The Global Economy and Its Economic Systems

Description

Since the first edition of this book in 1975 (previously titled Comparing Economic Systems in the Twenty-First Century), this market-leading title has examined different economies in theory and practice. This edition represents a complete revision and a significant expansion of the previous (2004) edition. The authors have completely rewritten and reorganized the 21 chapters of the previous edition and included a new chapter (Chapter 12, The Europen Model). Cover......Page 1 Title......Page 2 Statement......Page 3 Copyright......Page 4 Dedication......Page 5 Contents......Page 7 Preface......Page 17 Part I: Introduction, Definition, and Measurement......Page 21 Economic Systems in Historical Perspective......Page 23 The Uneven Distribution of Economic Progress......Page 25 A Warning for Those Who Want a Simpler Life......Page 28 Economic Institutions and Economic Progress......Page 29 Some Themes for the Twenty-First Century......Page 30 The Choice of Economic Systems in the Twenty-First Century......Page 39 Summary......Page 40 Recommended Readings......Page 41 Ch 2: Definition and Classification of Economic Systems......Page 43 Economic Systems: Definition and Classification......Page 44 Characteristics of Economic Systems......Page 49 Perceptional Measures: Freedom, Corruption, Governance......Page 63 Summary......Page 64 Key Terms......Page 65 Notes......Page 68 Recommended Readings......Page 70 The Forces Influencing Economic Outcomes......Page 74 Performance Criteria......Page 76 Evaluating Performance: What Determines Success?......Page 84 Maximizing According to Constraints......Page 88 Measuring the Impact of the Economic System on Performance: Applications......Page 89 Perceptional Measures: Freedom, Corruption, Governance......Page 93 Key Terms......Page 94 Notes......Page 95 Recommended Readings......Page 96 Ch 4: How Economic Systems Change......Page 99 Reform versus Transition......Page 101 Marx’s Theory of Change......Page 102 Marxism after Marx......Page 105 Schumpeter: The Evolution of Capitalism......Page 106 Hayek’s Road to Serfdom......Page 107 The Austrian School of Mises and Hayek: The Socialist Critique......Page 108 Olson and Murrell: Critique of Socialism......Page 111 Conclusions......Page 112 Key Terms......Page 113 Notes......Page 115 Recommended Readings......Page 116 Ch 5: The Setting of Economic Systems......Page 118 Changes in the Economic Environment......Page 119 Policy and System Change......Page 122 Private versus Public Ownership......Page 126 The Role of Government: Share of Output and Income Redistribution......Page 131 Taxes and Redistribution......Page 133 Change in Socialist Economies......Page 139 The Collapse of Communism: Contemporary Transition......Page 143 Summary......Page 145 Key Terms......Page 146 Recommended Readings......Page 147 Part II: Economic Systems in Theory......Page 149 Ch 6: Theory of Capitalism......Page 151 Moral Philosophers: Thomas Hobbes, John Locke, and Adam Smith......Page 152 How Markets Work......Page 155 Rationale for State Intervention......Page 159 Growth and State Policy......Page 167 The Performance of Capitalist Economic Systems: Hypotheses......Page 168 Two Different Visions of Market Capitalism......Page 170 Summary......Page 171 Key Terms......Page 172 Notes......Page 173 Recommended Readings......Page 175 Ch 7: Theory of Planned Socialism......Page 178 Socialism: The Search for Basic Principles......Page 179 Marx and Lenin: The New Socialist State......Page 180 The Socialist Controversy: The Feasibility of Socialism......Page 185 Resource Allocation under Planned Socialism......Page 190 The Performance of Planned Socialism: Hypotheses......Page 198 Summary......Page 200 Key Terms......Page 201 Notes......Page 202 Recommended Readings......Page 204 Ch 8: Theory and Practice of Market Socialism......Page 206 Market Socialism: Theoretical Foundations......Page 208 Market Socialism: The Cooperative Variant......Page 212 Democratic Socialism?......Page 218 The Performance of Market Socialism: Hypotheses......Page 222 Key Terms......Page 223 Notes......Page 224 Recommended Readings......Page 226 Part III: Economic Systems in Practice......Page 229 Three Models of Capitalism......Page 231 Characteristics of the Three Models......Page 232 Summary......Page 246 Key Terms......Page 247 Recommended Readings......Page 248 Intellectual Foundations of the Anglo-Saxon Model......Page 249 The English Industrial Revolution......Page 250 Key Terms......Page 256 Recommended Readings......Page 257 The Rise of the United States......Page 259 Constitutional Foundations of the U.S. Economy......Page 260 Common Law and Economic Efficiency......Page 263 The Private Sector versus the Public Sector......Page 264 Business Organization......Page 266 Corporate Governance......Page 269 Capital Markets......Page 273 Regulation......Page 278 Deregulation......Page 285 The