Foundations of Business

Flashcard maker : Clarence Louder
According to Thoreau, why did he write Walden?
To tell his neighbors
Why does Thoreau believe \”the mass of men lead lives of quiet desperation\”?
living paycheck to paycheck. only have enough money to get by until the next paycheck. Because people live outside their means
What does Thoreau consider to be the \”gross necessaries\” of life? What is the effect on our lives of the pursuit of luxuries?
Food water shelter and fuel. If we purse luxuries, we will end up living outside our means.
Thoreau stated that he went to Walden Pond to do some business. He provided some examples of the jobs he undertook. Describe some of them.
Handy work, sold goods
What does Thoreau think should be the primary objective of working?
He says you should be doing what makes you satisfied with life.
Why does Thoreau think it is so important that we simplify our lives?
It will increase life satisfaction
What is troubling Wordsworth?
People are becoming materialist, we are drowning out nature
How is his view of the world similar to other thinkers of that time and place which we have read in this class?
He thinks like Thoreau in that he wants us to appreciate nature and live within our means. He thinks we should not be wasteful
What is the origin of the city or state?
\”a state comes into existence because no individual is self-sufficing\” We all need to rely on each other. Specialization and Division of Labor is important because it is efficient. Jack of all trade, master of none is not efficient. Efficiency = relationship between output and input. Minimum input maximum output.
What does Plato (Socrates) think of the retailer (shopkeeper)? Why does he express this view?
They are the weakest in the body. They are useless for any other task
Distinguish between the healthy (ideal) state and the fevered (suffering from inflammation) state. What is the relevance of the ring of invisibility to the two types of states? what does plato believe is necessary to avoid the fevered state?
Healthy would mean everyone decides they have enough and everyone lives simply, but people want luxury and delicacies, people always want more, so the country becomes too small to sustain people and they end up wanting their neighbors territory…war results
In what way might the story be analogous to business expansion and competition?
Today the war is between businesses. They are battling over market shares. They are trying to take away from their competitors
What is the dual nature of commodities as explained by Aristotle?
Everything has a proper use and an improper use
Aristotle also distinguishes between natural and unnatural business activity. What kind of business activity is \”unnatural\”? What troubled him about unnatural business activity?
Unnatural if used for luxuries. It troubled him because money’s purpose is not to be collected. People should have a limit; they shouldn’t collect money like there no limit.
Why does Aristotle consider usury the most hated sort of retail business?
Charging interest. It’s hated because it is using money to make more money
What does Aristotle say about monopolies?
They want to control the price. He views them negatively because he is a huge advocate for the division of labor and if one entity controlled all of one industry there would be no room for multiple people to work within it. Also, Aristotle believes that any income above what is necessary for household management is unnatural, and with a monopoly’s ability to control prices and bring in all the money from a given industry, they would have a lot more than would be necessary for household management.
Confucius is against government regulation but not all regulation. What type of regulation does he favor?
Self regulation. Moral regulation
Why is confucius against government regulation or interfence?
He says that its never a good thing because it hinders the companies production
what should be the basis of economics policy according to confucius?
self interest
What does confucius say about the relationship between productions and consumption?
If production is not greater than consumption, there will be no growth.
What would be the the inevitable consequence of laissez-faire policy with regard to the distribution of wealth? Find the reference to the \”trickle-down\” theory.
He feels that the rich will provide employment for the poor
How does confucius feel about inequality in the distribution of wealth?
he hates it
Who is speaking in the excerpt and to whom is he responding?
Francisco D’Anconia, a creator of wealth. Responding is James Taggart, corporate executive (scene at a party)
Who are the looters and moochers? what distinguishes the looters and moochers from the capitalists? Why does Rand have such praise for the capitalists?
Corporate executives/government are looters and moochers who steal the wealth from those that created it. The looters and moochers don’t create the money, they just take it. The capitalists create the money. Rand has praise for the capitalists because she feels that \”the rest of us\” are beneficiaries of capitalism, victims of the looters and moochers
Explain why, for Rand, money holds the essence of morality?
Explain the dual nature of commodities
proper use makes a commodity a use value. Improper use corresponds to exchange value
What does Marx believe determines the \”exchanges value\” of commodities?
