Governments and Economies of the World

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)

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

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

Socialism Government’s goal is to make everyone in society

equal (usually forced) Trying to get rid of uneven classes

Gov’t makes 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

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

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.

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 workSocialism does not need to have Communism

Economic Terms Currency

Arabic Countries Dinar

Australia Dollar

China Renminbi

Europe Euro

India Rupee

Japan Yen

Mexico Peso

UK Pound

US Dollar

$

¥

€Rp

¥

$ or Mex$

₤

$

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

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%

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

Measuring & Comparing Economies

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

World $52,621,403,000,000

1 United States $14,660,000,000,0002 China $10,090,000,000,0003 Japan $4,310,000,000,0004 India $4,060,000,000,0005 Germany$2,940,000,000,0006 Russia $2,223,000,000,0007 United Kingdom $2,173,000,000,0008 Brazil $2,172,000,000,0009 France $2,145,000,000,00010 Italy$1,774,000,000,000

GDP (World’s Top 10; 2010)

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

176 Ethiopia $ 845

177 Madagascar $ 816

178 Eritrea $ 799

179 Central African Republic $ 706

180 Niger $ 591

181 Somalia $ 547

182 Liberia $ 491

183 Burundi $ 471

184 Zimbabwe $ 412

185 Democratic Republic of Congo $ 296

GDP Per Capita (Bottom 10)

From University of Pennsylvania

Communism

Capitalism

Socialism Democracy

Things common to both Communism and

Capitalism

Things common to both Socialism and Democracy

Things common to both Capitalism and Democracy

Things common to both Communism and Socialism

Prices set by market

Supply and Demand

Works with Democracy

Free Enterprise

Get rid of classes

Needs Socialist gov’t

Never works practically

‘Solution’ to Capitalism

Gov’t runs the market

Citizens vote for gov’t

“Western style gov’t”

Free elections

Direct vs. Indirect

Goal = equality

Private business banned

Corruption

Paid for through taxes

Economic systems

Political Systems

Don’t need Communism

Goal = freedom

Works together

People run everything

Private business allowed

Often a dictatorship

Provides services to people

Gov’t makes decisions

Works with Communism

CapitalismCommunism

Socialism Democracy

Things common to both Communism and

Capitalism

Things common to both Socialism and Democracy

Things common to both Capitalism and Democracy

Things common to both Communism and Socialism

Private businessSupply and DemandMarket/businesses makes decisionsFreedom of choicesCreates classesWorks w/ demc’y

Gov’t runs economyPeople forced to stayDoesn’t work on lg scaleKarl MarxLimited freedomsWorks w/ Socialism

Voting for gov’tPeople run the gov’tDirect vs. Indirect

Goal is equality

Economic systems

Political systems

Don’t need Communism

Work togetherFree choicesClasses allowedPeople run it all

Don’t need CommunismProvides services to peopleGov’t pays for stuffHigher taxes to pay for stuff

CapitalismCommunism

Socialism Democracy

Things common to both Communism and Capitalism

Things common to both Socialism and Democracy

Things common to both Capitalism and Democracy

Things common to both Communism and Socialism

Free MarketPrivate ownershipPeople decide everythingSupply and DemandFree choice - economically

Karl Marx‘Solution’ to CapitalismNo private businessGov’t controls economyNeeds Socialism to workUsually needs dictator

People decide – votingCitizen control gov’tFree electionsDirect vs. IndirectPower is spread out“Western Style Gov’t”

Goal is to make everyone equal

Economic systemsNeed taxes

Political systems

People power

Gov’t owns everything (no private)Gov’t decides everythingSystems are nationalizedNo private ownership of prop.Taxes pay for everything

CapitalismCommunism

Socialism Democracy

Things common to both Communism and Capitalism

Things common to both Socialism and Democracy

Things common to both Capitalism and Democracy

Things common to both Communism and Socialism

Market decides thingsSupply and DemandWorks with DemocracyPrivate businesses!!!!!“Free Market”

Gov’t owns businessGov’t controls economyImpractical in large scaleNo private businessGov’t decides everything‘Solution’ to capitalismForced to stay in country

Free voting/electionsCitizens control gov’tMore rightsPeople have a sayDirect vs. Indirect“Western Style Gov’t”Most used type of gov’t

Goal is equality

Economic Systems

Taxes finance thingsPolitical systems

Free choicesPeople decide stuffLess gov’t controlFree to leave

Not as forcefulGov’t owns propertyGov’t provides everythingGov’t decides everything politically100% = dicatorshipTaxes pay for everything