LSE100 Exam Structure Length 2 Hours Marks 120 Section 1: - 60% of paper - Answer 4 out of 8 questions.

s. - Each question is 15 marks. Section 2: - 40% of paper - Answer 1 out of 4 questions. - The question is worth 40 marks. Marking Criteria Thesis how well the question is answered. Justification how strong the reasoning is, for the answer given. Support how well is evidence used to support the thesis. Understanding of key concepts. Recommended to spend one minute per mark, leaving 20 minutes for reading and checking. Seven topics: - Who Should Own Ideas in the Digital Age? - Who Caused the Global Financial Crisis? - How Should We Manage Climate Change? - Has Gender Equality Ever Been Achieved? - The Meaning and Measurement of Poverty. - Do Nations Matter in a Global World? - Why are Great Events so Difficult to Predict?

LSE100 Who Should Own Ideas in the Internet Age? Tangible goods goods that can be perceived by the senses, i.e. touched, for example a car. Intangible goods goods that cannot be perceived by the senses, for example knowledge or ideas. Private goods Have the following properties: - Excludability the seller can exclude consumers from consuming the good if they are not willing or able to pay for it. - Rivalry - one person consuming the good reduces the amount left for other consumers to consumer or benefit from. Public Goods Have the following properties: - Non-excludable the benefits derived from provision of pure public goods cannot be confined to those who have actually paid for them. - Non-rival - Consumption of a public good by one person does not reduce the availability of a good to everyone else For regulation of copyright on ideas: - Protects the creator of the good. - Stops others from benefitting from the distribution of anothers idea. Against regulation of copyright on ideas: - Copyright stunts creativity - The Internet has created an environment in which ideas can become public goods very easily. - Technology advances promote sharing, i.e. social networks and integration with phones. - Ideas are hard to prove ownership of. Possible References: - Larry Lessig video, remixing is how younger generations have learnt to create and communicate. - Property rights defined in Becker reading. Mansell and Steinmueller: - Aim of reading is to examine how the creative industry companies, ISPs (internet service providers) and governments are positioning themselves in debates about the online use of digital information. -

LSE100 What Caused the Global Financial Crisis? Capital Requirement the amount of safe capital that a bank is required to hold as protection against stocks or bad shares, that otherwise may force the bank into bankruptcy. Credit default swaps a form of insurance against the risk that a bond defaults. It is a swap contract in which one individual makes a series of payments and, in exchange receives a payoff if a credit instrument defaults. Leverage a measure of how much a company has borrowed typically in the form of bank loans or bonds. The degree of leverage is commonly used to assess a companys ability to meet its financial obligations. Leverage Ratio the firms total assets (total borrowing + total shareholders equity) divided by shareholders equity. So the more borrowing a firm does, the greater its leverage ratio. The greater the leverage ratio, the more likely it is that an adverse development will force the company into bankruptcy. Securitization the process of combining different assets in to a single pool and then issuing securities that give a right to the income and capital of the pooled assets. Subprime Lending lending to individuals with poor credit histories. Such loans typically charge higher interest rates than other loans. Austerity - difficult economic conditions created by government measures to reduce public expenditure. Causes of the financial crisis: - Government encouraged banks to give out mortgages that otherwise may have been as too risky. - Securitization (mortgages were complicated by banks pooling them together and selling them as safe investments.) - Decline in house prices in the US. - Heightened leverage increased optimism and lax regulation. - Financial assets seemed safer than they were. - Greater interconnectedness between institutions and countries than before - US had an increasing trade deficit. (US was consuming one of India more than it was producing.) Sovereign Debt Crisis a country faces a sovereign debt crisis when it is perceived as being at risk of defaulting on its debt. Sufficient Cause A is a sufficient condition for B if the presence of A implies the presence of B (if A, then B) Necessary Cause A is a necessary condition for B if the absence of A implies the absence of B (if not A, then not B) Possible responses to the economic crisis: - Prevent banks from borrowing more than they can afford. - Leave Europe - Higher mortgage interest rates. - Greater regulation on who gets a mortgage.

