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The ‘puzzle’ is the reason why humans have adapted to rely on one another, as rival members of the same species, for so many aspects of their lives. Where most species have evolved to rely this much on other species, humans are unique in that they have developed a social structure where they must both compete with and rely on one another. Seabright suggests that the ‘solution’ to the puzzle is the fact that people were pre-adapted to such behaviour because of their instinctual family social structure; the moves toward agriculture and further industry cemented this natural instinct and made it inevitable that thousands of people would come together in cities and expand their social structures.2. Since children are much more likely to bear genetic mutations that are negative than those that are positive, children are more likely to be slightly less intelligent than their parents. If these children survive to reproduce, however, then their genes are strong and therefore they are likely to be more intelligent than their grandparents due to the slow advancement of biological evolution.
3. Total Product: an economy’s total goods and services for a specific periodNet Product: the surplus product minus necessary consumptionNecessary Product: the portion of the total product needed to maintain the means of production as it isSurplus Product: total portion minus necessary productIn a capitalist system, surplus product is earned by company owners while the worker’s wages (necessary product) are deducted from the total product. The leftover money is the net product.4. When the surplus product is controlled by one social class over those that have actually labored to earn it, the main issue often becomes the fact that the controlling class actually consumes more product than other classes.
Because of this, the controlling class will decide how to invest and spend the earnings and thus dictate the movements of the economy. Laborers will be subject to these economical movements and therefore must rely on their ability to continue on as laborers; they will earn less of the product and therefore are only able to spend a low percentage of it and with the lowest percentage of investment lower classes remain unable to make major changes in the economic system.5. Efficiency in political economy refers to the ability of the political system to work with minimum input and maximum output; essentially this means that the easier the system is for those working within it, the more efficient that system is.
While two distribution systems are commonly seen as less efficient, this does not always mean that single distribution systems are more so. Often this is the case because single distribution means less administration and related annoyances; however efficiency can also be gained from two-distribution political systems.6. The main characteristic of capitalism is that it is an economic system based mainly on privately owned businesses run primarily for profit. The ideal model of capitalism is such that its businesses run in competition with one another for the betterment of product and service and the effective lowering of prices.
Ideally this model benefits the consumer and the business owner. Capitalism differs from slavery mainly because it relies on laborers that must be paid; it differs from self-employment again because of the reliance on laborers. Capitalism is related to a market economy because in the latter producers and sellers are given free choice over those products and services they will provide; it is also directly related to the political democratic system because both are considered essentially free and subject to the whims of the people at large.7.‘Income refers to the wages a person brings home or the profits they make from owning or running a business; ‘wealth’ refers to the total value of all a person’s possessions, minus debts.
8. In political economy, ‘middle class’ refers to the largest class of society, consisting of people who are economically free and independent, but who do not have a particularly low or high income or amount of wealth. The popular conception of the middle class is that it is indeed self-reliant in terms of making a living and meeting their basic needs but such people are unable to influence society on the whole or change their environment. The middle class has grown over the last two hundred years because of social systems that have allowed previously poverty-stricken people to hold steady jobs and become independent, where before entire classes of people were slaves and peasantry whose daily labors were directed to the taxes of monarchs and other rulers.9. Theorizing that the fundamental relationship in capitalist systems is the extraction of work from the workers was not the primary focus of Adam Smith when outlining its characteristics; nevertheless this has become true of modern capitalism.
Without the workers, capitalism today would not function properly because products would not be made, services would not be rendered and above all, profits would not be made. Since it is the primary concern of capitalists to turn a profit, extracting work from the workers does become an essential part of the practice. Capitalists will claim that the exchange of labor in the labor market is a voluntary act; the fact remains that without that ‘voluntary’ action, millions of people would be out of work and unable to support themselves and their families.10. Capitalism and self-employment are similar in their primary focus of profit; they are different in the ways they achieve this. Capitalism encompasses many different businesses who compete with one another, employ laborers and service-workers and pay wages; self-employment refers to the creation of a business or trade for oneself in which payment comes directly from clients and customers instead of through another business owner.
Self-employed people are not paid wages but must rely on their own business interactions to bring in money for each product sold or service performed. Self-employed people must deduct government taxes from their profits while wage workers in a capitalist business will have this done for them before being issued with a paycheck. Numbers of self-employed people are rising in the United States because of a gradual increase in middle-class wealth, thus giving people the monetary freedom to set up businesses for themselves and cut out the costs of middle-men.11.
Rawls’ principles of justice are as follows: “each person is to have an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others” and “social and economic inequalities are to be arranged so that offices and positions must be open to everyone under conditions of fair equality of opportunity [and] they are to be of the greatest benefit to the least-advantaged members of society. The first principle is such because it outlines that basic right of each and every individual to be granted basic liberties; the second is such because it relates to existing social inequalities that can only be addressed when primary individual liberties have already been granted in a society.12. The ‘original position’ theory presented by Rawls is a form of social contract created on the assumption that the principles of justice must be decided behind what he calls a ‘veil of ignorance’. Rawls believes that only from an ignorant position, whereby no individual can know the outcome of his or her decisions concerning a fair society, can people promote a truly fair and un-classes social system. The theory has great merit, however its one and significant flaw is that everyone in any society does have some idea of their place, their standing and their status in relation to all others; the original position is therefore unattainable.
13. Rawls’ Difference Principle refers to his belief that the economic inequalities in any society must be rearranged to benefit most those who are the most in need. This stands in contrast to other principles of distribution because of its overcompensation to the poor and needy; most ideal systems call for an egalitarian distribution method so that everyone has all that they need for survival.
