Download Modifying Liberalism to Meet the Needs of Society

Chapter 4 Part 3
Welfare Capitalism
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Kun 2014
Modifying Liberalism to Meet the Needs of Society
Social Studies 30-1
Use pages 142 to 153 in Perspectives on Ideology to complete the
following tasks:
The basic understanding is that the classical liberals came to understand
the “merits of some of their opponents’ views and modified the practical
applications of some their values and beliefs.” In this section you will see
how they modified but did not eliminate their ideology, classical liberalism.
To create focus for your work, write down the ‘question for inquiry’. How
did . . . __________________________________________?
Welfare Capitalism (seems like an oxymoron)
1. What points about capitalism did the classical liberals concede to the
socialists?
2. Define labour union.
3. Labour unions will be discussed later however, explain why they marked a beginning towards shifting
laissez faire capitalism more to the left and what this looked like.
4. George Pullman was similar but different from Robert Owen. Explain
5. Define welfare capitalism from the text’s glossary. Identify the American industrialist’s perspective of
welfare capitalism and then the ‘everyone else’s’ perspective.
6. List some of the earliest attempts at creating a social safety net.
7. Today’s status quo was yesterday’s radicalism. Explain this statement in reference to the early social
safety net.
8. The phrase ‘square deal’ hails from labour- big business unrest in the early 1900’s. “It’s a square deal”
means that . . .
9. Define progressivism:
10. “Pause and Reflect” on page 144 suggests that Theodore Roosevelt Progressive Party sought to challenge
an ‘unresponsive political structure in the U.S. Identify 3 principles that this new party hoped to implement
that challenged classical liberalism.’
a. ________________________________________________________
b. ________________________________________________________
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c. ________________________________________________________
11. Baby steps in our eyes, were the long strides of the moment. Explain the meaning of this statement to
the challenges to liberalism in the pre WWI era.
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Welfare State- The Emergence of Modern Liberalism
*** Your teacher will be providing you with notes about the causes of the Great Depression at this point.
The Great Depression is the catalyst to the creation of the welfare state. ***
NOTES:
Business Cycle:
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The Roaring Twenties:
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Over Production during and after WWI:
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Saturation of the Market
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Buying on Margin:
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Speculation as opposed to investment:
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The Crash of the Stock Market:
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Return to the text:
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1. All of the events above combined to create the disaster known as the Great Depression. Outline the ‘spin’ of
unfortunate events that would result.
2. Hypothesize why the depression would push the affected to question the liberal philosophies of laissez faire
capitalism and the role of government in society.
3. Why would conditions, such as those experienced in the Crowsnest Pass, sweeten an appetite for
communism?
The Great Depression will force governments to address the inadequacies of a free wheeling, liberal
system and while certainly not embracing communism as an alternative ideal, will look to the ‘left’ for
moderation.
Keynesian Economics
John Maynard Keynes (1883-1946), a British economist, studied the Depression and developed a
new theory stating that classical liberal economic theory, the basis of a free market economy, was
flawed.
Studying the business cycle, he believed that the basic
mechanism of the market economy, supply and
demand, needed manipulation in order to achieve full
employment. The market system thrives on the achievement of
equilibrium, found when the supply of a good or service is in perfect
balance with the demand for that good or service. With no government
intervention, the interaction between consumers and producers in the
‘market place’ determines equilibrium, that price place where the
consumers are willing to buy and producers are willing to produce.
Look at the graph and you will see equilibrium. Not only does it represent that perfect price, but it represents, to
classical liberals, the point of full employment.
According to Keynes, during times of stress, such as the Great Depression, people will _________________ their
money. If they do not invest and therefore there is no demand for the goods being produced, what will a
company do with its employees? __________________________ This could lead to a prolonged
________________________. He said that the unregulated market was dangerous.
On the other end of a recessionary trend is ________________________ where there is an increase in the
general price level of products, the cost of labour, and interest rates. List the sequence of events that occurs
during this period. 1. ________________________________ 2. ____________________________
3.______________________________ 4. _______________________________ .This sequence will lead to
other companies to _________________________ leading back to a r____________________. Hello roller
coaster!
List the reasons a supporter of no government intervention would use in defence of this rollercoaster ride?
Keynes, on the other hand, claimed that the ordinary citizen _________________________________
_____________________________and therefore, ordinary people would ______________________.
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Keynes’ plan centered on this factor, ________________ ________________. All that was needed was for
someone, or something to regulate this. Here’s how it works:
In times of inflation, governments
This will result in . . .
What the government then does
should
to prevent entering recession
The word deficit is associated with this process. Define deficit and then tell why running one in order to
stimulate the economy should not cause all the bankers and accountants of the world to experience heart
palpitations.
Explain the difference between fiscal and monetary policy.
Assuming we were in a recession, what would the government do with its fiscal policy?
. . . . and with its monetary policy.
Why does government spending influence what the economy will do?
Keynes’ theory, called ________________________________ suggested that even in a liberal, democratic
society, government could and should _____________________________________ uncertainty.
The Advent of the Welfare State
Theodore Roosevelt was to the ________________ deal as his distant cousin Franklin Delano Roosevelt was the
______________ Deal. Was F. D. R.’s deal a reflection of fiscal or monetary policy? Give evidence to prove this
is true.
This new attitude toward the government’s role in the economy represented the beginning of the shift to the
________________________ and a __________ economy, a mix of the _________________ with some degree
of government _______________________. The historical event that cemented the notion of the mixed
economy/ welfare state was _____________________ and it became a reality in most democratic countries by
the 19___s.