Module 2 Flashcards
a term that stresses that the political, economic, and legal systems of a country are interdependent; they interact and influence each other, and in doing so they affect the level of economic well-being
political economy
the system of government in a nation
political system
stresses the primacy of collective goals over individual goals- traced to Greek philosopher Plato
collectivism
socialism can only be achieved through violent revolution and totalitarian dictatorship
communism
socialisms is achieved through democratic means
social democrats
refers to the philosophy that an individual should have freedom in his economic and political pursuits traced to Aristotle
individualism
a political system in which government is set/decided by the people, exercised either directly or through elected representatives
democracy
form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties
totalitarianism
found in states where the communist monopolizes power
communist totalitarianism
found in states where political power is fueled by religious principles
theocratic totalitarinism
particular tribes fuel political powers
tribal totalitrianism
permits some individual freedom but restricts individual people
right-wing totalitarianism
political ideology linked to economic systems
market economies
command economies
mixed economies
state-directed economy
all productive activities are privately owned and production is determined by interaction of supply and demand
market economies
government plans the goods and services that a country produces, quantity that is produced and the prices at which they are sold at
command economies
the 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 can be violated through:
-private action: theft, piracy
-public action: excessive taxation, bribes or blackmail
property rights
making it illegal for US companies to bribe foreign government officials to obtain or maintain business over which that foreign officials have authority
foreign corrupt practices act
property that is produced of intellectual activity “protected through”
intellectual property
exclusive rights to the property for a defined period of time
patents
exclusive legal rights of authors to publish and disperse their products
copyright
design nd names by which merchants designate their work
trademarks
set certain standards to which a product must adhere
product safety laws
involves holding a firm and its officers responsible when a product cause injury/harm
product liability
refers to its political, economic, and legal systems
political economy
the rules or laws that regulate behavior
economic systems
three main types of legal systems
COMMON LAW
CIVIL LAW
THEOCRATIC LAW
based on tradition, precedent and customs
common law (uk)
based on a very detailed set of laws organized into codes
civil law (europe)
based on religious teachings
theocratic law (saudi)
CIGS
contracts for the international sale of goods
The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant –
John Stuart Mill
An individual who intends his own gain is “led by an invisible hand to promote an end which was no part of his intention. Nor is it always worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it. I have never known much good done by those who effect to trade for the public good”
adam smith
Without private property, no man will be seen to be liberal and no man will ever do any act of liberality; for only in the use of money is liberality made effective
Aristotle
state directly influences investment activities of private enterprise through “industrial policy.”
state-directed policy
a balance of command and market economy
mixed economy
National Differences in Political Economy Businesses must observe
-Home country laws
-Host country laws
-International Laws and Treaties
-Different Legal Systems
-Common Law
-Civil Law
-Theocratic Law
A specifies
-conditions under which an exchange will happen
-rights/obligations of parties
contract
It is based on a country’s legal system.
Systems differ based on legal tradition
-common law system
-civil law system
contract law
need to be resolved based on a particular legal system
-Which country’s? Home? Host?
disputes
