Governments and Economies of the World

1. Governments and Economies of the World

2. Political Systems • Dictatorship • Control of the government: One person / a small group • Voting: None • Very few freedoms and choices • No free speech, free media, freedom of religion, etc. • Examples: Iran, Vietnam, China, Cuba, Saudi Arabia Totalitarianism • Extreme form of dictatorship • Government has total control of your life • Examples: (Fascism & Nazism; Hitler, Stalin, North Korea)

3. Democracy • Control: Citizens control the government through voting and serving in the government • Voting: Free elections, open participation • Referred to as a “Western-style government” • Two types: • Direct Democracy: The people make all of the actual decisions • Examples: Ancient Greece (Athens), no modern national examples • Indirect Democracy: The people elect others to make the decisions • Examples: US, Western Europe…most countries in world

4. Monarchy • Control: Monarch (king or queen) maintains power • Power kept within the family • Two types: • Constitutional Monarchy: Monarch has limited power; shares power with an elected body: Parliament • Democratic government • Examples: UK, Spain, Netherlands, Nepal, Japan • Absolute Monarchy: Monarch holds all the power; no citizen control • “Dictatorship” • Example: Saudi Arabia, Brunei, Oman

5. Socialism • Government’s goal is to make everyone in society equal (usually forced) • Trying to get rid of uneven classes • Gov’tmakes decisions for society to keep everyone equal (Big Brother) • Provides most services for people so everyone has them (health care, education, retirement, etc.) • Different ‘levels’ of socialism • Entire government is socialized • China, Cuba, USSR • Some systems in non-socialist gov’ts can be ‘socialized’ • US – Social Security, education • Canada, France, Sweden – Health care Usually CommunistUsually a dictatorship

6. Economic Systems • Capitalism • Prices are set by the market • Supply and Demand determines market decisions • Wages, prices, what to sell, popular vs. unpopular goods/services, etc. Also known as: Market Economy, Free-Market, Free Enterprise Works with: Democracy

7. Communism • Created to be an ‘solution’ to capitalism: • Problem: Capitalism creates unfairness, inequality in society • Owners don’t ‘do’ anything and make lots of money • Workers do all the work and make a lot less • Solution: Government owns all business, means of production; workers get the ‘extra’ money • Goal: Make everyone economically equal • Government makes all market decisions • What is made/sold, prices, wages, jobs, etc. so everyone is ‘equal’ • Eliminates classes • No private business allowed • Prices are kept artificially low so everyone in society can afford goods • Leads to shortages, corruption, etc.

8. Est. by Karl Marx’s Communist Manifesto (1848) Also known as: Command Economy Followers: Communists, Marxists Only works with: Fully socialized countries Countries: USSR, China, Vietnam, Laos, N. Korea, Cuba Communism must have Socialism to work Socialism does not need to have Communism

9. Economic Terms Arabic Countries Dinar • Currency Australia Dollar $ China Renminbi ¥ Europe Euro € Rp India Rupee Japan Yen ¥ Mexico Peso $ or Mex$ UK Pound ₤ US Dollar $

10. Recession • A minor/short-term slow-down of the economy • Caused by inflation, drop in stock market, high unemployment, outside shock (war, spike in price of oil, etc.) • Depression • A severe or long-term slow-down of the economy • Can take years to recover

11. Inflation • When the price of goods increase • Measured by comparing what a set number of products cost over time. • Causes • Drop in supply of major goods • Too much currency in the system • Effects • People cannot afford what they used to • Unemployment increases • Economic recession or depression • Value of currency plummets • Savings and currency lose value US = 1.24%

12. Measuring & Comparing Economies • GNP (Gross National Product) • Total value of goods produced by a nation both inside and outside the country (by companies who are based there) • US gets all credit for all US-based companies, despite where the stuff is actually made • Used to indicate the overall wealth of a nation • GDP (Gross Domestic Product) • Total value produced inside a country (by any company producing items in that country) • US gets credit for all stuff made in US, despite where it’s based • Used to indicate the productivity of a nation • GDP per capita: Total GDP ÷ population • Used to compare countries fairly; ‘evens’ out population

13. Example: • Bottling plants in US, Mexico, France and India • US GNP counts… • US GDP counts… • France’s GDP counts… • Other ways to economically compare nations: • Industrialization Infrastructure • Literacy rate  Telecommunications • Workforce usage  Poverty line/unemployment rate You can tell how well off a country is by what these categories look like for the country All of the Coca-Cola produced worldwide All of the Coca-Cola produced in US All of the Coke produced in France