Possible quotes: - Shows the estimated losses on U.S subprime loans and securities, estimated as of October 2007, at about $250 billion dollars. Blanchard 2009. - In retrospect, of course, we know that the austerity policy did not work in the UK Quah 2012. Blanchard reading looks at the basic ideas of why the financial crisis occurred and policies to implement. 4 points given for why it occurred: - Assets were created, sold and bought, which appeared much less ricky than they truly were. - Securitization led to complex and hard to value assets on the balance sheets of financial institutions. - Securitization and globalization led to increasing connectedness between financial institutions, both within and across countries. - Leverage increased. Then gives the first amplification mechanism: - When the probability of default on assets increases, expected loss and uncertainty associated with the asset side of the balance sheet increases. - This causes the value of capital to become lower and more uncertain, increasing the probability of insolvency. - Depositors are likely to want to take their funds out of the institutions, which might become insolvent. - Banks are then faced with a decrease in their ability to borrow and have to sell assets. - The sale of the assets by one institution further contributes to a decrease in the value of all similar assets, on the balance sheets of all institutions. - This then reduces their capital, forcing them to sell assets. - Cycle continues. The second amplification mechanism: - Banks need more capital, so they can either get additional funds from outside investors, or they can deleverage, that is, decrease the size of their balance sheets, by selling some of their assets or reducing their lending. - The sale of assets leads to fire sale prices, affecting the balance sheets of all the institutions that hold them, leading to further sales and so on. Q) Was the growth in the financial sector in the US since the 1970s a necessary, sufficient or jointly sufficient cause of the 2008 financial crisis, none of the above? The growth in the financial sector is not a sufficient condition, since the growth of the economy doesnt imply that there will be a crisis, although it can be argued that rapid increase in the economy produces a bubble, which will inevitable burst, causing a crisis. It is not necessary that an absence of share of GDP increasing means that there will not be a crisis, although, it may be a large factor.

LSE100 How Should We Manage Climate Change? Discount Rate - the percentage by which a given amount is worth less in the future than it is worth today. This is predicated on the assumption that most people value the present more than they value the future. Cost benefit analysis - is a systematic process for calculating and comparing benefits and costs of a project. It has two purposes: - To determine if it is a sound investment/decision (justification/feasibility), - To provide a basis for comparing projects. It involves comparing the total expected cost of each option against the total expected benefits, to see whether the benefits outweigh the costs, and by how much. Advantages of cost benefit analysis: - Uses statistics to give the most accurate analysis of climate change. Disadvantages of cost benefit analysis: - Hard to predict the effects of climate change. - Hard to monetise climate change. - The effects of climate change occur slowly over time, and so monetary estimations now may be different in the future, so hard to convince nations to contribute. - Damages such as loss of life or loss of species do not have a market value. Problems: - Free Riders. - It is hard to equate the environment in to a monetary scale. - The effects are in the future, so people are less inclined to act upon climate change, as they dont see the effects immediately. - Kyoto agreement 1997 countries that were already developed were given targets to reduce emissions however developing countries werent mandated to reduce emissions, as at the time they produced a relatively small percentage of global emissions. Free riding when someone benefits from resources, good or services, without paying into the cost of the benefit. Possible Quotes: - The risks and uncertainties around the costs and benefits of climate policy are large Stern. - Of the five leading emitters that account for two-thirds of global CO2 gas emissionsonly the EU has offered strong support for a binding climate treaty. Falkner, Stephan and Vogler.

