False Dawn

False Dawn

Chapter 1: From the Great Transformation to the global free market

1. What is the “Great Transformation”?

The “Great Transformation” started with the Industrial Revolution. Before the Industrial Revolution the economy of the UK was agricultural. Farmers were very important. The Industrial Revolution (1835) changed the economy life of the UK and other countries in Europe for ever. Transportation of goods and food had become much faster thanks to new railways. The “Great Transformation” is not only a transformation of the economy in general but also a transformation of the markets. The social market (local farmers) changed into a free market that we still recognize now.

2. What is “Laissez-faire”?

The Regime of “Laissez-faire” is the capitalism by companies (ex: Volkswagen). Laissez-faire= free market

3. Who is Adam Smith?

Adam Smith was a Scottish philosopher and a political economist. He was one of the key figures of the intellectual movement known as the Enlightenment. The Age of Enlightenment refers to the eighteenth century in European and American philosophy. It can more narrowly refer to the historical intellectual movement, which advocated reason as the primary basis of authority. Smith's work helped to create the modern academic discipline of economics and provided one of the best-known intellectual rationales for free trade and capitalism. In the “Wealth of Nations” Smith claims that self-interest alone (in a proper institutional setting) can lead to socially beneficial results.

4. Who is John Keynes?

John Maynard Keynes was a British economist whose ideas had a major impact on modern economic and political theory as well as on many governments' fiscal policies. He is particularly remembered for advocating interventionist government policy, by which the government would use fiscal and monetary measures to mitigate the adverse effects of economic recessions, depressions and booms. Economists consider him one of the main founders of modern theoretical macroeconomics. Keynes' theories were so influential, even when disputed, that a subfield of Macroeconomics called Keynesian economics is further developing and discussing his theories and their applications

5. What are the cornlaws?

The Corn Laws (1815-1846) were import tariffs designed to support and protect British corn prices against competition from less expensive foreign-grain imports. The government stepped away of fixed prices. The debate over the Corn Laws split the Conservatives and liberals. The Conservatives had until then traditionally represented the landed interests, who greatly benefited from the agricultural protections offered by the Corn Law, with the laws enacted to keep prices high after the Napoleonic War amidst a growing fear of a substantial drop in corn prices. The liberals, as the representatives of the business and industrial interests, believed a decrease in the price of grain would allow general food prices to fall, allowing business owners to in turn lower costs (including wages), and increase profits. Incomes of crops were reduced so the rich landowners suffered from it. Result: a greater poverty and a loss of political power. The middle-class is always the reason of a revolution because they take money of the poor and power of the rich. But there was no middle-class when the cornlaws were installed.

6. Explain the title:

“False Dawn” (valse dageraad) means a beginning of a new era: the era of a free market. But it is not so beautiful as it seems…You will get it back. "False Dawn" takes you on a world tour of the social devastation being left in capitalism's wake.

Chapter 2: Engineering free markets

1. Explain the difference between a free market and globalization:

Globalization started in the 15th century with Queen Elizabeth the First and is still going on now. John Gray stated that globalization can not be stopped because it is only an evolution of technology. A world wide free market on the other side was created by governments during the Industrial Revolution (1835) and was of course a result of the Enlightenment (capitalism). The free market is a political based mechanism. John Gray is afraid of globalization but he is not against it. He is against a world wide free market.

2. Explain the “Thatcherite experiment”:

Ronald Reagan was the president of the USA and a good friend of Margaret Thatcher who wanted to stimulate the economy…but she did it in a wrong way. She destructed the English society. The first contradiction of Thatcher is the fact that she weakened traditional social institutions (family, trade unions,…) when on the same time the divorce rates raised. The free market is splitting up families because it needs flexibility and it brings stress to the families. The second contradiction is that she weakened the base who voted for her because she was a conservative. The last contradiction is that Thatcher wanted to downsize the government but she made the government of the UK stronger and very powerful. What is the solution? John Gray stated that women must stay home to look after their children and family, but this is no longer possible! People have to take 2 or 3 jobs in order to pay everything.

Chapter 3: What globalization is not

1. Who is Joseph Shumpeter?

Joseph Schumpeter was an economist from Austria and an influential political scientist. Schumpeter thinks that the success of capitalism will lead to a form of corporatism and a fostering of values that are hostile to capitalism, especially among intellectuals. The intellectual and social climate needed to allow entrepreneurship to thrive will not exist in advanced capitalism; it will be replaced by socialism in some form. There will not be a revolution, but merely a trend in parliaments to elect social democratic parties of one stripe or another. He argued that capitalism will collapse from within as democratic majorities vote for the creation of a welfare state and place restrictions upon entrepreneurship that will burden and destroy the capitalist structure. Schumpeter emphasizes that