14. GDP (World’s Top 10; 2010) World$52,621,403,000,000 1 United States $14,660,000,000,000 2 China$10,090,000,000,000 3 Japan$4,310,000,000,000 4 India$4,060,000,000,000 5 Germany $2,940,000,000,000 6 Russia $2,223,000,000,000 7 United Kingdom$2,173,000,000,000 8 Brazil$2,172,000,000,000 9 France$2,145,000,000,000 10 Italy $1,774,000,000,000

15. 1 Qatar$142,848 2 Luxembourg$92,297 3 UAE$70,520 4 Brunei$63,455 5 Singapore$59,871 6 Norway$58,715 7 Kuwait$51,947 8 Australia$49,460 9 United States$46,569 10 Switzerland$5,397 11 Netherlands$42,594 12 Canada$42,591 13 Austria$42,489 14 Sweden$41,138 15 Iceland$40,381 GDP Per Capita (Top 15; 2010) From University of Pennsylvania

16. GDP Per Capita (Bottom 10) 176Ethiopia$ 845 177Madagascar$ 816 178Eritrea$ 799 179Central African Republic$ 706 180Niger$ 591 181Somalia$ 547 182Liberia$ 491 183Burundi$ 471 184 Zimbabwe$ 412 185Democratic Republic of Congo$ 296 From University of Pennsylvania

17. Communism Capitalism Things common to both Communism and Capitalism Things unique to Capitalism Things unique to Communism Get rid of classes Needs Socialist gov’t Never works practically ‘Solution’ to Capitalism Gov’t runs the market Prices set by market Supply and Demand Works with Democracy Free Enterprise Economic systems Things common to both Communism and Socialism Things common to both Capitalism and Democracy Goal = freedom Works together People run everything Private business allowed Goal = equality Private business banned Corruption Paid for through taxes Often a dictatorship Provides services to people Gov’t makes decisions Works with Communism Citizens vote for gov’t “Western style gov’t” Free elections Direct vs. Indirect Political Systems Don’t need Communism Things common to both Socialism and Democracy Things unique to Democracy Things unique to Socialism Socialism Democracy

18. Communism Capitalism Things common to both Communism and Capitalism Things unique to Capitalism Things unique to Communism Gov’t runs economyPeople forced to stayDoesn’t work on lg scaleKarl MarxLimited freedomsWorks w/ Socialism Private businessSupply and DemandMarket/businesses makes decisionsFreedom of choicesCreates classesWorks w/ demc’y Economic systems Things common to both Communism and Socialism Things common to both Capitalism and Democracy Work togetherFree choicesClasses allowedPeople run it all Goal is equality Don’t need CommunismProvides services to peopleGov’t pays for stuffHigher taxes to pay for stuff Voting for gov’tPeople run the gov’tDirect vs. Indirect Political systems Don’t need Communism Things common to both Socialism and Democracy Things unique to Democracy Things unique to Socialism Socialism Democracy

19. Communism Capitalism Things common to both Communism and Capitalism Things unique to Capitalism Things unique to Communism Karl Marx‘Solution’ to CapitalismNo private businessGov’t controls economyNeeds Socialism to workUsually needs dictator Free MarketPrivate ownershipPeople decide everythingSupply and DemandFree choice - economically Economic systemsNeed taxes Things common to both Communism and Socialism Things common to both Capitalism and Democracy People power Goal is to make everyone equal Gov’t owns everything (no private)Gov’t decides everythingSystems are nationalizedNo private ownership of prop.Taxes pay for everything People decide – votingCitizen control gov’tFree electionsDirect vs. IndirectPower is spread out“Western Style Gov’t” Political systems Things common to both Socialism and Democracy Things unique to Democracy Things unique to Socialism Socialism Democracy

20. Communism Capitalism Things common to both Communism and Capitalism Things unique to Capitalism Things unique to Communism Gov’t owns businessGov’t controls economyImpractical in large scaleNo private businessGov’t decides everything‘Solution’ to capitalismForced to stay in country Market decides thingsSupply and DemandWorks with DemocracyPrivate businesses!!!!!“Free Market” Economic Systems Things common to both Communism and Socialism Things common to both Capitalism and Democracy Free choicesPeople decide stuffLess gov’t controlFree to leave Goal is equality Not as forcefulGov’t owns propertyGov’t provides everythingGov’t decides everything politically100% = dicatorshipTaxes pay for everything Free voting/electionsCitizens control gov’tMore rightsPeople have a sayDirect vs. Indirect“Western Style Gov’t”Most used type of gov’t Taxes finance thingsPolitical systems Things common to both Socialism and Democracy Things unique to Democracy Things unique to Socialism Socialism Democracy