INB Exam 2 - Readings SG

INB Exam 2 - Readings SG - -1 Exam 2"Alternative Reality...

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- 1 - Exam 2: “Alternative Reality Readings” Study Guide Community Capitalism 1. Neo-capitalism (private capitalism): the dominant global business philosophy 1 Markets provide for human needs more efficiently than governments. 2 Deregulation of industries promotes economic efficiency. 3 Nations should strive to build their economies around what they can produce most efficiently (rather than strive to be economically self- sufficient). 4 Privatization (selling government-run or subsidized operations to private companies) is to be encouraged as a way of promoting greater economic efficiency. 5 Economic global government organizations (WTO, IMF, EU, NAFTA, etc.) should promote and legislate economic-efficiency policies on a global scale. 6 Individualism, rather than community, should be the engine of economic growth and policy. 2. Recent decline of private capitalism’s ethic of economic efficiency 1 Neo-liberal economic policies haven’t successfully promoted economic growth in developing nations over the past two decades. 2 Neo-liberal strategies were more well-intentioned than effective, and the massive developing nation debt crisis of the 1980s-1990s brought the most radical shift yet in economic development theory. 3 Neo-liberalism is characterized by an excessive optimism concerning the role of market forces in promoting economic development. 3. Vassals of global government organizations 1 Neo-liberalism prevents developing nations from being economically self-sufficient because neo-liberal policies force developing nations to
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- 2 - produce only what maximizes their economic efficiency , thus preventing them from producing all the food that their citizens need. 2 Instead “structural adjustment policies” call for developing nations to import a significant amount of their food and other basic necessities from more efficient economies. 3 **Thus, most developing nations end of being dependent on ( vassals of ) global government organizations (GGOs) and the powerful global corporations and affluent Western nations that control most GGO policy-making. 4. De facto colonies 1 Once in debt, developing nations inevitably become hooked on further and further borrowing rather than cutting down on spending, and thus fall under the power of lending nations. At this point, the lending nations, through the International Monetary Fund, can institute their control over the debtor country through structural adjustment programs that, in effect, take over its economy to insure their interest payments are regularly met. 2 **This arrangement leaves the borrowing countries as de facto colonies. 5. The human development index 1 (HDI): an alternative way to measure economic progress 2 Measures the national standard of living on the basis of per capita income and also includes quality of life factors 6. 1 In place of neo-liberal (efficiency maximization) economics, American economist Joseph Stiglitz proposes a new set of economic policies
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INB Exam 2 - Readings SG - -1 Exam 2"Alternative Reality...

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