Rise of Neo-Conservatism

Transcription

1 Rise of Neo-Conservatism

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3 Evolution of western economy Classical Liberal Economy Laissez Faire Capitalism Large inequality Robber Barons - Those became rich through unscrupulous methods Oligopolies establish Free market lead to a large increase in wealth for the economy Modern Liberalism - Welfare Capitalism Create less inequality through gov t run social programs Care for those who are left behind Large gov t involvement Demand-side Economics

4 Stagflation - USA 1970s Stagflation - a condition where both unemployment and inflation are high US growing gov t debt High levels of tax Costs of in society increasing: Strong Labour Unions High wages(minimum wage too high) Many Government regulations OPEC raises price on oil This impacts the price of everything This lead to inflation and unemployment Demand-side economics would have worked but gov ts were always spending Deficit - The amount of money taken in vs. the amount of money spent Debt - The accumulation of deficits

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6 Neoconservatism - A Reaction to Modern Liberalism Believes liberal principles had gone to far Civil rights leads to affirmative action(unfair) Weak diplomacy Abuse of Taxes Public education was a failure Lack of morality in a liberal society Aligns with parts of the classical liberal ideology Today it is represented by the Republican party and parts are represented by the Conservative Party of Canada

7 Chicago School of Economics

8 Supply-Side Economics Increase supply by reducing tax and gov t involvement Privatize and deregulate More money in people's pockets will lead to more spending More incentive to invest Lower tax on corporations to give the more freedom with their dollars Tax breaks for those who benefit the economy

9 Friedrich von Hayek The Road to Serfdom (1944) Advocate of free market capitalism Demand-side economics(keynes) was excessive intervent He opposed both monetary and fiscal policy as it was a may of controlling the economy Ideas would inspire Chicago School of Economics

10 Milton Friedman Supporter of monetarism and wanted less gov t intervention Leakage - individual income saved in banks, income lost to taxes, monies spent on imported goods Monetarism can solve this leakage Gov t involvement limited to - property rights, printing money, and maintaining law and order

11 Monetarism System of a country controlling the money supply Money supply directly relates to economic issues within a state Believed moderate supply increase would lead to low inflation with economic growth

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13 Neoconservatives in Practice

14 Trickle Down Economics(Reaganomics) Voted Ronald Reagan( ) in on Principles of Supply-Side Economics Often referred to as Reaganomics or Trickle down economics He wanted to lower taxes, drop regulations, reduce government spending Idea is that if businesses have more money their money will trickle down into the economy This lead to economic growth within the 80 s The downfall of his economic policy would be that he increased military spending and ran a huge debt This aligned with the Cold War philosophy of Deterrence

15 Margaret Thatcher The Iron Lady Britain s gov t spending was out of control Followed the Cradle to Grave Philosophy National Health Service(NHS) was a huge cost Publicly ran many resources but propped up mines that were no longer making money Constant strikes due to strong Labour Unions Margaret Thatcher was elected to clean up the mess ( ) Her policy involved: Deregulation Privatization of industry Reducing power of Labour Unions Policy didn t immediately have a positive impact, but would grow through time

16 Brian Mulroney ( ) Progressive Conservative Prime Minister who admired both Reagan and Thatcher First majority Conservative in 23 years Privatized Air Canada, Petro Canada and Canadian National Railway Cancelled the Nation Energy Program(NEP) Created the Free Trade Agreement(FTA) Pre-NAFTA agreement between just US and Canada Tried to solve Canadian Debt issues Due to Liberal Senate, this was difficult Canadian Debt Lester B Pearson( ) - 1 Billion of Debt Pierre E Trudeau( *) - 32 Billion of Debt Brian Mulroney - 39 Billion of Debt

17 Commanding Heights Start video at 1:12