Country Differences

IN
Political Economy

Political Systems

Political Economy
that the political,
economic, and legal
systems of a country
are not independent
of each other

Collectivism
and
individualism

Collectivism
A political system that stresses the
primacy of collective goals over
individual goals.
Advocated by Plato in the
Republic.
In modern times, the Socialists
advocate Collectivism

Socialism
Trace intellectual roots to Karl Marx.
Argued that the pay of workers does
not reflect the full value of their labor.
Advocated state ownership of
production distribution, and
exchange(businesses), thereby
ensuring that workers were fully
compensated for their labor.

Two Approaches
Communists:
Socialism is achieved through
violent revolution.

Social Democrats:
Socialism is achieved through
democratic means.

Political Systems
(The system of government in a nation )

Individualism:
Opposite of Collectivism.
Individual should have freedom in
political and economic pursuits.
Advocated by Aristotle.
Private property is more highly
productive than communal property
and will thus stimulate progress

Political Systems
Hume (1711-1776)
Adam Smith (1723-1790)
John Stuart Mill (1806-1873)
Embodied in the U.S.
Declaration of Independence.

Democracy and
Totalitarianism
Democracy
Government by
the people,
exercised either
directly or
through elected
representatives.

Totalitarianism
Government in
which one person
or political party
exercises absolute
control over all
spheres of human
life and opposing
political parties
are prohibited

Democracy
Safeguards to protect a
democracy:
Right to freedom of expression, opinion,
and organization.
A free media.
Regular elections in which all eligible
citizens are allowed to vote.
Universal adult suffrage.
Limited terms for elected
representatives.

Democracy
A fair court system independent of the political system.
A nonpolitical state bureaucracy.

Relatively free access to state information .

Totalitarianism
4 major forms:

Communism
Collectivism is achieved through
total dictatorship.

Theocratic
Political power is influenced by
religious principles.

Totalitarianism
Tribal
A political party representing the interests
of a particular tribe monopolizes power.

Right-wing
Generally permits individual economic freedom,
but restricts political freedom to prevent the
rise of communism.

Economic Systems
Market Economy:
All productive activities are privately
owned.
Command Economy:
Goods and services produced, their
quantity, and prices are determined
by the government

Economic Systems
Mixed Economy:
Parts of the economy are left to private
ownership and free market mechanisms
while other sectors are state-owned and
have government planning.

State-Directed Economy:
The state plays a significant role through its
industrial policy and setting national
goals.