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  • Read article: http://www.economist.com/books/displayStory.cfm?story_id=13055964&source=hptextfeature - Anatomy of an Idea
  • exploitation of one class by another are the motivating forces behind all historical developments. Class relationships are defined by an era’s means of production. Eventually these relationships cease to be compatible with the developing forces of productions At this point, revolution occurs and a new ‘ruling class’ emerges. modern industrial society  conflict between ‘bourgeoisie’ and ‘proletariat’. Proletariat will lead a revolution. in past revolutions, private property was reallocated in favor of a new class. proletariat, due to the nature of their class, have no way to appropriate private property. - thus when proletariat obtain control, they will destroy all ownership of private property and classes themselves will disappear. = = = Bourgeoisie are owners of means of production ( physical instruments of production like tools and machines, as well as methods of working such as skills, forms of cooperation, division of labor etc., and knowledge that can be applied to production like science) Those who sell their own labor to survive as they do not own means of production
  • exploitation of one class by another are the motivating forces behind all historical developments. Class relationships are defined by an era’s means of production. Eventually these relationships cease to be compatible with the developing forces of productions At this point, revolution occurs and a new ‘ruling class’ emerges. modern industrial society  conflict between ‘bourgeoisie’ and ‘proletariat’. Proletariat will lead a revolution. in past revolutions, private property was reallocated in favor of a new class. proletariat, due to the nature of their class, have no way to appropriate private property. - thus when proletariat obtain control, they will destroy all ownership of private property and classes themselves will disappear. = = = Bourgeoisie are owners of means of production ( physical instruments of production like tools and machines, as well as methods of working such as skills, forms of cooperation, division of labor etc., and knowledge that can be applied to production like science) Those who sell their own labor to survive as they do not own means of production
  • - Discuss Articles of “Economic Nationalism” here – urge to keep JOBS and CAPITAL at home is centerpiece of this.
  • Using GNP or PPP is sometimes not enough Need better indicators to measure development
  • A) Toys R Us strategy – large warehouse-style toy stores plus heavy advertising FEDEX – strategy of centralized hub B) Economic freedom – this allows for innovations C) Since most property rights are informal, these assets cannot be converted into capital for investment D) Is dictatorial system better than democracy?
  • Over 50% of the world now lives under democratic government Are democracies better? Are dictator ships better? Why is one better then a the other? What is better for Pakistan? Why?
  • Over 50% of the world now lives under democratic government Are democracies better? Are dictator ships better? Why is one better then a the other? What is better for Pakistan? Why?
  • Conflicts between Islam and West and West and China Fukayama on the other hand argues that we may be facing “the end point of mankind’s ideological evolution and the universalizatioin of western liberal democracy as the final form of human government” (ask questions on both Huntington and Fukayama).
  • Desire to keep JOBS and CAPITAL at home See next slide That voices of reason (pro commercialism) will be drowned out by ‘economic nationalists’ (world trade may shrink for first time since 1982) Other nations would also raise tariffs.
  • Europe: Free markets – (rampant markets) – in europe word is used in economic context America: Moral context – ‘godless, amoral, tax-happy’

Transcript

  • 1. Lecture II: Country Factors
  • 2. Political Systems: Collectivism
    • Collectivisim: refers to a political system that stresses the primacy of collective goals over individual goals.
      • Socialism: State owns means of production so that it can fully compensate workers for their labor
    • Communists vs. Social Democrats
      • Communists: socialism can be achieved only through violent revolution and totalitarian dictatorship
      • Social democrats: socialism can be achieved by democratic means
  • 3. Political Systems: Individualism
    • Individualism: Philosophy that an individual should have freedom in his or her economic and political pursuits
    • Tenets of individualism:
      • Guaranteed individual freedom and self-expression
      • Welfare of society is best served by letting people pursue their own economic self interest
  • 4. Democracy and Totalitarianism
    • Democracy : a political system in which government is by the people, exercised either directly or through elected representatives
    • Totalitarianism: form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties
  • 5. Elements of Representative Democracy
    • Representative Democracy’s elements:
    • An individual’s right to freedom of expression, opinion and organization
    • A free media
    • Regular elections in which all citizens are allowed to vote
    • Universal adult suffrage
    • Limited terms for elected representatives
    • A fair court system that is independent from the political system
    • A nonpolitical bureaucracy
    • A nonpolitical police force and armed service
    • Relatively free access to state informatioin
  • 6. 4 forms of Totalitarianism
    • Communist Totalitarianism
    • Theocratic Totalitarianism
    • Tribal Totalitarianism
    • Right-wing Totalitarianism
  • 7. Economic Systems Comparison: Market, Command, Mixed
    • Market Economy :
    • All productive activities are privately owned, as opposed to being owned by the state.