LSE100 Has Gender Equality Ever Been Achieved? The difference between sex and gender? Sex refers to biological differences, chromosomes, hormonal profiles, and internal and external sex organs. Gender describes the characteristics that society or culture delineates as masculine and feminine. Occupational segregation the distribution of people based upon demographic characteristics, most often gender both across and within jobs and occupations. Horizontal segregation differences in the amount of people of each gender present across occupations. Vertical segregation segregation within the hierarchy of occupations, mainly mens domination of the highest status jobs in both traditionally male and traditionally female occupations. Intersectionality a concept often used in critical theories to decribe the ways in which oppressive institutions (racism, sexism, ect.) are interconnected and cannot be examined separately from one another. Equity the quality of being fair and impartial. Equality the state of being equal, especially in status, rights and opportunities. Equality equals quantity, whereas equity equals quality. - If women demand they should be treated in the same way as men, that would not be possible equality would not be possible because women and men are different, and cannot be treated in exactly the same way. However, if they demanded equity in how the world treats them, it would be a genuine demand, because now they are demanding that they be given the same rights as men have as human beings. It is equity that is desirable, not sameness. - If one were to take a classical example to distinguish between the two concepts, one could go back to the days of the cold war when the communist block countries tried to practice equality by paying everyone the same, irrespective of their station in life. The capitalist block, on the other hand, paid according to merit and productivity. The efficacy of the later approach is brought out by the subsequent collapse of the communist order. Helpful for cold war. European commission (2009a) reading: Addresses how and why employment segregation comes about and changes over years. Explanations: - Comparative advantages biologically men are better at solving abstract mathematical and visuo-spatial problems. However these finding have now been contradicted by other studies to say women can be just as good. Given modern technology, comparative biological advantages may continue to play a role in a very limited number of occupations. - Under-investment under investment in education or training on the part of women, thus confining them to poorly skilled, and poorly paid

areas of employment. On average, women receive less hours of on-thejob training than do men. Preferences and prejudices Women have clear preferences for certain occupations, and likewise for men. There are also factors such as childbirth, which thereafter females maybe less inclined to climb the job ladder. If some employers are prejudiced, Becker argues, but there are enough non-prejudice employers willing to operate with an all female or prevalently female work force, then the segregation may actually protect women against the risk of discrimination (and lower pay). Socialism and stereotypes all societies categorize members by their sex. Personality traits, preferences and potential are inferred from individuals biological sex. Barriers to entry and organisational practises Income and care roles.

Gender matters as a topic, a category, and a perspective. Craig Calhoun, what a man.

LSE100 The Meaning and Measurement of Poverty Absolute poverty - refers to a set standard which is the same in all countries and which does not change over time. An income-related example would be living on less than $X per day. Relative poverty - refers to a standard that is defined in terms of the society in which an individual lives and which therefore differs between countries and over time. An income-related example would be living on less than X% of average UK income. Human poverty index - an indication of the standard of living in a country. Components of poverty: Monetary Not having sufficient money. Non-monetary Social housing, health care, ect. Measured at Level: Household Holidays with children, day trips with family. Individual Only involving one person. Merits of measuring poverty relatively using household income (a household with an income less than 60% of median national income is defined as poor.) - Data is easily accessible. - Easy to measure progress easy to set targets. - Isnt effected by outliers. - Data is collected annually so it is up to date. - Takes into account the changes in living standard. Limitations of this measure: - Affected by economic changes. - Incomes fluctuate. - The measure may not be broad enough. - Depends on income benefits. - Doesnt take into account the cost of where you live London is more expensive than Newcastle. - Misses complexity of factors that may lead to poverty. Critically asses the policy implications of moving away from the current UK measure of poverty. For: - Data figures are easy to manipulate. - Allows a clearer picture of how badly people need help. i.e. long term poverty due to poor education, or short term poverty due to the economic downturn. - Only gives measure of poverty of whole households, not individuals. - People move in and out of jobs so current measure may not be so accurate.

Against: - Harder to measure. - More expensive. - Allows targets to be easily set. Currently the government is throwing money at the poor with no real longterm solution being provided. Long-term solutions however are harder to show that they have been achieved, and since governments have a relatively short period of time to make an impact, it is probably less of a priority. Maxwell, Simon 1999: Fault lines in the poverty debate: - Individual or household measures early measurement of poverty was at household level. other analysis disaggregates to the individual level, as to capture the intra-household factors. - Private consumption only or private consumption plus publicly provided goods - Monetary or monetary plus non-monetary components of poverty - Snapshot or timeline Assessing poverty at a point in time vs. tracking a group over a period of time to provide data. - Actual or potential poverty Those who are highly sensitive to shocks, such as droughts killing crops ect. However their income is adequate can be considered poor. i.e. current income is adequate but vulnerability is high. - Stock or flow measures of poverty Poverty as income focuses on the flow of material goods and services the alternative is to examine the stock of resources a household controls such as land or jewellery. This therefore gives a measure that is derived not from income but past investments also. - Input or output measures Writing about poverty has often assumed, wrongly, an automatic link between income and participation, or functioning in the life of a community. - Absolute or relative poverty Using a dollar a day or half mean income/ exclusion from participation in society. - Objective or subjective perceptions of poverty The use of participatory methods has greatly encouraged an epistemology of poverty which relies on local understand and perceptions.

