Market Economy: Crash Course Government and Politics #46
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- Опубліковано 14 жов 2024
- Today, we’re going to take a look at how the government plays a role in the economy. Specifically, the way the government creates and maintains our market economic system. Now sure, the government’s role in the economy can be controversial, some may even say completely unnecessary. But there are some deficiencies in a free market, and we’re going to look at those, and the tools the government uses to combat those issues in maintaining a healthy and stable economy.
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The Crash Course series has saved millions of high school AP students the night before the AP Test. Praise be to Crash Course.
Adam DiRocco and college students for finals
Yes
Two economists are stranded on a desert island. One month later they've each made a million dollars by trading their hats back and forth.
good joke, but where did they get the million dollars from?
+MIC2077 sand dollars
+benmac2112 that's offensive.
+MIC2077 fiat currency
Sam Barkley?
1:40 So when do we get Crash Course Political Philosophy?
In the year "...Seveñi-seven"
Stephen Morris here now
I feel like this did so much better giving a basic explanation of economics than the actual Crash Course show ever has.
I find it interesting how this video would be taken in very different ways by people in different countries. For example, the proposition that government is important in the economy is much less controversial to a Western European audience - the only significant argument there would be one of degree.
For a Chinese audience, that may go even further, with a large level of government involvement in the economy viewed as essential for prosperity.
For an audience from some sub-saharan African countries, I imagine this message is met either with a derision or remorse, given that corruption and political instability occurs there on a scale in just doesn't in the US or Western Europe.
For a country governed under Shari-ah, the intertwining of law, religion and government seems like it alters some aspects of the debate entirely.
The mental link between free market economics and personal freedom, as well as the ideological emphasis on freedom itself, is a something particularly pronounced in the US for cultural reasons. Hearing how much less individualistic cultures, like that of Japan for instance, react to the same ideas would be interesting.
What about bitcoin? Who governs that? That is certainly an independant market without a government.
YES CRYPTO CURE+RENCY IS THE FUTEURER
This aged well...
"Markets can't exist without government". Ya tell that to the black market.
+Luke g Its like light and shadow. The black market needs a legal market to parasite off of. Most illegal drugs are such good money makers because they cant be legally obtained. But legalize them and the price drops then its not cost effective to go through the headaches to sell em.
@@normanofthetempest7347 , all you have stated is true, which leads to the next logical conclusion that if something is made legal, then it isn't worth the hassle to form gangs and produce violence to get or maintain a monopoly on an illegal substance. Less things made illegal, the less dangerous they become ( though their inherent danger would not be affected by the economic system it finds itself in). Case in point: 1920's prohibition in the U.S.A. Alcohol is much more dangerous when it is illegal. This was fun, thanks. Yes to stopping force and fraud. No to stopping anything else.
In my bus sleeping and just playing this as an audio helped me revise a whole subtopic. Crash course is seriously the best.
Imagine genuinely believing the government and economy are opposed to one another
"The freer the market the freer the people"
Also I liked that lost reference
hey but you have a channel dedicated to economy why is this not a crossover episode
+ashley beaumont They had Cartoon Adrienne and Aaron waving there in the corner! What more do you want?
Adrienne and Aaron dooing this episode
+ashley beaumont because this is focused on the USA economy, not in economy on abstract.
+Zenn Exile I like it.
+Zenn Exile its not trash its good because its focused on economy but john green is not the one doing it :(
I only came here because i saw walter white and jesse in the thumbnail
+Abdo Shawki saaameee
SAME!!!!!
+Abdo Shawki Me too!
Look out! It's another logical, unbiased, and realistic video about the merits of government in a market!
"But history has shown that corporations, individuals, AND EVEN GOVERNMENT have often tried to stifle competition and create monopolies." FIFY.
+J.D. Montgomery People don't like sharing.
+J.D. Montgomery Looking at you ABC liquor monopoly..
+J.D. Montgomery So what? It's possible that both could occur. The fact of the matter is, we need government.
