3.1. Protect Rights and Produce Limited Goods and Services

1. Put your phone in your bag!

PUT YOUR
PHONE IN
YOUR BAG!
DR. TURAKULOV VALIJON | INTRODUCTION TO ECONOMICS

2. What Do Fences Say About a Country?

WHAT DO FENCES SAY ABOUT A COUNTRY?
DIFFERENCE?

3. If the Land Isn’t Safe…

IF THE LAND
ISN’T SAFE…
In some countries, farmers avoid planting fruit trees
Reason: when land becomes valuable, it may be seized
So they only grow quick crops
What investments disappear first when the future is unsafe?

4.

Week #1: Foundations: Incentives & Trade-offs
Week #2: Margins & Gains from Trade
Week #3: Exchange & Transaction Costs
Week #4: Firms, Profits & Income
Week #5:Value, Wealth & Sources of Progress
Week #6: Market Forces & Unintended Effects
TOPIC OF THE WEEK:
Week #7: Institutions that Support Progress
Week #8: Midterm Exam [20 Oct – 24 Oct]
Week #9: Macro Stability & Policy
Week #10:Trade & Part 3
Week #11: Government’s Basic Roles
Week #12: Political Economy & Rules
Week #13: Government Support Programs
Week #14: Planning & Competition
Week #15: Final Exam [15 Dec – 19 Dec]

5. Protect Rights and Produce Limited Goods and Services

PROTECT RIGHTS AND
PRODUCE LIMITED
GOODS AND SERVICES
ELEMENT 3.1

6. Review

REVIEW
DR. TURAKULOV VALIJON | INTRODUCTION TO ECONOMICS

7. Airplane Example

Jet design costs billions
No country alone buys enough planes
Trade allows Boeing/Airbus to reach global buyers
Cheaper flights for all
AIRPLANE EXAMPLE

8. The Button Capital of the World

THE BUTTON
CAPITAL OF THE
WORLD
Extreme specialization
reduces costs
Scale: factories run 24/7,
huge output lowers price
per unit
Hundreds of small
suppliers cluster
together
This works only because
trade is open and
shipping is cheap
DR. TURAKULOV VALIJON | INTRODUCTION TO ECONOMICS

9. Government Trade Restrictions

GOVERNMENT
TRADE
RESTRICTIONS
Tariffs: taxes on
imports
Quotas limit import
volume
Exchange controls
affect currency
Import regulations
raise costs

10.

11. Protect Rights and Produce Limited Goods and Services

PROTECT RIGHTS AND
PRODUCE LIMITED
GOODS AND SERVICES
ELEMENT 3.1

12. Learning Objectives

LEARNING
OBJECTIVES
See
See why strong property
rights encourage investment
Understand
Understand protection vs
production roles of
government
Learn
Learn why some goods
need government provision
Recognize
Recognize limits of
government intervention

13. Government’s Protective Function

GOVERNMENT’S PROTECTIVE FUNCTION
GOVERNMENT PROTECTS
PEOPLE FROM THEFT,
FRAUD, VIOLENCE
ENFORCES CONTRACTS
AND PROPERTY RIGHTS
COURTS TREAT
EVERYONE EQUALLY
LIKE A REFEREE KEEPING
THE GAME FAIR

14. Why Protection Matters

Secure rights motivate investment
WHY
PROTECTION
MATTERS
Hard work pays off so people innovate
Startups thrive when ideas are safe
Without security, investment collapses

15. If Protection Fails

Corruption replaces honest
work
IF
PROTECTION
FAILS
Scams and property grabs appear
Businesses avoid long-term
projects
Economies stagnate under
insecurity

16. Productive Function

17. Government’s Productive Function

GOVERNMENT’S PRODUCTIVE FUNCTION
Some goods are hard for markets to provide
Government ensures basic public goods
Stable money boosts confidence
National defense must be publicly provided

18. What Are Public Goods?

WHAT ARE PUBLIC GOODS?
Jointly consumed by all once provided
Non-excludable for users
Ex: defense, flood control
Market undersupplies them

19. Why?

WHY?
Secure rights encourage
confident investment
Legal protection fuels farms,
shops, apps
Trust in the future drives
growth
Protection creates prosperity

20. Limited Government, Maximum Prosperity

Government should focus on core functions
LIMITED
GOVERNMENT,
MAXIMUM
PROSPERITY
Hard to measure costs in public projects
Too much government leads to waste
Markets handle most goods efficiently

21. Summary

Protection keeps people and property safe
Productive function supplies public goods
SUMMARY
Secure rights encourage innovation
Limited government supports prosperity

22. Any questions?

ANY QUESTIONS?
DR. TURAKULOV VALIJON | INTRODUCTION TO ECONOMICS

23. Thanks

THANKS
DR. TURAKULOV VALIJON | INTRODUCTION TO ECONOMICS