1. Chapter 12- Exploring Economic Equality

2. Question Which do you think society should value more? Why?
Economic freedom to make your own choices and succeed or fail at your own risk?
Economic equality with others; sharing success or failures as a society ?
Chapter Issue :
To what extent should government encourage economic equality ?
Governments determine which economic system best addresses the economic needs of their citizens.

3. Defining Economic Equality
Understandings of economic equality varies( this can effect the economic goals of a country):
Egalitarianism
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There should be guaranteed annual income to meet each person’s needs
Equality of Opportunity
Minimum wage
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Equitable Distribution of Income
People should earn equal wages for work of similar value
People who earn more should pay more taxes than those who earn lower incomes

4. Economic Spectrum
Values of the collective Value of the individual High degree of government Low degree of government intervention in the economy intervention in the economy Equitable Distribution Egalitarianism of Income Equal Opportunity In most liberal democracies , left- leaning political parties want to eliminate or reduce economic inequality in society( idea that wealth created in a society should be shared equally ) Theory that it may reduce tensions and conflict between different classes in society

5. Promoting Economic Equality
Analyzing the stats on page 315:
Canada gets a “C” grade and ranks 10th out of 17 peer countries.
A significant increase in income inequality occurred in Canada between 2000 and 2006.
According to the source what keeps the poverty level down in Denmark and Sweden?

6. Economics and Liberalism
The basic economic systems
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All look to address the problem of-:
A. Scarcity- sources and products are limited
B. Choice
1.______ will be produced?
2._______ will goods and services be produced?(Production)
3._________________ the products be distributed to and at what price? (Distribution)
4.Who will make the decisions?(__________________________________________________________________)

7. Degree of Government Involvement in the Economy
High Low Command economy Mixed economy Free -market economy Communism Democratic Modern Classical socialism liberalism liberalism

8. Command Economy Characteristics
Centrally ______________________
Public enterprise
Response to Classical Liberal values of the Industrial Revolution
Examples
Soviet Union – Stalin
Fidel and Raul Castro – Cuba

9. Command Economy Advantages Disadvantages
Economy can be efficient and use resources to meet planned goals and targets
Individual consumers may not have their needs met, individual wealth not a goal
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People have no choice of career ,live with more regulations
Government can ensure full employment
Individuals have little incentives to work harder or improve company or product
Marketplace is stable and regulated , without recessions or economic boom
Economy is ______________________________________________________________________
Goals of society met first . Profits benefit society
Waste and inefficiency a problem; society suffers if government does not consider a certain goal important( protection of environment)
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Government focuses on one type of production rather than meeting the people’s personal needs

10. Egalitarianism and Cuba
After revolution – Fidel Castro tried to achieve economic equality for all Cubans
Work valued for its positive impact on society (doctor and cleaner, both had positive impact on society)
Collapse of Soviet Union-Loss of trading partner
Cuba faced shortage and made a number of policy changes
Allowed __________________________________
Encouraged ______________________________
Main aim education, health care ,clean water
Coming to power of Raul Castro –moved economy towards private ownership of land
New ways of raising productivity

11. Free- market Economy
Theoretical concept ; no pure free market economy exists
Closest example – ______________________________
Characteristics
Laissez – faire economy
Capitalist economy
Private enterprise
Values classical liberalism – ____________________________________________________________________________________________________
John Peron + Adam Smith ( self interest and liberalism benefit all society)

12. Free- market Economy Advantages Disadvantages
Competition = lower prices , higher quality and wider selection of goods
Wide gap between high and low earners
Efficiency is encouraged in use of resources and operation of companies to keep production cost down
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Technology and innovation encouraged
Period of high unemployment
Workers and owners motivated to earn money and make profits
Product or service advertising can manipulate consumer demand
Economy responds to change quickly
Producers form monopolies and exert too much control over the marketplace
Company ______________________________________________________________________________________________________
Resources used inefficiently , cost effect people (factory pollution, depletion of resources)- resources wasted on wants not needs