It's like saying, 'History has shown that oxygen creates forest fires.', even though we need oxygen.
No Free Will Except we don't create and control oxygen, like government. You ignore the obvious point,which is that the government makes and enforces monopolies, and monopolies are bad. But from that you get the question of how to keep governments from abusing its rights and fucking the people, because we the people supposedly have some say in that.
+chickenmonger123 Of course the government creates and enforces monopolies - where it makes sense. The most glaring examples are infrastructure and the military. Are you trying to say that you need a free-market in infrastructure creation or for the armed forces? If you mean to say that the government creates and enforces monopolies in industry or ressource acquisition (like oil or mining), then what you're actually seeing in the US is government failing to prevent the creation and enforcement of monopolies!
Question .... how was agriculture affected by the expansion of a market economy?
My uni said i have to watch this again. So if i must watch Crash Course for school, then i must.
Thanks for the help on my economics homework. 🤙🏼
Great video Craigers!
Breaking Bad on Crash Course History. Never thought id see the day.
I always felt that Owning was just a fancy word for "leasing from the government". Sure, it's yours. But if the government needs your land, they'll write you a check and boot you out. Countries may vary.
1.The market for law and order is monopolized without individual consent; if you could chose not to finance the State protection and war agencies and instead pay a competitor this would create a market for these services; the division of labor says the quality of the good/service will go up and the price will go down if market are allowed to function.
2.Voluntary exchanges of private property titles are not in need of a third party to dictate rules unless they have both consented to hire such a figure.
3.Individual consumers can set their own market standards, as well as, use the services of a private consumer rating agencies.
4."Public" goods are goods financed by extortion, it doesn't mean a rocket to the moon and hoover damn aren't cool, it means that money was taken by threats of force without consent.
5. capitalists(savers), entrepreneurs, the production process, consumer demand, and the laborers themselves create the labor force, not the government.
6. Funny how you can't get an injunction against the State roads and highways systems for their car pollution that trespasses and pollutes your body and your property.
7. The government does not promote competition, it does the opposite and relentlessly forms monopolies through the legislative and regulatory process.
You guys are doing an amazing job! however u could add a written summary of the video like a document study guide thing. That would help a lot of people who have problems in following the video.
Well, technically you can have a form of economy even without a government through trading I assume, but governments are far more efficient economies because they use currency. A Currency system is more effective than trading because you are often able to obtain find what you want at a price beneficial or fair to the consumer, because the set prices are being set by many people competitively to sell you what you want which puts the consumer in a position of power. The economy suffers when the consumers are not in a position of power or are unable to generate enough disposable income.
"Economic system that we know and love"
"know and love"
"love"
No.
5:40. As an Australian aviation enthusiast, I note that the US government is in fact looking into privatising some or all the US air traffic control system, which has most of the US aviation industry very nervous.
I know I'm a bit late to the party, but for the honour of Friedmanites everywhere, a rebuttal of Craig's eight points seems called for.
1. Law and order can be provided privately; a system of private protection agencies, private courts and insurance companies produces a stable and peaceful society in which no institution or organisation has a monopoly on the licit use of force. And those objections you've just thought of? They've been answered; read The Machinery of Freedom.
2. The rules of property in the anarchic system are defined by the (private) courts, and the rules those courts define are a major part of their value proposition to customers. Consequently, good law (which is a public good under the current system, thus underproduced) becomes a private good, produced efficiently. Moreover, the initial allocation of property rights (by which I mean, the definition of what rights are included in the bundle known as 'property') turns out not to matter directly, because those rights can be separately traded and (like any good) will end up wherever they are most valued. Instead, the aim when defining property rights is to _minimise the transaction costs_ involved in getting them to that most-valued use; the reason for this will become clear when I get to Coase's Theorem.
