GLOSSARY OF POLITICAL AND ECONOMIC TERMS
O - Q
Objectivism: The political philosophies of Ayn Rand (1905-1982), a Russian immigrant to the United States who became the founder of the Objectivist movement. This is a highly individualist philosophy based on the following principles: 1) Reason is man's only means of knowledge. Objectivists believe there is an Absolute Truth which can be known through human reasoning. They reject the subjectivist's belief that truth is a matter of personal opinion, as well as any form of skepticism, mysticism, and revealed truth. 2) Rational self-interest is the objective ethical code. Objectivism rejects altruism. 3) Laissez-faire capitalism is the objective social system. Objectivism rejects socialism and the welfare state. The writings of Ayn Rand (Atlas Shrugged, The Fountainhead) became huge bestsellers, and classic parts of Americana. But critics note that for all of Objectivism's talk about individualism and reason, the movement bears all the trappings of a cult, with true believers accepting the received truths of Ayn Rand, its central guru figure. Critics also note that mainstream academia has largely ignored Objectivism; for example, it is hardly even introduced in philosophical texts. (See also libertarianism (right).)
Oligopoly: A market situation in which a few firms dominate the production of a good or service. Examples in the U.S. include automobiles, airlines, soft drinks, tobacco and steel. Sometimes oligopolies take the form of a few giant firms dominating the industry, with hundreds of Mom and Pop stores nibbling at the edges of their markets. An example of this is Campbell's and Lipton's soup, which dominates the market, although a local restaurant chain may be famous for its homemade stew. Critics charge that oligopolies suffer many of the same problems as monopolies, in that the relative lack of competition allows them to raise prices, lower quality, prevent start-up competition, etc. But don't oligopolies face powerful competition from each other? Critics charge that they more often enter into collusion with each other, by fixing prices at artificially high rates ("price-gouging"). Such agreements are much less possible when there are dozens of competitors in the field. The reason is because any one of the numerous competitors has more to gain by not cooperating: namely, the capture of the entire market. On the other hand, oligopolies have more to lose by competing; their rivals are rich and powerful, so competition is bound to be costly. Furthermore, there is no guarantee who will win. (See imperfect competition; monopoly; market failure.)
PAC: See Political Action Committee.
Path dependency: The tendency to stay to a certain path, trend, technology, method or location, even if more promising alternatives show up. The most commonly cited -- and now disputed -- example is the QWERTY typewriter keyboard. This was designed in the 19th century to space apart the most commonly used letters to slow down typing, to avoid jamming keys. Today's electronic keyboards do not suffer from jamming, however, and a better system, DSK, cuts down on typing time by 10 percent. Unfortunately, society is committed to the old system, because it is too costly to retrain all typists and retool all keyboard production everywhere. Conservatives have raised objections to the QWERTY example, but path dependency has been found in countless other parts in the economy as well. Examples include the English vs. the metric system, steam vs. gas engines, water-cooled vs. gas-cooled nuclear reactors, or the centralization of an entire industry in a single city, like auto production in Detroit. Liberals argue that high short-term costs prevent long-term beneficial change, and the market alone does not seem to correct for this failure. (See also market failure.)
Parliamentary system: A government without an executive branch, whose power is concentrated in the legislature. The legislature elects a prime minister and his or her cabinet officials from their own ranks, and they stay in power as long as they command a majority in parliament. If no party has a majority, then parties bargain with each other to form a coalition that does. The government may be replaced in elections, which occur at regular intervals, or by a vote of confidence, which may occur at any time. Proponents favor this system for its ease of disposing governments which have fallen out of favor with the majority of parliament. But critics charge that parliaments lack the checks and balances of separate executive and legislative branches. In a parliamentary system, a prime minister's actions are checked only by the fear that his government will fall if it does not retain majority approval. (See also democracy.)
Peer review: A scientific process by which a scholar's work is formally reviewed by his peers for criticism. This is usually done in a peer-reviewed journal or a scientific conference. Such review is vitally important for retaining the integrity of science, for a number of reasons. First, it is important that society's most competent and educated experts evaluate a scholar's work. Evaluation below this level, for example, by journalists, pundits or the public, is less competent by definition. Second, it is important for a scholar to meet his critics, many ideologically opposed, to argue out their differences. This highlights possible bias in a work. Third, it corrects many errors that a scholar might have missed. Fourth, it helps prevent fraudulent science. Fifth, it helps establish a scientific consensus, which is useful for the public in evaluating the status of a theory. (See also crank; scientific consensus.)
Perfect competition: An idealized economic model of how competition works in the market. Perfect competition rests on several assumptions: that there are many firms producing the same product, that the product is homogenous (that is, the same everywhere, like wheat), that the objective of each firm is to maximize profit, that no firm has an advantage over another firm, that information affecting production is freely available to all, that there are no financial or regulatory barriers to entering or leaving the competitive industry, and doing so is in fact easy. As you can imagine, perfect competition does not exist in the real world. (See also imperfect competition; market failure.)
Political Action Committee (PAC): A lobbying organization that represents a special interest group before a legislature. (See also corporate special interest system; lobbying; special interest group.)
