December Blog

Adam Smith was born in Scotland.  When he was fourteen he entered the University of Glasgow to study moral philosophy.  He developed a desire for liberty and free speech.  In 1750 he met someone who he worked with.  Together they developed ideas on politics, economics, and religion.  Their writings became the Scottish Enlightenment.  In 1759 he published the Theory of Moral Sentiments which included lectures from previous years teacher at the University of Glasgow.  He then developed the idea "communication depends on sympathy between the individual and the wider community."  His focus later changed to economics and he wrote the Wealth of the Nations.  It was the first book to suggest a free trade system.  The free market system was based on supply and demand.  He also believed wealth was in the essentials of life instead of things like gold.  Adam Smiths ideas influenced many later economists.

Capitalism is "an ecomomic model that calls for individual households and privately owned businesses to control the economy."  Perfect competitionis where privately owned businesses decide what and how much goods or services to provide.  The prices of labor, capital, goods, and services and based mainly on market forces.  Prices fall when supply exceeds demand and prices rise when demand exceeds supply.

The government deffinitly should have bailed out the auto industry.  If those industries collapsed it could lead to a collapse of the whole U.S. economic system.  Although it caused more taxes it works out in the long run beacause without huge industries like that our economy would not work.  Also many of the industries have already paid back portions of the money.

The Articles of Confederation

1. The Articles of Confederation were articles that made a national government with limited power. 
2. The key features of the articles were no chief executive, laws needed approval by nine of the thirteen states, congress did not have power to tax citizens, they could only request tax money from states, congress did not have the power to draft an army, no national court system, any changes to the articles must be approved by all thirteen states, congress did not have the power to collect state debts owed to the federal government, and congress did not have the power to settle disputes among states.  
3. They did want want to make a strong, abusive central government.
4. The key problems were the lack of leadership from central government, the central government could become too powerful, states often chose not to pay taxes and the federal government didn't have the funds to operate effectively, there was a possibility of not having an army if no one volunteered, issues could become too big for the state courts to handle, it was nearly impossible to make changes to the articles because any one state could stop an amendment that all the other states wanted, they could not have money if the states refused to pay, and disputes among states often could not be resolved.
5. Congress not being able to tax citizens or draft an army probably caused the most issues because if the states refused then the government would have no money and no military.
6. There should have been some form of tax and drafting system so it wasn't abusively forced but it was still required.