3. To even think that "governing rules of exchange" is a good thing, you have to already be stuck in a statist mindset: if you don't arrive with the assumption that governments are necessary and free market R bad, then freedom of contract is obviously preferable to any restrictions thereof: a contract is only signed if both parties believe it benefits them, while any negative effects on third parties (e.g. hiring an assassin) should be handled, not by outlawing the contract, but by outlawing its performance (or, more precisely, by making the act a tort; I'll get on to the importance of tort later).
4. Market standards are something that free markets manage to set all by themselves. The classic example is Underwriters' Laboratories, but there are many others. If standardisation of a product, weight, measure, service, or even currency(!) is something of value to consumers, then producers will find a way to standardise it, because the increased demand that drives will in turn raise their profits.
5. Public goods generally turn out to be easy to make private. This is why, for instance, national post offices generally have laws prohibiting competition: the things that supposedly no entrepreneur could do at a profit turn out to be doable at a lower price than the government can manage, even when the government operation is subsidised by taxes or borrowing. The public good argument essentially underestimates the innovative capacity of free markets: just because one theorist or bureaucrat can't see a way to sell something profitably, doesn't mean there can't be someone out there who finds a way - and it only takes one. Oh, and since Craig mentions air travel, I should probably bring up the history of US airline regulation, and how the (regulated) interstate carriers charged twice the fares of the (intrastate, hence unregulated) PSA - because the regulator set minimum fares, thereby maintaining a cartelisation of the regulated airlines.
6. I would have thought anyone based in the US, of all places, would know _just how bad_ governments are at schooling. In any case, the demonstrated success of private schools - some of which manage to charge high prices despite competing with a free product - shows that, once again, private enterprise is just better at doing stuff than government agencies are. Then there's the fact that the political content of state education is likely to be, shall we say, not entirely unbiased. And to top it all off, Crash Course is _itself_ an example of the free market outperforming government - think of all the commenters who have (rightly) said that CC is way better than the classes they get at school.
7. Ahh, externalities, the last refuge of the statist scoundrel. There are two prongs to the anarchist's solution here; one is the tort system. Imposing an externality on someone is a tort, and that tort can be litigated. (Remember that, as I explained above, law and courts would still exist in this system; anarchy is not chaos.) Of course, a small tort against a large number of people (e.g. pollution) is hard to litigate under the present system (class action suits suck); but this is easily solved by making a tort claim _a piece of transferable property_. The other prong is Coase's Theorem, a mathematical result showing that, given low enough transaction costs, all externalities can be internalised (transformed into contractual arrangements between the affected parties). This is why I said earlier that reducing transaction costs is the proper objective of property law. The Coasian analysis of externalities shows that previous solutions like Pigouvian taxation are not only unnecessary but actively harmful, because sometimes (for instance) the polluter is not the lowest-cost avoider, so it's more efficient to pay the affected people to move somewhere else than it is to stop polluting. In short, Coase shows that many of our intuitions about 'justice' and 'fairness' simply don't work when applied to externality problems.
8. Monopolies and cartels are frequently creatures of government fiat or regulation (see also: Regulatory Capture), and only very rarely do they manage to arise in a free market environment. Moreover, a regulatory monopoly tends to last a long time, whereas a "natural monopoly" will, if it makes monopoly profits, create an incentive for technological or social changes that disrupt the monopoly by reducing economies of scale; the half-life of monopolies that fail to get their industry regulated is far, far shorter than that of those that succeed in doing so. As so often in free market economics, the cure for a high price is a high price. The really funny (or sad) part is that anti-trust laws are actually one of the tools governments use to regulate and cartelise industries. For instance, the FCC, who will proudly boast of how the "breakup of the Bell System" busted AT&T's monopoly, is directly responsible for the US's current cell carrier oligarchy. And as for the Commerce Clause... since 1937, the SCOTUS has been only too willing to define more or less anything as "interstate commerce" in order to permit Congress to regulate it, including _growing corn to feed your own hogs_ (on the theory that you _could_ have sold that corn across state lines!)
tl;dr: there are NO proper functions of government, and we really aren't getting anything in return for the huge deadweight costs it imposes upon us. _Every item_ in Craig's apologia for market regulation is wrong.
