Think about the most important issues and make sure you can answer the following questions: Who? What? Where? When? Why? How? Identify and recognize the significance for the most important terms and...

1) There are, according to William Easterly, three major habits of thinking that have
historically shaped the debate about capitalism. Which are they? Identify and explain.
According to William Easterly the habits of thinking that have shaped the debate bout
capitalism, is the divide in the thinking and communication between the economists and non
economists on the concept of gains from trade.
1. the most important characteristic of capitalism is the evil associated with military
conquests, colonialization slavery, and predatory behavior of firms. Survival of fittest which
are like skeletons in the cupboard or necessary evils which have come from capitalism. The
survival of the fittest maxim was the only way to survive in the capitalistic trade. This is not
desirable and is against all human attributes of trade. Friedrich Engels wrote that “the
consequences of the factory system” were “oppression and toil for the many, riches and
wealth for the few”.
2. The concept of fairness of social norms likes equity in wealth distribution otherwise called
Pareto law where 5% of the people own 95% of the wealth and vice versa.
3. It is difficult to accept the fact that there is some invisible hand that defines outcomes of
trade and possession that is not manmade and the good or bad actions can only be the
outcome of a good or bad causative or agent. The invisible hand is the hand of wealth
creation and this is what designs the movement of wealth and causes distributive justice
which is not present in capitalism.
2) What is, according to William Easterly, the “overselling of globalization”?
The author has clearly illustrated overselling of globalization though the following figure
The author feels that globalization has made the difference between countries which have an
5 per capita growth and countries that have -1 per capita growth. Overselling of globalization
has bee seen as promises to reduce global poverty with policy reforms. The Washington
consensus spoke about greater globalization by creating more free markets. Globalization
has been marked by very extreme positive growth rates in the eastern economies especially
china and India. A review of growth rates shows that 1.7% of countries during the globalised
era have registered a 5% per capita growth rate. This is the excessive effect of globalization.
This further led to freedom of trade labour and capital movement across countries ,all
contributing itself to the removal of poverty by identifying scarcity and allowing factors to
come in.laboutr intensive exports allowed movement of unskilled labor through countries
and capita moved to poor countries though high investment to reduce the gap between the
rich h and poor countries..The positive effects of globalization is spoken about in such great
lengths that the side effects have been totally ignored. It has also been seen that every
country speaks of policy reforms and expansion into global markets without really
understanding the effects of such expansion .Where conservatism should have been the
secret dynamism at the cost of domestic disparities has resulted.
3) According to Thomas Friedman, in what kind of world will Lydia grow up? The...