Social & Global Studies

Unit 2 Economic Thinkers & Theories

Interpret the Image –How Does it Speak to M. Friedman’s Core Ideas About Market Economies (dubbed the “free market”)?


Economic Schools of Thought

SCHOOL 1 Classical / Neo-Liberal / Pure Free Market / Laissez-Faire School (Core Thinkers — A. Smith, D. Ricardo, F. von Hayek, M. Friedman)  LINK to PUBLIC CHOICE & ANALYTICAL ECONOMICS

SCHOOL 2 — Liberal / Keynesian School (Core Thinkers — T. Malthus, J.M. Keynes, J.K. Galbraith)  LINK to PUBLIC GOOD & NORMATIVE ECONOMICS

SCHOOL 3 — Marxian / Mainstream Critics / Radical Reform School (Core Thinkers — T. Malthus, K. Marx)

           The Critical School Of Thought: A Case Study of an Updated Critique

          “The more radical the idea, the more troubled the society from which it originates.” (view The Shock Doctrine)


           The Shock Doctrine Documentary (Short Film Version 2009 by Naomi Klein) VIEW HERE  Shock Doctrine

           Naomi Klein’s Shock Doctrine Home Page

           To view the full documentary visit The Shock Doctrine (2009)


           # 1 Joseph Heath on Economics without Illusions (Podcast Interview)

           #2  Listen to the Interview with Roger Martin on “Fixing the Game” and the Obsession with Increasing Shareholder Value


           # 3  Marx is in the Air (Globe and Mail 26 March 2011)


           # 4  Where Modern Economic Theory Went Wrong (The Economist)

Economic Schools of Thought Notes

Fear the Boom & Bust (Neo-Classical vs. Liberal School on the 2008 Financial Crisis & the Aftermath)

How Best to Deal with Economic Cycles 


→ I want to steer markets.

→ Business and economy driven by the animal spirits (Bear & Bull we have reason to fear it).

→ Gaps in capital investment, income and growth caused by the animal spirits closed using stimulus.

→ Its all about spending and maintaining the circular flow of money (if the flow is getting low need stimulus).

→ Government spending via stimulus, deficits, bailouts needed to avoid the liquidity trap.

→ Savings is destruction (the paradox of thrift = savings means no growth).

HAYEK (NOTE Hayek is critiquing Keynes’s theory as it is in fashion now)

→ I want to set markets free.

→ Level interest rates.

→ Keynes theory ignores human action and motivation.

→ Cheap credit dangerous.

→ Real savings comes first if you want to invest.

→ The market coordinates time with interest.

→ Booms are the problem is the thrust of Hayek’s theory (booms plant the seeds for its future destruction).

→ Low interest rates, the expansion of credit and mal-investment wreck the economy.

→ Stimulus as an incentive sends out the wrong market signals (resource competition pushes up inflation).

→ A credit crunch (too little available cash and credit) is not a liquidity crisis but simply a broken banking system.

→ A boom is a binge that leaves an economy full of devalued capital.

8 Core Economic Thinkers

“All money is a matter of belief.” A. Smith

“Economics is the most important discipline because it determines the course of history.” K. Marx

Primary Readings

8 Core Thinkers Tasks HANDOUT

8 Core Economic Thinkers READINGS
Economic Thinkers Hypothesis Testing
Economic Thinkers 10 Economic Goals
Contemporary Thinkers READINGS
2 →  In Your Expert Group (by thinker) complete the teaching resource HANDOUT.

3 →  In Your Groups of all Eight complete the following tasks below:
→ Complete the Economic Statements & the Economic Questions as a group.

8 Core Thinkers Economic Statements

8 Core Thinkers Economic Questions


As a group, read & review the Contemporary Thinkers READINGS and align one (i.e., E. Ostrom, A. Sen, M. Carney, & D.
        Moyo) with your thinker in the CORE 8.  Provide 2 reasons for each alignment.

6 → For portfolio marksindividually read the Food Security Briefing and connect your thinker’s core ideas to the issue by following the instructions below.

Thinkers’ Core Ideas 


→ the pursuit of self interest restrained by the market.

→ no intent to promote the public interest OR knowledge about how much one’s actions / interests promote the public interest.

→ the profit motive provides major stimulus for economic growth and prosperity as a drive exists to improve one’s own condition in life.

→ self-interest and competition (i.e., assume a condition of perfect information and competition) work in tandem to advance the common good (known as the “invisible hand”).

→ prosperity cycles, the law of accumulation and the law of population (investment → output, which → investment …) (→ demand for labour creates competition in the market which keeps compensation low & profits high).


→ a seemingly balanced economic system will inevitably become unbalanced.

→ Malthusian dilemma (population will outstrip the productive capacity of land → LAW OF DIMINISHING RETURNS).

→ global developments such as technological breakthroughs in food science (GMOs), production, trade and distribution as well as an increasing trend in urbanization and continued intensification of industrialization has led to stabilization or decline in population growth in western world. 


→ self-interest leads to inevitable and bitter class conflicts as one class can only prosper at the expense of the other classes (zero-sum game and dependency theory).


→ e.g., import restrictions, restrictive wage practices and exploitation of surplus value.

→ case study → the implementation of restrictive laws in a time of food shortages (i.e., the profit interests of the OWNERSHIP class enabled by these restrictive laws that hurt the other classes).

→ one solution to devastating dominant class interests is free trade (comparative advantage and specialization).


→ capitalism is simply a series of class struggles between exploiters and exploited in the arena of economics and politics.

→ economic laws enable and perpetuate class conflicts.