Showing what the state does isn't the same as showing that it's functions aren't neither unnecessary or replaceable via the market/voluntary association. Not to mention that the economy works internationally already- ie without a universal authority.
you should go through the mixed economic system since you used a market economy and a mixed economy is in a market economy.
Crash Course Political Philosophy? DO IT!!!
Do it in addition to the upcoming more generalized Philosophy series, too!
Interesting that it did not discuss the Federal Reserve and the government's monopoly on money production since money is half of most market transactions. Money manipulation has major effects throughout the economy.
Dan Coats errr federal reserve doesn't control the money supply. Milton Friedman and his buddies tried but they failed. And Banks do control the money supply, through their lending but not the federal reserve.
this market economy thing was started in England in the late 1700s when consumer goods were being mass produced.
Seems like I have too many questions that will probably be answered during 4 years while studying economics... Very good video though!
How to fix our budget
-cut unnecessary military spending
-huge stimulus packages
You spelled welfare wrong.
You only need to read about the horrible negatives of government created monopolies to see how dangerous governmental influence can be in a marketplace.
Damn you Cragers, making reasonable arguments for government again!
-anarchist
I appreciate the LOST reference.
I got so confused for a second when you said "John Lock"... My brain was like, "why you bringing up shipping? whaaaaaa? ... ... Oh. nm..."
This being UA-cam I shouldn't have to say "There are numerous pro-market anarchist intellectuals who have written extensively about how markets would function absent a state (government)" but I'm going to say it anyway just for the emotional satisfaction.
There are numerous pro-market anarchist intellectuals who have written extensively about how markets would function absent a state (government).
Yeah, that's nice.
"if there unregulated markets there wouldn't be affordable flights to small cities." The premise of this argument is that a regulated market can provide a better service than an unregulated market can. That certainly has not been the case with the airline industry. They deregulated the market economist found that CAB market regulations 90% of the time kept prices higher. Deregulation of airlines has increase the number of people flying and a lot of low cost carriers and ultra low cost carriers are flying to smaller and smaller cities. Aliegient and Spirit Airlines are flying to a lot of tiny Midwestern towns.
First of in a regulated market you're assuming that flights to small cities will lose money and that we therefore need regulations to prevent that from happening. The problem with that is "affordable flights" are not free they come from higher fares in other lines. So you have cities that are subsidizing other cities which is a problem of fairness. If the flights are regulated that is a choice of political will and who gets the flights.
+David Williams It's not about regulation; it's about subsidising (subsidising, for instance, electricity to rural areas, or having the government do it itself).
Sideeq Mohammad How small of a town is worthy of subsidies? Should the government subsidize a airport in every town regardless of size? Absolutely not.
Also, competition is insufficient, when the fitness function has nothing truly to do with the actual function of the institution.
G'day Crash Course people.
I love these vids and am impressed by the careful road you usually take.
I do have to ask a question though:
Compulsory Education laws. You state that this is to try to ensure a level of competence that will enable them to be productive workers.
Aren't compulsory education laws supposed to be to ensure a level of competence that will enable them to be capable citizens?
For a second I thought this was a Eco episode and was about to skip it.
can you please do videos on Adam Smith's "wealth of nations"? i know books are kinda big....but summaries will do
Crash Course acknowledges the link between a Market Economy and the Government, and thus many people have their ignorant illusions challenged.
Property is not inalienable. It's only guaranteed by the exercise of power.
i love this chanel, it explains important stuff in such a cool manner, and the teachers are very cool too!
Im still waiting for someone to give me an example of a crash caused by Free Market economies.
It's highly ironic: Saying that the TVA's provision of electricity to rural areas is an example of government stepping in to provide "public goods". The TVA stole millions of acres of private property, displacing thousands of people, in order to provide this "good". Go Govt!!
