2.(5 points) Capitalism

From a single store selling coffee beans in Pikes Place Market in 1971, Starbucks has grown to35,711 stores in 2022. Opening nearly 1,000 new stores per year, Starbucks is ubiquitous, in airports and shopping areas in 70 countries throughout the world.

a.(1 point) what are some of the "means of production" in a Starbucks? What are the "relations of production" for Starbucks?

b. (1 point) the original Starbucks in Seattle was operated by three partners (Jerry Baldwin, Gordon Bowker, and Zev Siegl) who shared the work and responsibility. After a decade, they hired Howard Schultz to handle marketing. In 1987, Schultz eventually took over the company and the original partners left.

Were the means of production the same in the original Starbucks as today? Were the "relations of production" the same?

c. (2 points) When Schultz took over the company, Zev Siegl was responsible for roasting Starbucks coffee. He was a connoisseur who insisted on buying whichever beans were the best available that day so as to roast the best possible coffee. He roasted small batches of irregular type and quality. Looking to expand and unable to do so with this small and irregular coffee supply, Schultz replaced him with employees who followed his orders, roasting in large quantities so that he could, expand Starbucks. (Siegl opened a tiny Italian-style coffee bar in a hole-in-the-wall on the waterfront where people drink their coffee standing up., Content to brew his fabulous coffee and not looking to get rich, he never expanded or opened other shops.)

Why did Schultz expand Starbucks throughout the world, raising his personal wealth way beyond his needs? Why didn't the original Starbucks partners expand? Use the Marxist circuit of capital (M-C-M') to explain their behavior, and explain why a capitalist business will expand while an owner managed business might not?

d. (1 point) if you worked at a Starbucks, what would shake your decision about how hard you would work? Would you work hard enough to make enough money for your tuition and expenses and then quit? Why do people work when they own their own farms, workshops, or other means of production? Do they work to make money? Or for some other purpose? Will their motivation to work change if they are employed by others in a capitalist enterprise?

3. (6 points)Externalities. The Biden administration has beenreversing measures taken by the Trump Administration designed to increase industry profits and employment at the expense of clean air and water.

a.(2 points) Who suffered and who benefited from the relaxation of regulations restricting toxic emissions during the Trump administration?

b. How should we evaluate policy changes like these? How can we tell if they are good or bad?

c. (2 points) Does the democratic process in the United States ensure that pollution regulations will be efficient? (In your answer consider both the functioning of democracy in this country and the effect of toxic emissions on people in the United States and elsewhere, both now and in the future.)

d. (2 points) It appears that the victims did not pay the beneficiaries to stop polluting. Does this mean that the victims did not suffer more than the beneficiaries gained?

e. Use game theory and the prisoner's dilemma to explain why victims do not necessarily come together to pay polluters to stop.

4. (4 points) Is inequality necessary? Is it good?

a. (2 points) Arthur Okun considered himself a utilitarian. Why would utilitarianism incline him to favor an egalitarian distribution of income? Despite this, Why doesn't Okun favor an egalitarian distribution and how does he square this with his utilitarian beliefs?

b. (2 points) Read "Geese, Golden Eggs, and Traps" inReal World Micro(ch. 8.1) and "The Undeserving Rich" (ch. 8.5). Do you agree with Okun about the tradeoff between equality and efficiency?