Economics in Credo: General Information

In economic history, monetary system in which two commodities, usually gold and silver, were used as a standard and coined without limit at a ratio fixed by legislation that also designated both of them as legally acceptable for all payments.

Economic system based on private ownership of the means of production, in which personal profit can be acquired through investment of capital and employment of labor. Capitalism is characterized by private property and freely functioning markets without central planning. Prices in capitalist economic systems are determined by the free and open exchanges of buyers and sellers guided by self-interest but constrained by both an ethical consensus and the rule of law.

Communism (from the Latin communis, meaning "shared" or "common"); fundamentally, a system of social organization in which property (especially real property and the means of production) is held in common. Advocates public ownership and communal control of the major means of production, distribution, transportation, and communication. Although modern communism is associated with ideas advanced by German political philosophers Karl Marx and Friedrich Engels, and Russian Communist leader and theorist Vladimir I. Lenin, its intellectual roots are as old as Plato's republic in the fourth century BCE.

Although the consumption of luxury goods, such as textiles and jewelry, occurred among elites in societies from the earliest times, the spread of consumerism since the eighteenth century is considered a significant development in world history.

Process by which different parts of the globe become interconnected by economic, social, cultural, and political means. Globalization has become increasingly rapid since the 1970s and 1980s as a result of developments in technology, communications, and trade liberalization. In politics, a big buzzword in political speech and a ubiquitous analytical category in academic debate; globalization operates today rather like modernization did in the mid-twentieth century as the key term of a master discourse about the general state of the world. The most common political version of the discourse depicts globalization as an unstoppable process of global integration, a supposedly inevitable process that while being driven by free market capitalism also necessitates all the free market reforms of neo-liberalism.

Economic system of the major trading nations during the 16th, 17th, and 18th cent., based on the premise that national wealth and power were best served by increasing exports and collecting precious metals in return. Theory that a nation’s interests were best served by development of overseas trade and restriction of imports.

General term for the political and economic theory that advocates a system of collective or government ownership and management of the means of production and distribution of goods. Note: socialism is much used, and abused, term. It can be employed to refer to quite different social and political systems.

A school of economic thought that emphasizes the importance to a strong economy of policies that remove impediments to supply.

Central bank and note-issuing institution of Great Britain. Popularly known as the Old Lady of Threadneedle Street, its main office stands on the street of that name in London.

Organization established (1958) by a treaty signed in 1957 by Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany (now Germany); it was known informally as the Common Market.

Customs union and trading bloc; its current members are Iceland, Liechtenstein, Norway, and Switzerland. EFTA was established in 1960 by Austria, Denmark, Great Britain, Norway, Portugal, Sweden, and Switzerland.

Arrangement by which most nations of the European Union (EU) linked their currencies to prevent large fluctuations relative to one another.

An economic and political grouping that was formed (1993) to extend the European Community by adding common foreign and security policies to the single market.

Central banking system of the United States. Established in 1913, it began to operate in Nov. 1914. Its setup, although somewhat altered since its establishment, particularly by the Banking Act of 1935, has remained substantially the same.

(IMF), specialized agency of the United Nations, established in 1945. The organization, using a fund subscribed by the member nations, purchases foreign currencies on application from its members so as to discharge international indebtedness and stabilize exchange rates. The IMF promotes trade by keeping currencies stable and having a fund of money from which member states may borrow.

The North American Free Trade Agreement (NAFTA) was ratified in 1994, linking Canada, Mexico, and the United States under a regime of liberalized trilateral commerce that harmonized procedures for defining rules of origin, expedited customs clearance for cross-border trade, and provided for a wide variety of institutional reforms to safeguard environmental interests and the rights of workers.

A multinational organization (est. 1960) that coordinates petroleum policies and economic aid among oil-producing nations. Members consist of Algeria, Angola, Ecuador (membership suspended 1992-2007), Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Indonesia was a member but suspended its membership in 2008. Saudi Arabia has traditionally dominated the organization, owing to its enormous oil reserves; the organization's members produce about 40% of the world's crude oil.

Organized market for the trading of stocks and bonds (see bond; stock). Such markets were originally open to all, but at present only members of the owning association may buy and sell directly.

Specialized, rules-based, member-driven agency of the United Nations, world trade monitoring body established in January 1995, on approval of the Final Act of the Uruguay round of the General Agreement on Tariffs and Trade (GATT). The WTO is an international body concerned with promoting and regulating trade between its member states.