Economic Definitions
DEFINITIONS
- Federation
- Roughly, a tiered government. I am a citizen of Texas, but I am also a citizen of the United States. The state governments are not "children" of the national government, but there is a division of authority and responsibilities between the two levels. "The general government is not to be charged with the whole power of making and administering laws. Its jurisdiction is limited to certain enumerated objects, which concern all the members of the republic...The subordinate governments...will retain their due authority and activity." (James Madison, The Federalist Papers, No. 14, 1787)
- Republic
- "A pure democracy, by which I mean a society consisting of a small number of citizens, who assemble and administer the government in person, can admit of no cure for the mischiefs of faction...A republic, by which I mean a government in which the scheme of representation takes place, opens a different prospect..." (James Madison, The Federalist Papers, No. 10, 1787)
- Capitalism
- "In capitalism, individuals and corporations, not the government, own the principal means of production and seek profits. (In socialism, the major means of production are owned by the government.)...If capitalism requires strict noninterference by government in the affairs of business, ours has never been a urely capitalistic system. Many of the Founding Fathers favored creating a strong industrial economy and intended to use the powers of government to spur those efforts." (Lineberry, Robert L. Government in America, 4th ed., 1989. p 54.)
- Mixed Economy
- "Government spends a third of our GNP; it employs one-sixth of our work force; it regulates our economy. So great is government's role that we call ours a mixed economy, one in which the government is deeply involved." (Lineberry, Robert L. Government in America, 4th ed., 1989. p 55.)
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