chapter 2chapter 2. national differences in political, economic, and legal systems. the border...
TRANSCRIPT
Chapter 2
National Differences in Political, Economic, and Legal Systems
The border between Belgium and the Netherlands (in a café)
How The Rest of the World Lives
FILM - What are your thoughts …
Pros of this approach …Cons …
Introducing TradeConnect (Port of LA)http://www.latradeconnect.org/calendar/
Systems - Interdependent
Interact and influence each other, and
Affect the level of economic well-being
Economic
Political
Legal
Political System Dimensions
Political System System of government in a nation
Assessed Across 2 Dimensions: Collectivism vs. Individualism Democratic vs. Totalitarian
CollectivismCollectivism collective goals over individual goals Today is equated with socialistsSocialistsState ownership of production, distribution,
and exchangemanaged to benefit society (not individuals)
Collectivism - Socialism Splits
In the early 20th century, socialism splitinto:CommunismSocialism can only be achieved through violent
revolution and totalitarian dictatorshipSocial democratsSocialism is achieved through democratic
means
Individualism
Individualism An individual should have freedom in his own
economic and political pursuits Traced to Greek philosopher, Aristotle (384-322 BC) individual diversity and private ownership are
desirable Economic and political freedoms Democratic political systems Free market economies
Individualism - DemocracyDemocracy Government is by the people, exercised either
directly or through elected representatives Associated with IndividualismPure democracy belief that citizens be directly involved in
decision makingRepresentative democracy Citizens periodically elect individuals to
represent them
Freedom of the Press??We assume freedom of the press, but it not so in many countries …
2019 VIDEO (1 min)
Source: https://cpj.org/
Totalitarian
Totalitarianism One person or political party exercises absolute
control over all spheres of human life and prohibits opposing political parties
Associated with collectivism
TotalitarianThere are four major forms of totalitarianism:1. Communist totalitarianism – found in
states where the communist party monopolizes power (China, Cuba, Laos)
2. Theocratic totalitarianism - found in states where political power is monopolized by a party, group, or individual that governs according to religious principle (Iran, Sudan, Yemen)
TotalitarianThere are four major forms of totalitarianism:3. Tribal totalitarianism - found in states
where a political party that represents the interests of a particular tribe monopolizes power (Zimbabwe, Tanzania, Uganda)
4. Right-wing totalitarianism - permits some individual economic freedom, but restricts individual political freedom (Nazi-1933, Cypress-1974, Estonia-1934)
Political SystemsWhile watching the film, write:1. Describe each of the 6 political systems
(anarchy, libertarianism, etc.)2. Which do you believe is the best?FILM (12 min)
Discuss in small groups – respectfully
Countries in TransitionThere may be several alternatives as change comes to a country’s political system
Economic Systems
Market Economy
Command Economy
Mixed Economy
• No country is PURE market economy
• Supply and Demand determines production
• Competition encouraged by government
• Most sectors are primarily privately owned
• U.S.
Economic Systems
Market Economy
Command Economy
Mixed Economy
• Government plans what is produced, quantities and prices
• State-owned businesses• Government allocates resources
“for the good of society”• No incentive to control costs• Tend to stagnate over time• e.g., North Korea
Economic Systems
Market Economy
Command Economy
Mixed Economy
• Certain sectors - private ownership and free market mechanisms
• Other sectors - significant state ownership and government planning
• Governments own firms considered important to national security – too big to fail
• France; (US temp. GM, AIG...)
Legal Systems – Three Types1. Common law - based on tradition,
precedent, and custom contracts are detailed with contingencies
covered2. Civic law - based on detailed set of laws
organized into codes contracts are shorter/ less specific because of
detailed laws3. Theocratic law - law is based on religious
teachings
Property Rights And CorruptionThe Foreign Corrupt Practices Act makes it illegal for U.S. companies to bribe foreign government officials to obtain or maintain business over which that foreign official has authorityThe Organisation for Economic Co-operation and Development (OECD) has also adopted a convention to make the bribery of foreign public officials a criminal offense
Property Rights & Corruption are Related
Property rights can be violated:1. Private action – theft, piracy 2. Public action -
A. legally - ex. excessive taxation (extorting income) or B. illegally - ex. bribes or blackmailing
High levels of corruption reduce foreign direct investment, the level of international trade, and the economic growth rate in a country
Which Countries Are Least/Most Corrupt?
BASED ON GDP (US$) - 2019
GDPRank
CPIRank
Country CPIScore
1 23 UNITED STATES
69/100
2 80 CHINA 41/100
3 20 JAPAN 73/100
4 9 GERMANY 80/100
5 80 INDIA 41/100
= Low Corruption
= Medium/High Corruption
Based on Corruption Perceptions Index (CPI- 2019)Source: https://www.transparency.org/
180 countries
Protect Intellectual Property Rights (IPR)Patents – exclusive rights for a defined
period to the manufacture, use, or sale of that invention
Copyrights – the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit
Trademarks – design and names by which merchants or manufacturers designate and differentiate their products
How Can Intellectual Property Be Protected?
Protection of intellectual property rights differs from country to country World Intellectual Property Organization Paris Convention for the Protection of Industrial
PropertyTo avoid piracy, firms can stay away from countries where intellectual property
laws are lax file lawsuits lobby governments for international property rights
agreements and enforcement
What Is Product Safety And Liability?
Product safety laws set certain standards to which a product must adhere
Product liability involves holding a firm and its officers responsible when a product causes injury, death, or damageliability laws tend to be less extensive in less
developed nations
Let’s Get to Work ….You think you work hard???
US - Average workload is36 hours/week @ 50 weeks/year
Which do you think are the 10 Hardest Working Nations?FILM
Where to call home? If you could relocate to any country in the world, other than the U.S., to where would you move? Why?Is your answer the same as last time? Did our discussion peak your interest to visit a country? Where would you like to go?To make an informed choice (personal and business) we might like to look at:
• Political• Economic• Legal