Francisco Perón's Breaches

Better Essays
Without trade, he basically took away many of the potential buyers of their once flourishing export commodities. Another of Perón’s breaches of the ten principles of economics is governments can sometimes improve market outcomes; when the government seized public lands along with price and wage restrictions, these actions caused a tremendous imbalance of the invisible hand of supply and demand in their markets. It is critical that a government enforces property rights, so that a “person can own and control scarce resources” (Mankiw, 2015, p. 12). It is unfortunate that a once powerful and economically stable country like Argentina lost its power and standard of living due to misuse and frankly, abuse of socialized programs.
Denmark and
…show more content…
GDP is used to measure the market value of a country’s goods and services over a specific time period. The GDP is made up of four components: Consumption, investment, government purchases and net exports (exports – imports). There are a few portions of GDP directly related to socialism. The first, and most obvious, is government purchases. In a socialist society, the government would control much of a country’s social services like welfare, social security, etc. These social services would be paid for by collecting tax from peoples, products, and services within a country. Many of the social services provided and paid for are not considered part of the GDP, instead they are considered transfer payments, because social program payments are not made for a good or service being produced by a country. From a macroeconomic viewpoint transfer payments are like negative taxes to the GDP (Mankiw, 2015, p. 202); therefore, increasing the social services within a country would reduce a country’s GDP. Another issue to discuss regarding socialism is state funded education. A teacher’s salary is considered government expenses in the GDP; however, the price of state funded education would be considered a social tax and therefore a transfer payment. Although the initial cost of funding education may be a drain on the GDP, in the long run the production gained from more people receiving post high school education would hopefully counter any of the negative costs to GDP and actually be a gain from the increased goods and
Get Access