ICMidterm_StudyGuide - IC333 Midterm Review...

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IC333 Midterm Review CONCEPTS/ISSUES: The Global North: includes North America, Europe, and East Asia. Liberal Market economies: include the United States and the Untied Kingdom. o Characterized by company-led adjustment, deregulation, entrepreneurial capitalism, innovation, more focus on markets than social justice. Coordinated Market economies: include Germany (social capitalism), Japan (state-led economy), and China (authoritarian-led economy). o Characterized by bargained adjustment between the state, business, and labor, re-regulation, and organized capitalism. Markets: exists at a local, regional, national, and global level. Markets are efficient mechanisms for resource allocation. Markets engage in “creative destruction”. They revitalize or destroy firms and societies. Problems: there are winners and losers, (econ and social polarization) and environmental destruction. Market Globalism: includes deregulation and the promotion of free trade and capital flows. It supports weaker unions with maximum discretion given to businesses. Represents the current global architecture. A.k.a. neoliberalism. o Examples: WTO, IMF, G-7, and World Economic Forum. Democratic Globalism: alternative to market globalism. Adam Smith’s Ideology. o is composed of reformed global institutions and speaks with a democratic voice. Labor movements are more supported under democratic globalization, as are environmental standards, and strategic development for countries. This includes debt relief for countries who borrowed under corrupt leaders, now are democratic. o One representing group is the World Social Forum. Also, the Tobin Tax, which is a tax on all currency that crosses borders, has been promoted. There is a one percent tax, if investors remove their investment from the country within one year. The democratic globalism movement can be encapsulated in the “Seattle coalition”. Relevant past midterm exam question: Advocates of democratic globalism would argue that: a. capitalism is not producing enough innovation b. global capitalism generates growing inequality c. multinational corporations are good for the environment but create too many sweatshops d. there is too much regulation of the global economy Market fundamentalism: Relevant past midterm exam questions: - Q: The concept of market fundamentalism implies that a. markets tend toward an equilibrium that offers the best allocation of resources. b. markets are good but need to be regulated by other institutions, such as national governments, to correct the many problems that markets create. c. while markets should rule the economy, they should not supercede social values. d. market initiatives should be coordinated with labor and government interests. - Q: Critics of “market fundamentalism” might include:
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ICMidterm_StudyGuide - IC333 Midterm Review...

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