Government is essential to a functioning market but it can go too far in certain aspects. However, mostly the US government doesn't go far enough like allowing Captive markets like cable and satellite companies where there is a choice between getting substandard service at a high market rate or being a cord cutter.
+CardsNHorns04 I agree, when big business and government work together instead of the government balancing the power of these corporations, we get companies so rich they become legally immune to prosecution through their hired team of lawyers and money passed to whoever openly or under the table. At times aspects of television seems less like a fair business model and more like a scam.
That's a state/local issue. Some areas *cough cough* treat cable as a "natural monopoly" because, you know, that makes sense.
+CardsNHorns04 Governement is useless.
+CardsNHorns04 Everything governments do markets do better. IF they are allowed to compete.
CardsNHorns04 there is a difference between quality of regulation and quantity
The words Crash and Market Economy go together well when you add the word government!
Of Course...
Found the ayncrap.
Це відео змінило мій світогляд. Те, що вільний ринок це система яка підтримується державою це важливо.
What? No Eagle punching this episode? I demand a refund! D:
#pooreagle
+Pythos Sapunov 3:13
eggory goddamnit.. it was so casual.. and he didnt skip a beat >_
3:12
you keep saying that the government provides X, Y and z. The government does not provide anything. "The government" only redistributes and restricts the exchange of goods and services by force.
There are alternatives for the state. Search for "The Machinery of Freedom". Book by David Friedman. There is also a video with the same name where he explain one possible alternative.
I'm glad someone else read that! I'd also suggest For a New Liberty by Murray Rothbard, quite possibly the best book in defense of anarcho-capitalism. There's no government like NO GOVERNMENT!
+The Young AnCap Anarchy is rather... untrustworthy.
No police to defend you, or Fire Dept.
+Jim Harper Who cares? Some violence and destruction here and there hasn't hurt anyone
+Jim Harper I respect your opinions, though I'd advise you to at least look up "anarcho-capitalism" and have an open mind. If you are even slightly untrusting of the large governments that have crushed freedom with their greed, truthfully, read "For A New Liberty" by Murray N. Rothbard. It will change your perception on government, and how services like police, fire, even roads, are not only better, but cheaper when supplied on the free market. You can find a free copy at www.mises.org/library/new-liberty-libertarian-manifesto if you're interested!
+Quinn Bailey You clearly haven't lived in an anarchy.
Interesting episode... but why he hates the eagle?
This guy should be one of my country's financial advisers
Haha, "Don't tell me what I can't do!"
Monopolies cannot be sustained without the laws that protect them (force). Once a good or service is sold, it can be understood and reproduced. Government stifles competition....
Regarding lead in gasoline, two things had to happen before govt regulated it: 1) People had to learn that it was bad, and 2) There had to be a demand for the change.
It pays to supply demand. Government force isn't the only option, and certainly not the primary cause of the positive change. Education/understanding was the necessary factor that created the demand to begin with.
I love your UA-cam Channel, your world history videos are the best. I was wondering if they were based on the Mcgraw Hill AP world history text book. If not you guys should work your UA-cam magic and make videos on each chapter as like a summary. Our whole class thought it would be awesome. It would be very helpful and. Thanks
I wonder if crash course will do politics of other countries?
Businesses are smart and creative. They will always try to create monopolies for themselves. Whether they do it through being extremely competitive and running their competitors out of business by winning over customers or by lobbying the government for special licenses and regulations that prevent others from entering their market.
The sad truth is the American government is owned by lobbyists. And as long as that's true no amount of government regulations will EVER touch them. Their lobbyists will always create loopholes, exemptions, and/or use the laws to increases market entry costs to competitors.
Every economy is a mixed economy.
Explain how the free market economy brought about the global spread of hyper-consumerism. Explain also its effects on the ff: the deteriorating state of our environment, socio-cultural values, political climate, and in the individual’s life satisfaction rate.