→ capitalist system immoral and would destroy itself as “all capitalists are immoral” → spur on a class revolt.

→ developed the idea of SURPLUS VALUE in terms of capturing the scale of exploitation (labourers receive only a fraction of what their work is worth (wages disproportionate to income generated for the firm).


→ government has a responsibility to manage investor confidence and investment spending through government stimulus in the economy.

→ business cycles most impacted through (G) and (I), not (C).

→ employment levels is the key economic indicator. 


→ advocated for a “social conscience” to capitalism.

→ capitalism has led to private affluence and public decay.

→ birth of the modern business corporation and increased dominance of multinational corporations means and ever-growing, interconnected and complex global economic and financial system.  This requires government intervention and oversight to ensure capitalism benefits everyone.

→ government can improve society and is an important vehicle to further the common good. 


→ avoid spending other’s money by maximizing the freedom to choose.

→ key focus on the size of the money supply, level of interest rates, price inflation, public debt and freedom to choose.


7 Core Economic Thinkers Summary 

FILM CASE STUDY → A Marxian Critique of Capitalism

The Rebel Sell Summary of Marxian Commodity Fetishism

Adbusters is a magazine that has been around since 1989, and their signature is the counterculture ‘culture-jamming’ movement: the idea is that you can subvert the consumer culture, and culture in general, with subversive actions or how you choose to spend your money.

According to the authors, adbusters are really just marketing an alternative lifestyle, as when they decided to sell the Black Spot Sneaker in an effort to un-cool Nike, something that Vans and other Nike competitors have been trying to do. Adbusters like to think the sneaker that they marketed was subversive to society, but the system is simply incorporating a new market segment. A new form of cool merchandise, not manufactured in the developing world.

This is emblematic of any countercultural movement, not an upset to consumer society, as seen for the first time in the sixties. Hippies saw the first sales of ‘different’ kinds of consumer goods: instead of quickly obsolete American cars, the Volkswagen Beetle became emblematic of the movement. Birkenstocks replaced sneakers as traditional footwear. Savvy marketers, had the term been in place at the time, might have been positioned to take advantage of the demographic swing. As it was, retailers started offering tie-dye and love beads in their outlets.

In the first of the Matrix films, the main character is offered a conundrum typical of Renee Descartes: he is in the world of a waking dream from which he must revive with a red pill. But instead of the philosophy of the movie being based on the philosophy of Descartes, it is actually based on Guy Debord.

Guy Debord, of the Situationist movement, is a Marxist, and claimed that consumer capitalism has taken away the authenticity of every human experience and then sold it back to us through advertising and the mass media. The world is not real, he claimed, we are alienated and imprisoned by this culture. In this system of alienation, mankind’s most profound desire is a desire to sleep.

According to Debord, in this society, concern for social justice and abolition of class in society dies away, unless (as a new revolutionary) a person cultivates: “consciousness of desire and the desire for consciousness.”

People must wake and take the red pill.

This is not a new metaphor – it goes back to Plato’s allegory of the cave. Indeed, Christians believe you can break free through death and escape into a heavenly kingdom. However, while Plato encouraged study to liberate the mind, and Christians promised salvation after death, Debord believed that simply wearing something different, or the altered placement of a piece of art would be enough to liberate people from this earthly prison. This is also the thinking behind the adbusters’ philosophy of culture jamming.

The problem with this is that it undermines the motivation to effect real change in society. It undermines traditional political activism, which is occasionally effective. According to the countercultural theorists, the system only represses the individual, and it should be rejected. Instead of working to change the institutions that make up our society to right a wrong or overcome injustice, the countercultural rebel simply opts out.

The philosophy of the counterculture breeds impatience and even contempt for the slow change that must be the result of more conventional means of changing the world by traditional political activism.


What Appears is Good and What is Good Appears.

WATCH → Karl Marx on Alienation (BBC)

LISTEN → Christopher Hedges Farwell to America CBC Ideas (Modern Marxian Critique) 19 NOV. 2018

NOTES on the MARXIAN SCHOOL and THE MATRIX (particularly J. Beaudrillard “Simulacra and Simulation” and Guy Debord “The Society of the Spectacle.”

SEE Course YouTube Channel (bottom left of homepage) for Supporting Videos on the Matrix Philosophy & the Allegory of the Cave


Economics 4 - Layer Cake

TASK → Place each ideology under a form of government detailed in the “ramp” directly above.

Supporting Materials to Construct Your 5 Ideology Venn Diagram

Ideology Materials #1

Ideology Materials #2

2 Types of Freedom

The BBC documentary The Trap Part 3 titled, “We Will Force U 2 Be Free” draws on thinker Isaiah Berlin’s belief that individual freedom is the most important condition for humanity to thrive.

He thought of two different kinds of freedom: 1) Positive Freedom and 2) Negative Freedom.

Positive Freedom

Berlin argues positive freedom is a society based on ideals or a constructed utopia where in order for individuals to be free, they must to be transformed into better individuals. And, those who do not realize or accept this transformation as true freedom must be forced or coerced into such a belief and practice.

Isaiah Berlin argues that this type of freedom has led to horror and unrest and is the exact opposite of freedom because positive freedom rests on the belief that there is one single or final answer to all human ills.

Negative Freedom

On the other hand, Berlin argues negative freedom is exercised in a society where individuals do what they want and nothing more. In other words, a society without a single set of ideals everyone must live by. Negative freedom, Berlin argues, is simply the practice of self-seeking individuals in pursuit of their own happiness. And it is this self-interest that has led to stability, order and growth in the developed world.