MKT 310 CHPT 2

theocratic totalitarianism

found in states where political power is monopolized by a party, group, or individual that governs according to religious principles e.g. Iran and Saudi Arabia based on Islamic principles

Foreign corrupt practices act

this law makes it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority and it requires all publicly traded companies to keep detailed records that would reveal whether a violation of the act has occurred

socilaist ideology split into two broad camps

Communists believed that socialism could be achieved only through violent revolution and totalitarian dictatorship (e.g. North Korea) social democrats committed themselves to achieving socialism by democratic means, turning their backs on violent revolution and dictatorship (e.g. Sweden) privatization (sale of state owned enterprises to private investors)

Democracy and Totalitarianism

Democracy refers to 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 gray areas do exist where there can be individualist and totalitarianism like china and Vietnam

Political economy

The political, economic, and legal systems of a country

socialism

Those who believe in public ownership of the means of production for the common good of society (production and distribution of goods and services is a shared responsibility of a group of people) Trace their roots to Karl Marx. advocated state ownership of the basic means of production, distribution and exchange (i.e. businesses) logical was that if the state owned the means of production, the state could ensure that workers were fully compensated for their labor. Thus the idea is to manage state owned enterprise to benefit society as a whole, rather than individual capitalists

Focus on managerial implications

a nation with democratic political institutions, a market based comic system, and strong legal system that protects property rights and limits corruption is clear more attractive as a place to do business in if vice versa however, reality is more complex e.g. china; b/c their market is huge even though there is corruption and piracy everywhere, they still do it; mostly b/c of their future growth trajectory

communist totalitarianism

a version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship on the decline, but existing countires are China, vietnam, Laos etc

Market Economy

all productive activities are privately owned, as opposed to being owned by the state production is determined by the interaction of supply and demand and signaled to producers through the price system consumers are sovereign For a market to work in this manner, supply must not be restricted AKA monopolized One role of government in a market economy is to encourage vigorous free and fair competition between private producers

trademarks

are designs and names officially registered, by which merchants or manufactures designate and differentiate their products

copyrights

are the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit

Mixed economy

found between market and command economies certain sectors of the economy are left to private ownership and free market mechanism while other sectors have significant state ownership and govt planning mixed economies were once common throughout the developed world, although are becoming less so

Protection of intellectual property rights differ greatly from country to country

enforcemnt of these reuglations have been lax world intellectual property organization (org that protects property rights) and dates back to paris convention for the protection of the industrial property weak enforcement encourages the piracy; china and Thailand the worst computer software is an example that suffers for lax enforcement of intellectual property rights

right wing totalitarianism

generally permits some individual economic freedom but restricts individual political freedom, frequent on the grounds that it would lead to the rise of communism many are backed by military e.g. fascist regimes that rule Germany and Italy

Patent

grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use , or sale of that inventions

Pseudo democracies

neither pure democracies nor iron clad totalitarian states lie between pure democracies and complete totalitrian systems of government e.g. Russia; ballots are held and independent press does not always toe the official line. However, Putin used his position to systematically limit the political and civil liberates of opposition groups

tribal totalitarianism

occurs when a political party that represents the interest of a particular tribe (and not always the majority tribe) monopolizes power e.g. Kenya

Totalitarianism

political repression is wide spread, free and fair elections are lacking, media is censored, and more four major forms of totalitarianism: communist totalitarianism theocratic totalitarianism tribal totalitarianism right wing totalitarianism

Property rights and corruption

property rights refer to 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 Almost all countries have them Property rights can be violated in two ways: private action Public action

Democracy

pure form is based on a belief that citizens should be directly involved in decision making impractical for large population modern democratic states practice representative democracy where you elect individuals to represent them

Individualism

refers to a philosophy that an individual should have freedom in his or her economic and political pursuits individualism stresses that the interests of the individual should take precedence over the interest of the state Two central tenets First is an emphasis on the importance of guaranteeing individual freedom and self expression second is that the welfare of society is best served by letting people pursue their own economic self interest as opposed to some collective body (such as government) dictating what is best for society central message is that individual economic and political freedom are the ground rules on which a society should be based Cold war was example of individualism (U.S.) vs Collectivism (former soviet union)

Intellectual property

refers to property that is the product of intellectual activity, such as computer software, a screenplay, a music score, or the formula of new drug (products of the mind, ideas) patents copyrights, and trademarks establish ownership rights over intellectual property philosophy behind it is to reward the originator for his idea and effort; to stimulate innovation and creative work

Collectivism

refers to the political system that stresses the primacy of collective goals over individual goals individual right's being restricted for the greater good or good of society Plato says this, do not equate collectivism with equality; wanted a class system

private action

refers to theft, piracy, blackmail, and the likes by private individuals or groups a weak legal system allows a much higher level of criminal action

Political sytem

system of government in a nation two dimensions: Either Collectivism (lean toward totalitarian) vs Individualism (lean toward democratic) Either Democratic vs Totalitarian

Command economy

the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold objective is to allocate resoruces for the good of society all businesses are stated owned, the rationale being that the govt can then direct them to make investments that are in the best interests of the nation usually opposite happens b/c state owned enterprises have little incentive to control costs and be efficient because they can't go out of business; also motivation problems, tend to stagnate b/c of this

Public action

to violate property rights occur when public officials, such as politicians, extort income, resources, or the property itself from property holders can be done through legal (levying excessive tax) and illegal means (corruption/bribes) corruption is seen and treated as illegal and when discovered violators are punished with the rule of law by full force high levels of corruption significantly reduce the FDI, level of international trade, and economic growth rate in a country