ChristienAyers

4/21/16
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Unit6:Chapter25EconomicSystems,1900toPresentOutline

I.

II.

III.

DivergentApproachestotheEconomy
A. Capitalism(PrimarilyusedinWest)
1. 2types:freemarketcapitalismandstatedirectedcapitalism
2. Freemarketcapitalism:regulatedorunregulated
a) Regulatedmeansgovernmentintervention,arguedthatgovtisneededtosustainstableeconomy
(1) JohnMaynard,govtinterveneincrisis,consumerconfidencefluxalot
b) Unregulatedonlymarketforces(supplyanddemand)reliedon,arguethiswaygenerateswealthforthemostpeople
(1) FriedrichHayek(govt=malint.)andMiltonFriedman
3. Statedirectedcapitalismhadpoliticaleliteandeconomicelitepartnership
a) Econ.elitescouldhavebusinesses,govtsetpriorities,sostatedidntcentralizeornationalizeecon.,tradeunionsoutlawed,
limitedworkersrights
B. Communism(SovietUnion,mostofEasternEurope,mainlandChina,NorthKorea,Cuba,Vietnam,others)
1. Goaltoridofprofitmotive,eliminateprivatepropertyandtrade,andnationalizetheeconomy
2. Cometopowerbyrevolution,sustainpowerbydictatorshipusually
3. Haveambitiousprojectstomodernize,includescollectivization(ofagr.)andstatesponsoredindustrialization
a) StalinsFirstFiveYearplanandZedongsGreatLeapForward
b) Causedfamines,killedlotsofpeople,putstressoneconomyandsoc.life,usedprisoncamplabor
4. SomenotextremistlikeinVietnamandpostZedongChina
C. Socialism(middleorthirdwayecon.s)
1. Emphasisoncentralplanning,someecon.nationalized,noconcernonp.p.andsuccessfulifmild
2. Somelessdevusedsocialismtobuildwealth/spurdev
BoomandBust:TowardstheGreatDepressionandBrettonWoods
A. LongDepression(early1870smid1890s)
1. Econrecoveryandfreetradereboundedcountries,butWW1hurtEuroeconomies
2. NorthAmexenrichedbyWW1,causedroaringtwenties,thenallnationsstatedtogreatlyindustrialize
B. TheGreatDepression
1. WorldeconomydependedheavilyonU.S.,andU.S.stockmarketcrashedOct.,1929,everyonehurtbythis
2. U.S.inst.austeritymeasures,decreaseinconsumerconfidence,causedrunonbanks,ledtomassunemployment(upto25%)
3. U.SspreadDepressiontorestofworld,hightariffsonnationsgoods.theycouldntexportproducts,SmootHawleyActof1930,
triedtoprotectU.Seconomy
4. USSRuntouchedbyDep.,limitedconnxwithEest,peoplesawcommunismassuperior
5. Publicworksprojects,socialwelfare,militaryconscriptionandarmsbuildup(usedbyfascists)wereecon.Reactions,Ex.President
FDRsNewDealof1933
6. WW2damagedmostecon.s,Sovietseconomydevotedtofighting,U.S.rebuiltworldeconomy
7. Jul.1944,AlliescreatedWorldBankandIMF,alsocreatedGATT
RegionalizationandGlobalizationAfterWorldWarII
A. EconomicUnion(calledEuropeanEconomicCommunity,ortheCommonMarket(predecessortotheEuropeanUnion))
1. CreatedtorecoverWesternEuropeseconomy
2. Investedinsocialwelfaresystems,whichusuallygaveuniversalhealthcare,cheapcollege,etc.
3. Fastreconstruction,assistedbyMarshallPlan(initiatedbyU.S.)
B. RestoftheWorld
1. LatinAmexandAfricastillreliedonsmallexportgoods,MiddleEastcountriesapartofOPEC,didwellbecauseofoildominance
2. SovietsandChinamostlyisolatedfromWest,JapanandrestofPRadaptedtoglobalcapt.
C. IndustrializationtoPostIndustrializationandthe1970s
1. Basedonhighservice,andhightech
2. Econ.crisisthroughoutdecade,OPECs1973oilembargoreallyhurtenergydep.Econ.s,andlotsoffluxineconomy(stagflation),
hardtomaintainwelfaresys
3. G7createdtocoordinateecon.policiesthatbenefitedmembers(GB,US,F,WG,I,J,C)
4. Westsoughtfreemarketreforms,institutedprivatizationofnat.econ.Sectors,govtspendingreduced,causedlayoffs
5. Econ.growth,wealthmovedtocorporateelites
D. EconomicGlobalization
1. Influenceofmultinat.corpsgrewhavefactories,subs.inothercountries,ex.McD,Coca,involvedin...
2. Taxsheltering(moveassetstolow/notaxplace),relocation/outsourcing,exploitationoflabor,someenvi.problems
3. CausedcreationofIEOsandREOs(int./reg.econ.org.)likeG8,WTO,NAFTA,APEC,SCM(Mercosur),AFTZ,EU(createdeuro,
andallowedfreemovtofgoods,$,labor)
4. Econ.globogeneratesgreatwealthinplaces,andfreetradesustainspeace,butecon.Canbeunstable,andagr.,hurt(farmers<cheap
goods),negativetrendsinonecountrycanhurtalotofothers,individualecon.policies<>globo.org.policies