitate liquidity in the markets.  Credit derivatives are an especially sought after instrument due to the legal exemptions afforded it.  On the flip side, the inherent complexity and speculative element in derivatives make them a high-risk option.  In the context of financial market booms and busts, derivatives are often criticized for artificially (yet inevitably) creating these cycles.  For this reason, it is not unreasonable to claim that ‘derivatives are toxic instruments of financial mass destruction’, although they have their utility when employed prudently.

The role played by . . . Read More

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