It is the function of units of human labor
Explain the labor theory of value
Value of a commodity is only related to the labor needed to produce or obtain that commodity and not to other factors of production. The more work that goes into it the more it should be worth.
what are three reasons why we read?
to pass time, for fun, to learn and become expert in a subject
what is the purpose of study
to become learned
how does thoreau regard the written word compared to other art forms
he says books are the work of art nearest to life itself because it can be literally breathed from all human lips and translated to any language
what is thoreaus attitude toward what material is worth reading
He says the classics and books that make you more learned are the only ones worth reading. He says the other ones (pleasure reads) are pointless and a waste of time.
What does Thoreau suggest about learning as we leave school and become
working adults?
he suggest to keep reading and keep becoming more and more learned
what is the function of the university
To develop a well-rounded individual. It should be about culture, diversity, acceptance, and joining together to create a better future for everyone.
why was Dubois concerned about the rebuilding of the post-civil war south?
because the south didnt have a foundation yet. the people needed to come together first before they could rebuild
why does columbus undertake his journey? why are the monarchs of spain willing to finance it?
he is going to find gold he wanted to keep his job. the monarchs financed it because there was economic turmoil in spain and they were desperate
looking at the journey as a business venture, what role does each of the characters play?
king and queen -investors
columbus-ceo
spanish soldiers-employees
natives-customers
how does columbus \”manage\” his employees, his customers and his investors?
He was good at both managing up and managing down. He was able to make the king and queen see his vision and finance several trips. He was good at getting what he wanted
why does columbus portray the journey as a quest for profits?
because that is what the king and queen wanted, and they are his investors
what distinguishes private property from common property?
the human labor and effort that goes into it
under what conditions does Locke object to the claim of private ownership of property?
when you take more than what you need and if you waste
what role does money play?
medium of exchange. money doesn’t rot or waste, so it can be used at a later time for trade
faust has already agreed that the devil can have his soul when he dies if the devil helps him to gain what he desires. what does faust desire?
He desires to control the ocean. He wants to move the ocean back and develop the land underneath.
what does faust appear to be doing in the first scene? why does mephistopheles interrupt him
he is sitting on top of a mountain daydreaming, remembering what it was like to be in love and wishing for that feeling back
what is fausts business? what is his vision? how does mephistopheles help him to achieve it?
Real Estate. His vision is to push the ocean back and develop the land beneath it. Mephistopheles helps him by telling Faust what he needs to do to make it happen. He also takes care of winning the war for Faust.
why does goethe include baucis and philemon in the play?
to teach about raison d’etre (reason to be) and human suffering
why does goethe only allow care to enter fausts home? why does she blind him? what is fausts response to being blinded?
To show that Faust doesn’t care about the results of his actions. He doesn’t care what happens to other people, he is only concerned about himself. Care says that people live like they are blind, he is living like he is blind, so she literally blinds him. This should have been a wake up call for him, but it wasn’t. He didn’t stop with his vision
what perspective does goethe provide us on the modern capitalist through his character faust?
he never satisfied. he can never be satisfied. he keeps growing and growing. there are negative consequences
why is faust saved from mephistopheles at the end of the play?
his intent was to make the world a better place. even though there were immoral and unfortunate consequences, he was forgiven. (capitalism: making the better world in one way, but there are negative consequences)
distinguish between political economy and mercantile economy
political economy- economy of a nation mercantile- economy and wealth of an individual
according to ruskin, in the mercantile sense what is required to be rich?
you must have power over others
what is really meant by riches?
men are rich because they have power over others and they exercise it
what does ruskin say about inequality of wealth?
each has what they need to survive but debt exists
ruskin provides two stories in which wealth becomes unequally distributed. what is the purpose of these stories? what lesson is he trying to teach through these stories?
