Economic definitions are seldom agreed upon by different economic tendencies. These terms are likely to be disagreeable to some, but are at least a point of departure.These definitions as regards authors include only the theory as explained in this text.
Aggregate Demand [ Keynes ]: total societal buying power
B2C: business to consumer sales on the Web
B2B: business to business sales on the Web
Civil society: transformation of society from norms and mores based upon feudal, national and entho- cultural criteria towards more market-based criteria. Sociologist Max Weber described this a moving towards a more bureaucratic model, based upon written rules of law. Other sociologists described different 'continuums' of this transition towards modern identity as rural-urban or gemeinschaft-gessellschaft [see New Soviet Man]
Counter-cyclical spending [ Keynes ] : deficit spending by federal government during recession
Creative Destruction [ Schumpeter, Greenspan ]: process by which efficiency squeezes out some jobs, but new innovations and investment creates new jobs.
Deflation: situation with prices generally falling
Falling rate of profit [ Marx ]: idea that too much investment in machinery might lead to too much overproduction/underconsumption and to general collapse of capitalism [see rising rate of profit]
Federal Reserve: government agency founded at beginning of 1900s, primary current job is to keep money supply current with aggregate production levels
Fiscal policy [ Keynes ]: taxing and spending policies by government
Greenspan, Alan : Federal Reserve Chairman from 1987 until present, using revised model of 'creative destruction', Greenspan prevented possible Depression in October 1987, then supplied enough liquidity during early 1990s to fund the rising Web-based global economy
Gross Domestic Product: annual aggregate production output of a country
Gross National Debt: total cumulative, combined debt of a country
Inflation: situation with prices generally rising faster than production levels
Innovation: [Kondratieff, Schumpeter ] new technological idea or device capable of employing labor within capitalist, profit-making structure
Input-output model: [ Keynes, Leontieff ] way of combining the aggregate
production of a country
with a distribution system, normally through the federal level; associated with
America during World War ll
Keynes, John Maynard : 1920s through 1940s British economist who developed idea of counter- cyclical spending to stabilize business cycles
Kondratieff, Nicholai : Russian economist who helped develop 'long wave'
model of capitalist
development, the idea was that 3 forty-year cycles had occurred between 1790
and 1913 and that some sort of self-stabilizing mechanism existed withinb capitalism;
concept later became seen as contradicting Marx's idea of falling rate of profit,
leading to Kondratieff's imprisonment and death
Labor theory of value [ Smith, Marx] : economic idea that the amount
of hourly human, physical time
expended in the creation of a commodity largely determines its price; Adam Smith
and David Ricardo created the concept; Marx refined and greatly expanded it;
but since Marx, it has been fetishized into an almost religious quality by some
leftist writers
Labor-Dominant Production : modern economic system in which commodities
are produced with
large proportion of available workers involved and with most information in
the process is spread out among the workers and management, and information
control is relatively fragmented
Leontieff, Wassily : economist who helped develop the 'input-output'
model with which the
United States fought World War ll
Liquidity trap [ Keynes ]: unusual economic situation where central
back has lowered interest rates
close to or actually below zero (through artificially induced inflation ), but
private investment in job-producing area is too slow to maintain good employment;
much of modern economy was in such a liquidity trap during the 1930s, quite
possibly present day Japan has been in a liquidity trap since the early 1990s
Long wave theory: [ Kondratieff ] idea that capitalism has gone through a series of up and down eras of profitability starting around 1790
Knowledge-Dominant Production : a new postcapitalist economic system
in which commodities are
produced with a smaller proportion of available workers involved and with most
information in the process centralized within a computerized network; the method
of control over this information base will largely determine both the survival
of this hypothesized system, as well as its political and social nature
Marx, Karl : radical economist who revised Adam Smiths and David Ricardo's
labor theory of
value;basically Marx believed that the aggregate effect of the labor theory
would be to promote too much efficiency in the manufacturing process and lead
to economic crisis
Monetary policy: the acts of the Federal Reserve and the Open Market Committee which increases or decreases the amount of physical currency in the banking system and the short term interest rate
Moral hazzard : central bank policy of altering monetary policy, usually
to monetize debts of major
financial entities facing looming unpayable debts; normally the term denotes
pejorative behavior or unfair positive treatment by the Fed; the 1998 ?? 'coordinated
effort' led by the Fed to bailout Long Term Capital scrapes very close to moral
hazzard, the unwillingness of the Fed to lower interest rates to try to preserve
the few surviving family farms probably is the opposite of moral hazzard
the 'New Economy': muddled concept of the American economy since the early 1990s; for present purposes, it represents the transition stage between the end of existing capitalism and a new, yet to be formed 'postcapitalism'
New Soviet Man (sic): belief by early Soviet theorists that it was possible
to use massive government intervention to create new identity among peasantry
of former Czarist empire, comparable to the changes apparent among European
and American working class during the early 1900s, seen as 'civil society'.
This concept was twisted by T. Lynsenko under Stalin to apply to genetic theory
as well. At its base, New Soviet Man theory implies capitalism and socialism
are equivalent, multiple roads to modern identity. Present day cultual diversity
theory has part of its roots here, except that diversity has basically dropped
the idea that there is something valuable about the modern identity. Theory
required massive governmental police bureaucracy to continually monitor the
population and possibly helped set the stage for Stalin's terror and purges
of the 1930s. It was as successful in former Soviet Union as in United States,
which is why the Soviet Union is no more.
Open Market Operations : the process by which the Federal Reserve attempts
to regulate the money
supply through the banks by buying and selling bonds, if the Fed purchases bonds,
this puts money into the banks, if the Fed sells bonds, this decreases the money
supply; normally the Fed uses Treasury bonds in these transactions, but the
current drive to erase the federal debt may alter this practice
Organic composition of capital [ Marx ] : the proportion of labor (or
'variable capital') and machinery
(or 'fixed capital') in the capitalist system; Marx believed that a rising organic
composition would be associated with a collapse in the economy; this complicated
term could be reduced to the idea of overly rapid efficiency increases leading
into overproduction
Over production [ Marx ] : idea that GDP is producing more than can
be consumed; roughly equivalent
to term 'under consumption'; opposite of 'supply-side' economics
Productivity: producing the same amount of GDP with fewer labor hours, also known as efficiency
Profits: difference between the expenses in aggregate production by a country's owning class and the amount that the owning class is able to charge for the aggregate production
Ricardo, David : English economist of the early 1800s who further developed Adam Smith's labor theory of value
Rising rate of profit : a new term created to explain how the Kondratieff
long waves have tended to
mitigate the effects of increasing efficiency and Marx's falling rate of profit
Secular stagnation [ Keynes ] : term used to describe the difference between
the 1800s model of
investing from the 1930s model; this type of investment tended to try to maintain
short term profits within the monopoly sector; through investment in productivity
increases within in a flat or slowly falling GDP; private investment continued
throughout the 1930s, but not generally in job-producing areas; secular is another
term for economic, thus 'secular' or 'economic' stagnation
Schumpeter, Joseph A. : Austrian economist who refined Kondratieff's long wave model, created term 'creative destruction' and trained many economists while at Harvard University
Under consumption [ Marx ] : idea that aggregate wage base in insufficient to consume all that economy is producing; roughly equivalent to term 'over production'
Velocity ( monetary velocity ) [ Keynes ] : the average number of times
the physical money base
circulates or 'turns over' annually; a simple calculation is to divide the GDP
by the physical currency base
Wealth effect [ Greenspan ] : a rapid rise in aggregate stock market
value over the value of the real
GDP, which could lead to consumer demand for items not already produced and
into inflation