Honors in Action Possible Projects Theme 3: Too Big to Fail Competition and Economics How does competition shape economics?

1. Econ HIA Subjects
Dylan Gunderson

2. 2. What is the role of Labor
Unions in a competitive
business market.
• As large scale businesses employing
unskilled labor grew at the beginning
of the 20th century, representation for
the worker was cast aside.
• In the Employer-Employee
relationship, the employer holds all
the cards, but by coming together, the
employee force has enough clout to
make its voice heard.

3. Pros and Cons in a modern
Economy
 Unions have made huge gains for the
American workforce, but they were set
up for a corporatist economic structure
that doesn’t exist anymore.
 In the new economy, the central focus
is entirely on efficiency and profit,
competitiveness.
 Outsourcing is just one example of
ways that Union gains may actually be
hindrances in the end.

4. Possible Actions
 Research local union history and
statistics of membership over the past
several decades.
 Interview local Union leaders,
Business leaders, and other key
figures as to the way that Unions
either help or hurt competition in a
modern economy.

5.  http://www.investopedia.com/articles/e
conomics/09/unions-
workers.asp#axzz1wu5HnklF
 http://www.law.upenn.edu/journals/law
review/articles/volume155/issue3/Wac
hter155U.Pa.L.Rev.581(2007).pdf

6. 7. What should be the
Governments role in ensuring
fair economic competition?
 Even in a capitalist economy, there is
not only room for government
intervention, it is a necessity in some
cases.
 Though the idea of a free market
economy is that Government should
have no roll in it whatsoever, and that
the “free market” should regulate itself,
it fails to do this frequently.

7. Cont.
 In theory, free market pressures
constitute a race to the top, better items
getting the audience they want and lower
quality ones getting ignored, but in reality
its just the opposite.
 Buyers are motivated more by the price
of the items than quality, so the main
deciding factor is how cheaply something
can be made (and therefore sold), and if
that happens to involve them being
unsafe, so be it.

8. Cont.
• Alternatively, the Government also has
many tools it can use regarding
regulation and monetary/fiscal policies
to ensure, or at least promote,
economic stability.

9. Possible Actions
 We could host a public debate about
the subject of government involvement
in the economy, giving a short
summation of our research
beforehand to educate the crowd/set
tone for the debate.

10.  http://economics.about.com/od/howthe
useconomyworks/a/regulation.htm
 http://www.fas.org/sgp/crs/misc/RL321
62.pdf

11. 9. To what extent is Adam Smith’s “invisible hand”
concept applicable
in the twenty-first century global business
environment?
 The concept of the invisible hand has
been muddled and bastardized over
the years, and is now used as a
rallying call for conservative
economists, when Adam Smith was
actually in favor of certain levels of
government intervention, even
massively preferring the idea of
government control to the idea of
monopolies and religious institutions.

12. Cont.
 In the recent, more dogmatic sense of
the word, it isn't very applicable, there
are many cases where the market will
not, or can not, self regulate.
 For example, Alan Greenspan said
that the recent economic crisis was
caused, at least in part, by regulators
being inactive due to the belief that the
financial/stock market could self
regulate through competition.

13. Cont.
 However in the more realistic sense,
the free market is still an applicable
concept, self regulation is possible, it
just cannot be relied on exclusively,
nor should the fear of outside
regulation prevent the Government
from stepping in where it is necessary.

14. Possible Actions

15.  http://www.cbsnews.com/8301-
505123_162-36640352/why-self-
regulation-of-the-financial-system-
wont-work/
 http://www.mq.edu.au/about_us/faculti
es_and_departments/faculty_of_arts/
mhpir/politics_and_international_relati
ons/staff/john_kilcullen/the_free_enter
prise_philosophy_for_and_against/