Chap002 - Chapter 2 Chapter 2 National Differences in...

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Unformatted text preview: Chapter 2 Chapter 2 National Differences in Political Economy 2-2 Introduction Question: What is the political economy of a country? A countrys political economy refers to its political, economic, and legal systems These systems are interdependent, and interact and influence each other A countrys political system has major implications for the practice of international business 2-3 Political Systems A political system is the system of government in a nation Political systems can be assessed in terms of the degree to which they emphasize collectivism as opposed to individualism in terms of the degree to which they are democratic or totalitarian 2-4 Collectivism and Individualism Collectivism refers to a system that stresses the primacy of collective goals over individual goals Collectivism can be traced to the ancient Greek philosopher Plato Today, sots support collectivism When collectivism is emphasized, the needs of the society as whole are generally viewed as being more important than individual freedoms 2-5 Collectivism and Individualism Som Modern sots trace their roots to Karl Marx who advocated state ownership of the basic means of production, distribution, and exchange The state then manages the enterprises for the benefit of society as whole 2-6 Collectivism and Individualism In the early 20 th century, som split into communists and social democrats Communists generally believed that collectivism could only be achieved though revolution and totalitarian dictatorship, while social democrats worked to achieve the same goals by democratic means Many state-owned enterprises failed to succeed, and today, many nations are implementing privatization programs whereby state-owned enterprises to private investors 2-7 Collectivism and Individualism Individualism Individualism is a political philosophy that suggests individuals should have freedom over their economic and political pursuits It can be traced to Aristotle who argued that individual diversity and private ownership are desirable Individualism stresses individual freedom and self-expression letting people pursue their own self-interests to achieve the best overall good for society democratic systems and free markets 2-8 Democracy and Totalitarianism Question: What is the difference between a democracy and totalitarianism? Democracy is a political system in which government is by the people, exercised either directly or through elected representatives Totalitarianism is a form of government in which one person or political party exercises absolute control over all spheres of human life, and opposing political parties are prohibited 2-9 Democracy and Totalitarianism Generally, democracy and individualism go hand in hand The most common form of democracy today is representative democracy , where elected representatives vote on behalf of constituents 2-10 Democracy and Totalitarianism...
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This note was uploaded on 04/23/2011 for the course ECON 102 taught by Professor Econ during the Spring '11 term at Universitas Katolik Parahyangan.

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Chap002 - Chapter 2 Chapter 2 National Differences in...

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