Ch 1 Flashcards
(75 cards)
Weak vs. strong nations: Dependency Theory
Argues economically strong nations exploit resources
And labor of weaker nations through trade
Some nations grow and flourish at the expense of keeping
Others economically poor
Why nations are economically weak or strong, 6 general reasons?
1 dependency theory 2 natural resources 3 education and technology 4 climate 5 private market 6 law/legal system
3 Arguments against dependency theory
Strong nations invest and trade more with strong nations
Compared with weak nations
International trade usually accounts for small fraction of
income in most nations
Lack of conditions encouraging internal economic activity
Weak vs. strong nations: Natural resources 3 points
Whether or not nations have abundant natural resources
Has been offered to explain economic prosperity
Japan has few and is prosperous, Russia and African,
South American countries have many but are weak
Fairly well off resource abundant nations are well off because
They can sell to nations with strong diverse economies
Weak vs. strong nations: education and technology
Strong nations usually have more schools and implement
Technology more quickly
In some parts of the world well educated people have few
Job opportunities and powerful technologies are easily
Transferred btw countries
Widespread education and rapid technology implementation in nations seem to be…
More a result rather than the primary cause of strong
economies
Weak vs. strong nations: Climate
Geographers have thought that climate helps explain
whether nations are economically strong or weak
They believe when temperatures are too hot people are
Less able to work, especially outdoors (however Singapore
Is in hot climate)
Weak vs. strong nations: private market
Many economists feel Presence of private Market is most significant reason why some countries Are strong
Russia has a private market and is weak
Weak vs. strong nations: law/legal system
Adequately enforced system of equally applied law
Is recognized as necessary foundation for strong economies
Law secures elements of trust and certainty vital to
Economic transactions between strangers
3 concepts establish a necessary framework for the most effectively functioning market in the modern nation
1 law
2 rule of law
3 property
Law
Intended to tell members of society what they can and
Can’t do
Law is made up of rules
These rules are laid down by state and backed up
By enforcement
Rule of law
Laws made are generally and equally applicable
They apply to all or most members of society and apply
To various groups in the same way
Property AKA Ownership
Legal right that allows you to exclude others from your
Resources
It makes what is yours “yours”
3 types of ownership fences
1 public property
2 private property
3 common property
Public property
Applies to public resources owned by government
Ex. Roads, public buildings, public lands, monuments
Private property
Applies to resources you own as an individual
Common property
Applies to resources like land that more than one individual
Owns jointly
What is the central concept of western legal systems?
Property
Contract law
Enables owner to exchange resources at a future date
Tort law
Compensates owner’s whose resources are wrongfully
Harmed by actions of others
Criminal law
Punishes those who harm an owner’s resources in
particular ways
Ex. Theft
Law of business organizations
Identifies how individuals can own and use private resources
In groups
Regulatory law
Both protects ownership and sets limits on private
Resource use
Antitrust law
Forbids owners from monopolizing classes of resources
Sets rules for how businesses can compete to acquire
Ownership of new resources
