1. The Evolution of Modern Liberalism IT’S A ROLLERCOASTER RIDE SUPPORT CLASSIC LIBERALISM… OPPOSE CAPITALISM. SUPPORT SOCIALISM… OPPOSE COMMUNISM. SUPPORT MODIFIED LIBERALISM … NOW WE DON’T LIKE THAT ONE?!

3. Evolution of the idea of freedoms • Classical liberalism – negative freedoms • “Freedom from…” (oppression, control, e.g. freedom of conscience) • Industrial Rev – growth of capitalism, equality of opportunity can create inequality • Modern liberalism – positive freedoms • “Freedom to…” (you cannot be free if your basic needs aren’t met –e.g. freedom to access education, health care) • Great Depression, World Wars, urbanization, globalization = progressives: gov intervention to ensure equality of outcome

4. Post World War Two • Liberal philosophy drifted further left • acceptance of programs part of the welfare state supported by liberals. • e.g. universal health care & CPP

5. Journal Entry • Discuss the bias in the video clip by providing examples. • Do you agree or disagree with the producer? Explain your reasoning

6. Can you see any bias?

7. Journal Entry • Discuss the bias in the video clip by providing examples. • Do you agree or disagree with the producer? Explain your reasoning

8. Stop and reflect-journal entry • After we have gone through the discussion, record the following • How does supply side economics differ from demand side economics? • Which theory do you support more? Why?

9. Neo-conservative reaction • Like modern liberals, there are many ways to define a neo-con. • Most common characteristic: • Reaction to liberal principles that had “gone too far” • Civil rights movement leads to affirmative action • Weakness of using diplomacy in dealing with enemies (détente efforts in Cold War) • Increasing debts and abuse of tax dollars by liberal programs like health care • Failure of public education • Lack of morality in society by focusing on individual rights, or allowing faith based tribunals like Sharia law

10. USA in the 1970s • Growing government debt • High levels of taxation • Increased costs to business due to higher wages, benefits and working conditions (unions), and government regulations (like minimum wage and environmental laws) • Increased cost of living (especially after 1973 OPEC embargo) = inflation (due to government spending and high cost of managing debt) and unemployment (due to economy that provided few incentives for investment)

12. A trillion dollars (see the little guy beside it?!) – these are $100, not $1 bills.

13. Supply Side Economics • Neo-conservative response to spiraling debts caused by deficit financing. • Canada’s debt by 2000 over $500 B • Focus - increase supply by reducing taxes/gov. intervention in the economy: privatization and deregulation • As more goods are produced, employment will increase and so will the demand for goods and services. • believes demand will come from increased supply as the incentive to invest in the economy will stimulate production (indirect involvement) – coffee drip

14. Chicago School – Friedrich von Hayek • Believed that government intervention in the economy was first step towards totalitarianism • Pure free-market principles were the best way to encourage economic growth • Opposed demand-side economics • Demand side felt the government would give money to the people to spur the economy • Supply side felt that the government should let people keep their money to invest in the economy

15. Milton Freidman • economic systems have “leakages” that cause the extremes in the business cycle by limiting demand • “leakages” - individual income saved in banks, income lost to taxes, monies spent on imported goods • These can be balanced with “injections” • “injections” - businesses borrowing for investment, government spending, exports • Keynes (demand-side) wanted gov. to increase injections (fiscal policy) – Friedman felt government should prevent the leakages (monetary policy) • felt changes in the business cycle were due to inept politicians mismanaging the stock of money • government should be limited to protecting property rights, printing money, and maintaining law and order

16. Friedman

17. Friedman, part two

18. “Trickle-down Economics” “Reaganomics” “Thatcherism” (Klein in Alberta) • Stagflation (USA) – while fiscal and monetary policy worked in the 1960s, it was not working in the 1970s. • 1980 - Ronald Reagan elected on platform of decreasing government involvement in economy to reduce national debt • cut government regulations, social program spending and income taxes (corporate and personal) to encourage production (although he did not cut military spending). • Initially this system worked, but in the end it left the economy with a greater debt (military spending)

19. Reagan on Reaganomics • http://www.youtube.com/watch?v=ZzVGefEo2yU&feature=related

22. Stop and reflect-journal entry • How does supply side economics differ from demand side economics? • Which theory do you support more? Why?

23. An argument against it - Buffet