Populism: Any mass political movement that mobilizes the people, usually the lower class, against an existing government or institution. Populism often features calls for defending the underdog. Although most populism is liberal, there are plenty of conservative examples as well. Pat Buchanan's 1996 presidential candidacy made an overt populist appeal to blue collar workers by evoking corporate downsizing and job loss to foreign nations.
Primary: In a party election, state-wide ballots that immediately and directly award delegates to the candidates. Because this method is simpler than caucuses, it turns out more voters, and therefore tends to elect more mainstream candidates. (Compare to caucus.)
Private Sector: That part of society owned and controlled by individuals. This is, however, a colloquial definition; debate continues to rage among political philosophers over the nature of private property and who ultimately owns it. (See also property.)
Progressive: 1) A person who believes in the doctrine of change and progress, especially as led by science. Used colloquially to refer to the very liberal. 2) A member of the U.S. Progressive Movement between 1890 and 1920, which is also known as the Progressive Era. This movement is responsible for introducing the campaign primary in many states (replacing caucuses), the initiative, the referendum, and the recall, among other reforms.
Progressive tax: A tax where high incomes are taxed at a higher percentage than low incomes. For example, a person making $10,000 a year may be taxed 5 percent, whereas a person making $60,000 a year may be taxed 30 percent. The rationale behind such a tax is to prevent income inequality from becoming extreme. Liberals argue that if everyone were taxed at the same percentage, then money's ability to make money would ensure that those with the most of it would see soaring incomes. Conservatives charge that progressive taxes punish success. (See also meritocracy.)
Propaganda: A message designed to persuade a select audience to act or believe in a certain manner, one advantageous to the propagandist. Propaganda can be true or false, sincere or intentionally deceptive, intellectual or emotional. What distinguishes propaganda from other types of political or religious communication is that it is always designed to sell a viewpoint or plan of action, and carefully crafted to appeal to a specific group. Needless to say, propaganda is practiced in every country in the world, by all politicians everywhere. An example of political communication that is not propaganda is two people who share the same viewpoints discussing and analyzing a political problem, in the spirit of honest research. Propaganda is most effective when the propagandist has the power to shut down opposing viewpoints. History shows that in such cases, a population can be led to accept extreme and even absurd beliefs. Propaganda can take many forms, but the most effective propaganda techniques were outlined by Hitler in Mein Kampf. For propaganda to be effective, Hitler wrote, it had to be brutally simple, repetitive, one-sided, black-and-white, and attacking rather than defensive. A good propagandist never conceded an inch to the enemy, even when apparently wrong, and never acknowledged the complexity of an issue. But the primary trait of propaganda, according to Hitler, was emotionalism. An effective message should never appeal to intellectuals or scientists -- it should always appeal to people's hatred, anger, blame, patriotism, prejudice and fighting spirit. There is evidence that Hitler's strategy worked only among the lower classes in Germany, and resulted in the flight of Germany's intelligentsia to other countries. But these techniques are still alive and well in political discourse around the world today.
Property: The definition of property is one that has long been argued by political philosophers. The 18th century philosopher John Locke argued that property was whatever one has "mixed his labor with." One modern conservative definition is that property is whatever is earned on the market, pioneered, inherited, or conquered. One modern liberal definition is that property is something whose use is controlled, usually by threat of force. This can include land, objects, ideas, even people (slaves). Since groups defend property more efficiently than individuals, individuals in modern times enter into group agreements -- or social contracts -- to establish a property system. This includes defining it by democratic government and law, and defending it by police and military forces. Since society (as represented by government) designs the property system, society is the sovereign owner. As the sovereign owner, government creates a subordinate property system for its citizens to use. Many governments have liberalized citizen's rights to use property to a very high degree, but the ultimate owners still place limits on its use, in the form of zoning laws, property taxes, etc. (See also social contract; sovereignty; rights.)
Public choice theory: See Rational Choice Theory.
Public goods: A good whose consumption by one individual does not interfere with its consumption by another individual. An example of the difference between private and public goods is a movie theater. The movie itself is a public good, because several people can watch the movie without decreasing anyone else's movie consumption. However, the popcorn they eat is a private good -- each handful of popcorn someone eats is one less handful available to anyone else. Other examples of public goods include parks, national defense, streetlights, even air. Pure public goods are those where it is impossible to exclude individuals from its consumption. National defense is such an example; individuals receive protection from the armed forces whether they want it or not. Providing and paying for public goods represent a significant problem to free-market advocates, and a body of economic theory has sprung up trying to solve the "public goods problem" or the "free rider problem." Liberals argue that public institutions like government are ideally suited for providing and paying for public goods. (See also free rider.)
Public sector: That part of society owned and controlled by the public, namely, government. For example, no single individual owns a public park; everyone owns it, and they control it through democratic government. (Compare to private sector.)
Quintile: One-fifth of the income distribution. Economists refer to the poorest 20 percent of the population as the "first quintile," the second poorest 20 percent as the "second quintile," and so on, to the "top" or "fifth quintile." The income attributed to a quintile is its average income, unless otherwise specified.
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