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Capitalism: is the U.S. Number One? Ondrej Sočuvka

Capitalism: is the U.S. Number One? Ondrej Sočuvka. Center for North-American studies University of Economics, Bratislava September 30, 2010. Overview. Introduction What is Capitalism? Capitalist Principles Myths about Capitalism Economic Crises / Crises of Capitalism

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Capitalism: is the U.S. Number One? Ondrej Sočuvka

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  1. Capitalism: is the U.S. Number One?Ondrej Sočuvka Center for North-American studies University of Economics, Bratislava September 30, 2010

  2. Overview • Introduction • What is Capitalism? • Capitalist Principles • Myths about Capitalism • Economic Crises / Crises of Capitalism • Future of Capitalism?

  3. Capitalism

  4. Capitalism - Principles • Private Property • Freedom of Contract • Rule of Law • Use of Reason • Personal Liberty • Voluntary exchange of Goods: Free Trade • Democracy

  5. Capitalism – Role of Government • Protect Man’s Rights • Put this Retaliatory Force under Objective Control

  6. America – De Tocqueville • Freedom • Equality • Individualism • Democracy • Personal Property • Laissez-Faire

  7. U.S. Business Environment • Rule of Law • Transaction costs • Lower Number of Business Deals • Expenses to Verify your Business Partners • Independent Judiciary • High degree of Trust in Legal System • Common Law vs. Civil Law (Just vs. Legal) • Common Law (Singapore, Australia, GBR) • Foreign Corrupt Practices Act • Influences also business environment in the U.S.

  8. Capitalism Society - Context • European Emigrants to the US • Hard Working • Entrepreneurial (BANKRUPTCIES) • Rule of Law • Can Do/Optimism Mentality • American Dream • Protestantism vs. Catholicism • Religion (U.S. 94%, Italy 88%, France 56%, Germany 50%)

  9. Capitalism – Questions? • Conservatives (C) vs. Liberals (L) debate: • Capitalism works with values (C) • Winners must take care of Losers (L) • Forced help hurts everybody (C) • Redistribution and Regulation (L) • Redistribution discourages winners from producing and losers from trying (C)

  10. America vs. World • Public Opinions (2002-2004) • Welfare State vs. Freedom of Individual • U.S. 34/58, GER 57/39, FRA 62/36, IT 71/24 • Success in Life: External Forces vs. Individual • U.S 32/65, GER 68/31, IT 66/31, FRA 54/44 • Economic Competition is Positive • U.S. 58, Germany 49, Italy 42, France 36

  11. Life Satisfaction • Very Satisfied with Their Lives (2002-2003,%) • U.S. 57, Italy 16, France 14, Germany 18 • Life has improved in the last 5 years • U.S. 49, Italy 42, France 35, Germany 22 • Life will improve in the last 5 years • U.S. 64, Italy 53, France 41, Germany 20

  12. American Capitalism - Opinions • Value of Free Time • Europe vs. America • Protestantism (Work is Blessing and Source of Happiness given by God) • Opportunity to get rich in the U.S. is higher • Children should Learn Hard Work • U.S. 60, France 50, Italy 36, Germany 22

  13. Economic Achievements • R&D Expenditures (GDP%) • U.S. 2.67, France 2.2%, Germany 2.51%, Italy 1.07% • Growth in Production high-tech goods (2003) • U.S. +419, France +242, Germany +52, Italy +69 • Data in %

  14. Living Standards • Employment • U.S. (1970-2003) +58.9 million • France, Germany, Italy + 17.6 million • Real GDP per Capita (PPP, 2002) • U.S. 34,000 USD • France 24,000 USD • Italy 25,000 USD • Labor Productivity • U.S. (1996–2003) +3.09% • Germany (1996-2003) +1.6%

  15. American Capitalism - Opinions • American Capitalism is Very Positive (%) • Italy 39 / 43 • Germany 32 / 58 • France 23 / 73 • Slovakia 52 / 40 • Ukraine 58 / 23 • Uzbekistan 76 / 11 • Former Communist Countries more Positive

  16. World Economic Rankings • 2010 Index of Economic Freedom • 1. Hong Kong, 2. Singapore, 3. Australia, 8. U.S., 23. Germany, 64. France, 74. Italy • Economic Freedom of the World 2008 • 1. Hong Kong, 2. Singapore, 3. new Zealand, 6. U.S., 24. Germany, 35. France, 66. Italy • World Bank Doing Business 2010 • 1.Singapore, 2.New Zealand 3. Hong Kong 4. U.S. 25. Germany, 31. France, 78. Italy

  17. Capitalism - China vs. U.S. • China Model - Free Market with Government Intervention Prevented Crises • Government Complete Control of Investments and Currency (Short Term Victory) • Corruption • Imbalances in Economy • Jimmy Lai: “System in China is Long-Term Unsustainable and will Collapse”

  18. Capitalism - Paradoxes • Selfish – but results in cooperation • Greedy – but increased standard of living • Nationalistic – but U.S. multiethnic society • Cruel – but gives hope • Source: • Ayn Rand: Capitalism-The Unknown Ideal

  19. Capitalism - Future • Role of Government • Moral Consequences of Economic Growth • Prosperity, Happiness, Rule of Law • Winners and Losers • Capitalism is Amoral “NO SYSTEM CAN SURVIVE / FUNCTION WITHOUT MORAL/ETHICAL VALUES”

  20. Contest • 2 different types of Legal Systems? • Country with most positive American Capitalism opinions? • What is ranking of U.S. according to Doing Business 2010?

  21. Conclusion Thank you for your Attention! Ondrej Socuvka socuvka@cebsi.org

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