    • Goods and services produced by the country are not planned by anyone
    • Production is determined by the interaction of supply and demand
  • 8. Economic Systems Comparison: Market, Command, Mixed
    • Command Economy :
    • The goods and services, their quantity and prices are all planned by the government
    • Objective of the command economy: to allocate resources for ‘the good of society’.
  • 9. Economic Systems Comparison: Market, Command, Mixed
    • Mixed Economy :
    • Certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership
    • Countries with mixed economies often take up ownership of industries that are troubled. Example: France taking over Renault as it felt social costs of large unemployment undesirable
  • 10. Legal Systems: Property Rights
    • Legal System : refers to the rules , or laws, that regulate behavior along with the processes by which the laws are enforced and through which redress for grievances is obtained
  • 11. Different Legal Systems
    • Common Law: Based on tradition (legal history), precedent (prior cases), and custom (ways in which laws are applied in specific situations)
    • Civil Law: based on very detailed set of laws organized I
    • Theocratic Law: Law based on religious teachings
  • 12. Country Focus: 40 Years of Corruption in Nigeria
    • Despite tremendous oil reserves, people are poor.
      • 300 billion in 30 years from oil
        • $30 billion debt
        • Life expectancy 50 years
  • 13. Contract law
    • Contract law : body of law that governs contract enforcements
    • Property rights : refer to the bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource
  • 14. Lecture II: Determinants of Economic Development
  • 15. Differences in Economic Development
    • GNP vs. PPP (Purchasing power parity)
      • GNP: measures total annual income received by residents in a country
      • PPP: allows for a more direct comparison in living standards between countries depending on whether the cost of living is lower or higher as compared to the USA
  • 16. Broader Conceptions of Development
    • Noble Prize winner Amartya Sen argues that development should be assessed less by material output measures like GNP or PPP and more by capabilities and opportunities people enjoy
    • HDI is used –
      • Life Expectancy (function of health care)
      • Educational attainment (adult literacy, levels of education)
      • If average incomes sufficient to meet basic requirements
  • 17. Political Economy and Economic Progress
    • Innovation and Entrepreneurship are engines of growth
    • Innovation and entrepreneurship require a market economy
    • I and E require strong property rights
    • Stable Political system
  • 18. States in Transition
    • Spread of democracy
  • 19. Evolution of Commercial Institutions
    • Evolution of societies –
    • Why are individual groups better at business than others?
    • The gender gap
    • Property rights
    • Evolution of religions
    • Evolution of economic groups
  • 20. The New World Order
    • Huntington’s thesis vs. Fukayama’s ideas
  • 21. Nature of Economic Transformation
    • Deregulation: involves removing of legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate
    • Privatization: transfers the ownership of state property into the hands of private individuals frequently by sale of state assets through auctions.
  • 22. Article Review
    • Return of Economic Nationalism:
    • What is economic nationalism?
    • How does trade benefit? (see next slide)
    • What fear does the article raise?
    • Why would raising tariffs result in greater chaos?
    • Why does the article say that “Buy American” label be erased?
    • What are the three principles it suggests Obama should follow?
  • 23. Spread of Market-Based Systems
    • Why is trade a good thing?
    • Trade encourages specialisation, which brings prosperity;
    • global capital markets, for all their problems, allocate money more efficiently than local ones; 
    • economic co-operation encourages confidence and enhances security.
  • 24. Article Review
    • Anatomy of an Idea:
    • What does the word ‘liberal’ mean in Europe?
    • What does it mean in America?