Pls answer my question for my hw tnx :
Xandra Parayno none of those things are because of the free market
TIL that people wouldn't be able to figure out how indirectly exchange with each other or achieve any sort of progress without government. More profound philosophical and economic analysis from Crash Course. /s.
Their "analysis" of economics makes me wonder how factual they really are with their analysis of astronomy and physics.
+Nick Tanzillo Thank you for opening my eyes, UA-cam commenter.
Teonod thanks for the sarcastic poke, also UA-cam commenter.
+Nick Tanzillo I guess they think Craigslist is fake
Did anyone else think this was a new CC: Economics video at first glance? I did.
I would argue that a market is a natural neutral state. The example you give of someone taking your shirt is a shift from that neutral free market state to a market skewed by force. In essence, the person with the power to take establishes government in the form of a might-makes-right dictatorship where your shirt is theirs. Social contract and government is a way to protect MOST members of a market from such actions and extreme cases.
Amongst other things, we learn from this video that Craig is a fan of Lost-
Sounds good, except under the common economic definition, public transit is NOT a public good. Public goods are goods which benefit everyone (no private ownership of the good), where one person's consumption of the good does not interfere with another person's. Basically, goods that you can't make people pay for through a market because of the free rider problem.
As someone who still lives in the country. It is still difficult to get Crash Course. 10-15 GB a month of data is just isn't enough to watch movies.
I LIKE THIS CHANNEL
Will there ever be a crash course philosophy?
The first episode is up now
favorite. favourite. all time fave-or-it. oh my fave, Becky. oh my.
"Usually the government tries to make the market more, rather than less, competitive?" Nonsense! The enforcement of patent and copyright monopolies more than counter balances all efforts ever taken to encourage competition.
Can you please do all of the economy series? You are not as jittery, patronizing or abnoxious as those two hosts.
3:12 It took so long it was distracting me. 4:19 ahhh its back! Seriously though, good video.
I really want to see a video solely about taxing negative externalities.
I fucking love CrashCourse.
Thanks
"The government creates the market system"...? BWAHAHAHAHA!
+George W Bush Not when you're in control of the government, then it does the opposite.
Market is allowed to exist because the government allows it to exist. Ah i love economics, always seem to forget about law and politics.
there should be a scene where the eagle punches craig
There is.
Something that pisses me off is when it is said that lead came out of gas because of lead in the atmosphere. That is not why. Lead was taken out of gasoline because it fouled catalytic converters that were put in cars to reduce carbon monoxide and hydrocarbons. It was a happy coincidence that lead in the atmosphere was reduced too.
But what about positive externalities? Doesn't the government promote them? Either by subsiding like with green energy or requiring like with vaccines?
what are the ways the government gives value to money?
whether or not consumers benefit more from a market economic system or a mixed economic system.? Help
Wait... public transportation isn´t public good. Customers can be excluded and their usage of the service decrease the ability to provide the service to others (not enough space in the vehicle etc.).
Surely, that intro was a reference to the movie Airplane!
I was just watching WW before clicking on this and was very confused to see him slide into view
Please do a video on the Barbary Slave Trade.
Doesn't trump have a written note written in all caps that's says, everything is PERFECT! Hard to argue with all caps.
Just checking - is your comment about Gravity and George Clooney an ad by any chance?!?
(and the Hamburgler, Law and Order, Breaking Bad, etc)?
Do a video on the Irish Brigade!
Can you please give me a good example for each of the eight ways that the government controls market economy
I have yet to see a video going in depth about Socialism. Please make one.
theyre should be crash course law although it might be similar to gov and politics
>goverment
>needed
WEW! Lad!
the anarchist would say that there is someone who could say it's not their lawn.
They're called Smith & Wesson.
3:51 the breaking bad :D
Excellent Talk but is seems you speak more quickly with each passing month.
We need government for the market economy, but the only thing it needs to (and should) provide is the police force and court system to protect that economy. No further intervention is needed.
Could you make a video about Greek gods and goddesses?