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1、International Business 7e by Charles W.L. Hill,McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.,Chapter 2 National Differences in Political Economy,Political Systems,The political economy of a nation refers to how the political, economic, and legal systems of
2、a country are interdependent; they interact and influence each other, and in doing so they affect the level of economic well-being,Political Systems,Political system refers to the system of government in a nation Political systems can be assessed according to two dimensions the degree to which they
3、emphasize collectivism as opposed to individualism the degree to which they are democratic or totalitarian,Collectivism And Individualism,Collectivism refers to a political system that stresses the primacy of collective goals over individual goals Collectivism can be traced back to the Greek philoso
4、pher, Plato (427-347 BC), but in modern times, collectivism is equated with socialists,Collectivism And Individualism,Socialists advocate state ownership of the basic means of production, distribution, and exchange State-owned enterprises are managed to benefit society as a whole, rather than indivi
5、dual capitalists In the early 20th century, socialism split into: Communism socialism can only be achieved through violent revolution and totalitarian dictatorship Social democrats socialism is achieved through democratic means,Classroom Performance System,A political system that stresses the primac
6、y of collective goals over individual goals is called a) individualism b) collectivism c) a democracy d) a market economy,Collectivism And Individualism,By the mid-1990s, communism was in retreat worldwide Social democracy is also retreating as many countries move toward free market economies State-
7、owned enterprises have been privatized,Classroom Performance System,_ believe (s) that socialism can only be achieved through violent revolution and totalitarian dictatorship. a) communists b) social democrats c) social republicans d) Plato,Collectivism And Individualism,Individualism refers to phil
8、osophy that an individual should have freedom in his own economic and political pursuits Individualism can be traced to Greek philosopher, Aristotle (384-322 BC), who argued that individual diversity and private ownership are desirable Under individualism, individual economic and political freedoms
9、are the ground rules on which a society should be based More practically, individualism means democratic political systems and free market economies,Democracy And Totalitarianism,Democracy refers to a political system in which government is by the people, exercised either directly or through elected
10、 representatives Totalitarianism is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties Democracy is usually associated with individualism and communism is usually associated with collectivism
11、and totalitarianism,Democracy And Totalitarianism,Pure democracy is based on the belief that citizens should be directly involved in decision making Most modern democratic states practice representative democracy where citizens periodically elect individuals to represent them,Classroom Performance S
12、ystem,A form of government in which one person or political party exercises complete control over all spheres of human life and prohibits opposing political parties is a) a democracy b) a representative democracy c) totalitarianism d) socialism,Democracy And Totalitarianism,There are four major form
13、s of totalitarianism: Communist totalitarianism found in states where the communist party monopolizes power Theocratic totalitarianism - found in states where political power is monopolized by a party, group, or individual that governs according to religious principles Tribal totalitarianism - found
14、 in states where a political party that represents the interests of a particular tribe monopolizes power Right-wing totalitarianism - permits some individual economic freedom, but restricts individual political freedom,Classroom Performance System,_ is found in states where political power is monopo
15、lized by a party according to religious principles. a) tribal totalitarianism b) right-wing totalitarianism c) theocratic totalitarianism d) communist totalitarianism,Economic Systems,Political ideology and economic systems are connected In countries where individual goals are emphasized free market
16、 economies are likely There are three types of economic systems: market economies command economies mixed economies,Market Economy,In a market economy all productive activities are privately owned and production is determined by the interaction of supply and demand The role of government is to encourage free and fair competition between private producers,Command Economy,In a command economy, the government plans the goods and services that a country produces,