LSE100 Do Nations Matter in a Global World? Cosmopolitanism - The ideology that all human ethnic groups belong to a single community based on a shared morality. Nationalism - a belief, creed or political ideology that involves an individual identifying with, or becoming attached to, ones nation. Globalisation - the process by which businesses or other organizations develop international influence or start operating on an international scale. Transnationalism analyses the complex interdependencies and connections that exist both across and between nation states. Betweens nations, not global, not international. Examples of transnational structures, processes an experiences. - Transnational couples and families. - Studying abroad - Talking to friends abroad - Crime trafficking people and drugs. - Migrations El Salvadorians migrate to US belong to two places at the same time. In what ways does transnationalism both challenge and reaffirm the nation-state? - National culture isnt what nationalism claims it to be. - If you cant obtain citizenship then it reaffirms the nation state. - If you find it hard to feel you belong to somewhere else it reaffirms the nation state. Whats the difference between a nation and a state? Nation refers to a community of people sharing a common descent, culture, language and identity. State refers to the political structure that governs this national community. What is the difference between multinational and transnational? Multinational describes how a business or organisation operates in more than one nation. Transnational focuses more specifically on how specific links work across nations. What is the difference between transnationalism and cosmopolitanism? Transnationalism is an empirical category of analysis that seeks to explain how particular structures; processes and experiences take place across nations. Cosmopolitanism is a normative political theory that is, it describes how the world should be, not how it is. Transnationalism explain how a globalised and interconnected world works right now, whilst cosmopolitanism advocates for the establishment of a global human identity (world citizenship) based on a concern for distant others in addition to local or national allegiances. Ethnographic - The branch of anthropology that deals with the scientific description of specific human cultures.

Stanford Encyclopaedia of Philosophy 2013: - Looks at the definitions of cosmopolitanism and objections to it. - The nebulous core shared by all cosmopolitan views is the idea that all human beings, regardless of their political affiliation, do (or atleast can) belong to a single community, and that this community should be cultivated - Moderate cosmopolitans - have a duty to provide aid, but insist that we also have special duties to compatriots. Objections: - Political it is impossible to realise or even approximate the cosmopolitan ideal in a way that makes it worth pursuing and that does not carry prohibitive risks. - Economics lack of effective democratic control by the vast majority of the worlds population, as large multinationals are able to impose demands on states that are in a weak economic position and their populations. - Moral human beings must have stronger attachments toward members of their own state or nation. - Moral cosmopolitanism would literally leave large numbers of people unable to function

LSE100 Long Question 2013 The failure to assess risk accurately was a key cause of the financial crisis and could lead to equally serious economic consequences in the context of climate change. Discuss with reference to modules 1 (how should we manage climate change?) and 4 (what caused the global financial crisis)? The financial crisis was indeed caused by a number of problems, however many of them can be attributed to the failure to assess risk. The optimism in the economy left many people blinded to the risks that in retrospect now seem obvious. This same optimism could potentially be applied to climate change and it could become more of a crisis than it already is. As a race we generally take more note of what is happening in the near future, instead of what may happen many years from now. Although climate change is over a much longer period than the rise and fall of the economy, if we fail to see the risk of the economy of tens of years, then hundreds of years is more likely to be ignored and the risk of what climate change is doing to our planet goes not unnoticed, but not acted upon. In economic terms, climate change is very hard to monetize. Our environment is a public good, we dont have to pay for the air we use, and we cannot exclude anyone from using it, so trying to put a numerical value and price on this is difficult. We can then add from this that even with the best predictions of how climate change may affect the world, the costs given now may not reflect on the real cost in 100 years time, so to then try and charge nations with a cost to help reduce C02 emissions becomes difficult, as there is no certainty of what may occur. Furthermore, the C02 emissions created by each country are hard to measure also, so therefore trying to put a price on this becomes guesswork. This can link to securitization of the financial crisis, and no one saw the risk that, if the pooled assets failed, then the route to finding out who owed what was incredible complex. The differences between the failures to accurately predict the two events will occur if we dont act upon climate change. Although the economic crisis was a historical event that caused upset to many people, governments can implement austerity programs and manage spending to try and recover the economy. Climate change could cause irreversible effects that no amount of money can reverse, for example, what is the economic cost of a species becoming extinct? In these terms the failure to predict the risks of the climate change is much more than the economic crisis. It was mentioned in the Quah readings that the subprime loan losses were around 250 billion dollars, this led to a 25000 billion dollar loss overall throughout the whole crisis. We can now see though that many factors such as the US exports being far larger that its inputs, mentioned in the Quah lecture, the US consumes one of India more than it produces. It is difficult to see, however,