The purpose was to teach about people executing power over others. The lesson they were trying to teach was healthy men become rich because they have power over ill men. Political economy suffered. The wealth of a nation depends on their morals, wealth depends on the treatment of those who created it, true wealth is in the men who create it
how should wealth be measured?
by your happiness
what was the geographic composition of society in medieval europe?
towns that has bondaries separating them from others. everyone was tightly packed together
what was the economic dilemma facing the catholic church during this period?
they were concerned about the increasing wealth in the middle class, particularly the traders. it threatened the stability of society
who were the schoolmen?
church intellectuals who wrote church doctrine, including economic doctrine. thomas aquinas
what is the functional view of class organization
society is like the human body, each member must perfom its function. repessive and expressive. upper class you’re allowed to be rich, middle class moderately wealthy, and peasants are poor and expected to have less
what is the primary business of life according to catholic doctrine? what role does economics play?
it was right to earn a livelihood consistent with your station in life. anything more is greedy
what limitations did church doctrine place on economic activity
you can only earn profits that are equal to the amount of work you put into it
how did church doctrine re-characterize the profits of the trader
profits are considered a type of wage
why does tawney call marx the last fo the schoolmen? why is this ironic?
Because they were both worried about the profits of the traders. They both said that exchange value of something should be based on how much labor went into it.
in what way was the protestant view of wealth the same as the catholic view? in what way was in different?
They are both concerned that when people have wealth they will be drawn away from the real business of life—salvation. They will be too distracted and tempted by material things. The Protestants say greed is not the deadliest of sins. The money isn’t the problem, it’s the people
what is the deadliest of sins according tot he protestant?
wasting time. even the rich should work. everyone has a calling
what is the protestants view of work? what is a calling?
Activity serves to increase one’s glory of God. A \”calling\” is a skill or ability given by God and our task in order to be righteous is to peruse it as vigorously as we can
how is the protestant supposed to respond to his calling?
everyone should work hard in their calling. they must obey
how should the protestant view his wealth?
Wealth is bad ethically, and he should be making as much wealth as he can for the greater good of society. He should live a comfortable life and reinvest the other wealth. Man is nothing more than a trustee of his wealth.
what implications does the protestants view of his calling and his responsibility toward his wealth have for the capitalist system?
reinvesting. keep generating more wealth. limitation of consumption and commandment to work
what does weber believe is the consequence for modern participants in the capitalist system? why does he say that fate decreed that the cloak should become an iron cage?
we were born into the modern economic order and feel like animals in a cage. an animal in a cage spends most of its waking hours trying to figure out how to get out. So we feel that in order to live a comfortable life is to have greater wealth. The only way we can escape is to get more money. How do I make more money? How do I get a better job?
what does carnegie identify as the positive and negative consequences of unequal distribution of wealth?
he says the highest form of distribution is to give people jobs
what are the underlying principles of the economic prosperity of our age?
individualism, competition, law of accumulation of wealth, private property
what is the alternative to these principles, and what will be the consequences?
communism is the alternative, and that has been tried and failed
what are the three modes of dispositon of wealth which carnegie identified? why does carnegie believe that the third is the best?
Leave it to your family (rejected), Bequeath it (leave it in your will) (rejected), give it away while you are alive (recommended). He says if you hoard it til you die you are selfish because it’s as if you didn’t want to give it away at all
what does carnegie say about estate taxes? what is the situation which leads him to this view?
He actually likes the British Parliament’s decision to use a graduated tax system. The richer you are, the more you get taxed. He loves the estate tax because it punishes people who are unwilling to give it back to the society. Obligation to give back
compare carnegies views on the responsibilites of the man of wealth to the protestant ethic as described by weber
It’s basically the same. Protestants believe it is God’s money and you must give it back. Carnegie also believes that you must give it back. Hoarding of wealth is bad
how does heilbroner view the modern stockholder of a public company?
The owners of the company, a diverse and constantly changing mix of individuals. Views them as passive and gamblers
list stakeholders in modern corporations other than the stockholder. what point does heilbroner make about the responsibilities of corporate managers to these other stakeholders?
Management, Employees, Community. The managers must consider all of the interests of all the stakeholders
why does gordon gecko say that greed is good?
greed is good because it forces companies who are not efficient to shut down and it causes progress
what is geckos objective in his speech to the stockholders of teldar paper?
His speech is that the CEO’s are getting paid higher wages even though the company is going under. His speech is to make them want to sell their stocks in teldar paper because the company is going to fail

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