Freedom’s Sound study notes

Key Terms:

1. Soviet Union (Union of Soviet Socialist Republics) –Communist Revolution 1917. During WW II the Soviet Union took control of the Baltic Republics, including Estonia. The USSR was officially dissolved on December 31, 1991.

2. Communism/Socialism/Central Planning – a system of economic organization in which the ownership and control of the basic means of production rest with the state, and resource allocation is determined by centralized (government) planning rather than market forces.

3. Market Economy/Free Markets –private parties make their own plans and decisions with the guidance of unregulated market prices. The basic economic questions of consumption, production, and distribution are answered through these decentralized decisions.

4. Innovation – the introduction and adoption of a new product or process.

5. Protectionism – protecting domestic producers by limiting, with tariffs or quotas, the importation of foreign goods and services.

6. Tariff – a tax levied on goods imported into a country.

7. Inflation – a continuing rise in the prices of goods and services; purchasing power declines when inflation is present.

8. Free Trade – trade between nations without protective tariffs or quotas.

9. Incentive – something that motivates an individual to perform an action or exert greater effort

Questions for notes:

  1. How can a small country participate in globalization?

______

  1. Since its independence from the Soviet Union in 1991, Estonia

______

  1. With the right institutions—democracy, free trade, free markets—suddenly people had the opportunity to ______their lives.
  2. What is happening at the company highlighted by this DVD?

______

  1. “Just to buy an ______you had to know someone, get it through a back door.”
  2. For forty years they had built pianos exclusively for the state….There was no ______, no incentive.
  3. Why was there no incentive to improve the product? ______
  4. IndrekLaul bought as much ______as he could. In 2003 he gained controlling interest in the troubled company.
  5. What does the phrase “controlling interest” mean? ______
  6. Today the Estonia Piano ______from the finest quality imports and techniques from around the world.
  7. Estonia Pianos are now sold ______and rank close to Steinway in quality at about half the price.
  8. We can clearly see that a great benefit of free trade is cheaper goods…but we often forget that the ______also gain so much.

Discussion: Was there any guarantee that life would improve for Estonians after independence from the Soviet Union? How did free trade contribute to human freedom?