how this same chain of events could occur with the climate. Although we have not fully, as a world, realized the consequences of climate change, it seems unlikely that the effects would become 100 times worse within just a few years. In this respect, the risks may be greater than the economy however there is more time to act upon them, so economically the cost could theoretically be spread out over many years. In conclusion, I believe that climate change, if not acted upon, will cause much more of a detrimental economic impact than the financial crisis. The risk is more likely to go ignored, as we cannot see the immediate effects of climate change however unlike the financial crisis, theres not a rising period of optimism to mask the inevitable downfall. So yes I do believe that if the risks are not predicted properly and acted upon the economic effect could be equal to or worse that the economic crisis. 2013 8i) - claims are made without evidence spending on recorded music has fallen every year since illegal file-sharing began to become widespread - The details of the Demos survey could be more detailed; there is also no reference in which to go to look at the full survey. - Very opinionated. The author clearly feels strongly about illegal music downloading negative effect. - The fourth paragraph uses statistics in which to reinforce his argument. - The author makes valid points but fails to use sufficient evidence in which to back up his claims. - Concise, to the point, disregards the claims against their argument. ii) It brings rise concerns that the music industry is losing a lot of sales due to illegal music sales; however, it is undeniable that the music industry, for the artists who are most at risk of piracy, still obtain large amounts of money for their work. This isnt a justification for crime, but if the consequences of illegally downloading music, is that a minority of people become slightly less rich, then it would seem justifiable that this be the case instead of communities being damaged due to younger people not being able to express themselves so easily and creativity, for industry and the like, becomes less, hence harming the economy as well. In conclusion, it rises some interesting points but doesnt really effect my analysis. Q) When it comes to copyright protection in the Internet age, should the interests of the community outweigh the interests of the creator? Yes, to an extent. Reference Lessig video, stunts creativity, technology has made younger generations create and communicate ideas using remix ect. Interests of the community should come first, as long as it is for non-profit purposes, i.e. just for the sake of creativity and pleasure. As mentioned by Lessig, the ways in which older generations were creative is now not so relevant, and the law needs to change accordingly. However if it isnt protected then original ideas will not be created, as there is no incentive for artists.

Q) Illegal downloading is theft do you agree with this statement? Justify your answer taking account of philosophical and economical considerations. I do agree with this statement. I believe that an artist has made content available for the pleasure of consumers and in order for them to have an incentive to keep producing, or even to be financially able to keep producing, they will need income in some way or another, and the most common way for artists of the music variety is through sales of their product. If this income stream were taken away from them then it would be equal, in my eyes, to going into a shop and taking a loaf of bread. The work that they produce is theirs to choose what to do with, and it shouldnt be able to be distributed to others without proper consent. In other words, if you are downloading someones work illegally, you are essentially making his or her work into a public good, and the ownership becomes less strong, stealing the rights to the product. If however you are to download a piece of music legally and then wished to use it alongside a video you created, for non profit then I believe this should be allowed and shouldnt be considered to breach copyright. The way in which technology has progressed has meant that we express ideas in different ways now, and to keep this type of creativity illegal will stunt growth and end up with a generation of people who find it difficult to express themselves because its illegal, or it will just drive their work further underground, these ideas are from the Larry Lessig ted video. Q5i) We can see from the graph that it does seem to back up the argument that rising inequality caused the financial crisis, or at least we can see the there was a rising level of inequality leading up to the financial crisis. The limitations are that is a relatively short period of time; it doesnt show previous economic cycles to compare to. It doesnt account for inflation due to the rising economic level. It is also an average over all careers, so doesnt give specific fields that could attribute more or less to the crisis. ii) In addition to this data it would be useful to look at other possible causes for the crisis, i.e subprime mortgages, the US deficit in what they were importing vs exporting (In the stern lecture it was given that the US consumed one of India more than it exported.), the inflation during this period. Given just this graph and the knowledge that the crisis happened around the time of greatest difference between the 90th and 10th percentile could just be a coincidence, so we would need to examine the changes in weekly wages from maybe 100 years before the crisis, not just 45. Also would need to look into why there was an increase in the difference between the 10th and 90th to begin with and if this could play any factors in to the economic crisis.