Transfer Economy......Page 288 The U.S. Federal Tax Code, Social Engineering, and the Percentage Paying Income Taxes......Page 292 Final Comments......Page 293 Summary......Page 294 Key Terms......Page 295 Notes......Page 297 Recommended Readings......Page 299 Ch 12: The European Model......Page 301 The European Union......Page 302 Intellectual Foundations of the European Model......Page 307 Legal Foundations: Civil Law......Page 312 Features of the European Model......Page 315 Public Enterprise: Nationalization and Privatization......Page 338 Unions......Page 342 Deregulation......Page 343 The Limits of Income Security......Page 345 Summary......Page 350 Key Terms......Page 352 Notes......Page 353 Recommended Readings......Page 356 Ch 13: The Asian Model......Page 359 Ideological and Theoretical Foundations......Page 360 Institutions of the Asian Model......Page 369 Summary......Page 393 Key Terms......Page 394 Notes......Page 395 Recommended Readings......Page 397 Intellectual Origins......Page 401 The Institutions of the Soviet Economy......Page 405 Planning in Theory and Practice......Page 412 Ruble Control......Page 415 Prices and Money......Page 416 Financial Planning and Money......Page 419 Labor Markets and Jobs Rights......Page 421 Market Forces: The Second Economy......Page 424 International Trade......Page 425 Economic Performance......Page 427 Summary......Page 435 Key Terms......Page 436 Notes......Page 438 Recommended Readings......Page 442 Ch 15: China: Party Dictatorship, Markets, and Socialism......Page 445 The Constitution: Is China a Socialist State or Something Else?......Page 446 The Chinese Puzzle......Page 447 The Setting......Page 448 China’s History of Revolution and Upheaval......Page 449 China’s Modernization Reform: Deng Xiaoping and His Successors......Page 454 The Chinese Economic System......Page 455 Summary......Page 483 Key Terms......Page 484 Notes......Page 485 Recommended Readings......Page 490 Part IV: Systemic Change in a Global Perspective: Transition......Page 495 Concepts and Context......Page 497 Approaches to Transition: A Retrospective of Basic Themes......Page 504 Modeling Transition: The Early Dichotomy......Page 505 Transition in a Global Setting......Page 509 Assessing Transition: Contemporary Perspectives......Page 511 A Systems Perspective......Page 512 The Framework of Transition: Theory and Evidence......Page 513 Summary......Page 514 Key Terms......Page 515 Notes......Page 516 Recommended Readings......Page 517 Explaining Patterns of Growth in Output Transition Economies......Page 521 Economic Growth and the Output Levels in Transition......Page 531 The Transition Experience in the Twenty-First Century......Page 532 Summary......Page 537 Notes......Page 538 Recommended Readings......Page 541 Privatization in Transition......Page 545 The Transition Setting......Page 551 Privatization: Assessing the Early Results......Page 554 Summary......Page 558 Key Terms......Page 559 Notes......Page 560 Recommended Readings......Page 562 Ch 19: The Macroeconomy: Fiscal and Monetary Issues......Page 565 Creating the Macroeconomy: The Early Years of Transition......Page 566 A Macroeconomic Framework......Page 567 Banking in Transition Economies......Page 576 The Transition Macroeconomy in a Turbulent Era......Page 579 Summary......Page 581 Key Terms......Page 582 Notes......Page 583 Recommended Readings......Page 584 Ch 20: Transition and the Global Economy: International Trade and Finance......Page 587 Collapse and the Early Years of Transition......Page 588 Emerging Trading Arrangements: Regional and Political Issues......Page 591 Transition and Emerging Outcomes in the Foreign Sector......Page 594 Capital Flows: Aid and Foreign Direct Investment......Page 595 Transition in a Turbulent Era......Page 598 Summary......Page 599 Key Terms......Page 600 Notes......Page 601 Recommended Readings......Page 602 Ch 21: Transition and the Safety Net......Page 604 The Labor Force in the Command Era......Page 605 Labor in the Transition Era......Page 606 Employment, Earnings, and the Safety Net......Page 608 Demographic Issues and the Safety Net......Page 610 Transition and the Social Sector......Page 612 Transition, Inequality, and Levels of Well-Being......Page 613 Summary......Page 614 Notes......Page 615 Recommended Readings......Page 617 Part V: Assessing the World Economies in a New Era: Performance......Page 619 Has Capitalism Failed? Cycles versus Secular Trends......Page 621 Economic Systems: Models and Performance......Page 622 The Past Half Century: A Helicopter View......Page 623 Other Economic Systems......Page 625 The Performance of Economic Systems: Institutional Quality......Page 629 Economic Systems and Economic Performance......Page 633 The Welfare State......Page 652 State Capitalism versus Private Enterprise......Page 656 Key Terms......Page 657 Notes......Page 658 Recommended Readings......Page 659 Glossary......Page 661 Index......Page 681