Does culture or economics best explain the gender segregation of labor markets? I think that the best way to explain gender segregation in labor markets is to look at the economics. Although culture gives a deeper understanding of the segregation, it can become subjective to individuals and becomes harder to collate into simple information to explain to someone. Using the economics of segregation, you can use horizontal segregation to look at the wages of males and females in the same jobs, and then the number of males and females in different pay scales. These results then can be collected together and made into graphs and charts to more easily explain to someone the problems. This would be in comparison to trying to explain a collection of interviews and views of employees, which provides a complicated analysis It is the clash of economic interests, not the theory of public goods, that best explains the failure of international action on climate change. Discuss. The theory of public goods provides a valid description for the failure of international action, whilst we all use the environment and cannot exclude anyone from using it, it is a public good and therefore ownership becomes very difficult, and hence putting a price on who owes what becomes very difficult also. Stemming from this however can come the clash of economic interests. For example, whilst trying to solve the issue, smaller countries will opt to pay nothing and free ride, hence helping their economic state, as they have nothing to pay for yet they are also benefitting on the improvements made by the countries that do pay. There also is the issue of putting a price on the environment, some countries may value the environment more than others, and so putting a price on it may cause controversies. 1)In many ways it is hard to show ownership of the environment and an idea. The environment is a public good, and therefore is non-excludable and non-rival, and as technology has improved through the digital age, it has meant that ideas are now more easily spread and we are getting to a stage in which ideas are a public good also. Whether trying to assign property rights to these items does not make economical sense is something that I do not agree with. Yes, I agree that they can be seen as public good and therefore ownership is hard, however if we dont apply ownership to the environment, then it brings up the problem that no one will try to improve it, and then it ends up getting progressively worse until it becomes irreversible. So economically it would make sense to try and assign some sort of ownership for this reason. The same sort of reasoning applies to the ideas category. If there is no way of assigning ownership to an idea, then who obtains the reward or ownership rights to it. And if there is no reward for any idea, such as a new song or film, then the motivation that artists now have to produce ideas and products becomes less. If their ideas and products then become public goods, then the ownership is diminished. The economic implications of this, for example in the music industry, are that less music is produced, so the music industry has less revenue, and then the economy as a whole becomes implicated.

In terms of whether assigning property rights are unethical brings about different arguments. With climate change it seems to me that NOT assigning property rights is unethical. If we do not assign property rights, then we assign no blame to anyone, and therefore the climate will continue to get worse, emissions will remain an issue and therefore nothing will improve. However in the way of ideas, I think it could be argued both ways. In terms of the producer, then it becomes in their best interest to protect their idea. In terms of the community it stunts creativity for everything to be copyrighted and not able to use freely. I then believe that the interests of the community should outweigh the interests of the community and therefore it is unethical to give property rights to an idea in this sense. In conclusion I believe that the environment definitely does need to be given ownership rights despite being a public good. Without this we encounter many problems in the future with climate change and such. With ideas, I think property rights should be given to the creator but they should be less strict. Ideas should be open for the community to use freely, if not for commercial gain.

Mansell and Steinmueller IDEAS Stern CLIMATE CHANGE Blanchard FINANCIAL CRISIS European commission (2009a) GENDER Maxwell, Simon POVERTY Stanford Encyclopaedia of Philosophy 2013: NATIONS