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Introduction
Are you a capitalist?
Challenging capitalism/globalization
± ³Warp-speed capitalism´
± Capitalism drags us into decadence
± ³Postmaterialist´ era
Capitalism, globalization, and
challenge the view, September 11
± Shrinking globe
± Capitalism as a threat to way of life
1-2
Purpose of the Book
The purpose of this book is to answer two questions:
1-3
2arkets and Governments
United States: capitalist, democratic
2ixed economy
± Combination of capitalism and
government
Law
± Serves as a primary method of social
control
1-4
Capitalism
Personal freedom
Private property rights
Ayn Rand¶s necessary categories of
government:
± Police
± Armed services
± Law courts
1-5
Privatization in America and Abroad
Contracting out where government, in
effect, turns over a portion of its
duties, such as garbage collection to
a private firm
The sale or lease of public assets,
such as an airport, to a private party
Can the market met decisions more
efficiently and effectively than
government while also maximizing
personal freedom?
1-6
Privatization (continued)
Examples of privatization:
± Toll roads and congestion pricing
± Golf courses
± Schools
Pros of privatization:
± Substantially reduced costs
± Improved expertise
Cons of privatization:
± 2oving too fast
± Selling assets too cheaply
± Lost jobs
1-7
Collectivism
Communism
± Core promise of economic justice for all
Socialism
± Liberty
± Social welfare
± Fulfilling work
± Community
± Equality
± Rationality
1-8
China - Economics
Nation of 1.3 billion people aggressively
competing around the globe
400 million people lifted out of poverty
since the late 1970¶s
Stunning levels of environmental pollution
Stock market manipulation
Piracy and unsafe goods
Gap between China¶s rich and poor
estimated to be the world¶s largest
Instituting significant corrective measures
1-9
China - Politics
Dictatorship governed by the
Communist Party
Communist Party controls all media
Hundreds of thousands of Chinese
confined to labor camps
Progress: peaceful transition of power
in 2004
Democracy not in China¶s near future
1-10
Russia - Economics
2oscow has embraced consumer
capitalism
Gross domestic product up 7 percent
annually
Personal income up 8 percent
annually
Stock market up 10 percent annually
Russia remains a relatively poor
nation
1-11
Russia - Politics
State controlled companies in 2006
represented 38 percent of the nation¶s
stock market capitalization, up 22
percent from the previous year
Russia is creating large corporations
owned or substantially controlled by
the state
Bribery and corruption in both
government and the private sector are
common practice
1-12
A 2ixed Economy
Communism has failed
Socialist principles are discredited
A ³third way´
1-13
Sweden
Higher life expectancy compared to
the U.S. (80.5 years vs. 77.5 years)
Higher tax rate compared to the U.S.
(50.1 % of GDP vs. 28.2% of GDP)
Comparatively low corporate taxes
Among the strongest economic
performers in the world
Wise government spending key
ingredient
1-14
American Capitalism in Europe?
Globalization has put pressure on
some European states to trim their
welfare policies
³Cowboy capitalism´ vs. ³coordinated,
stakeholder capitalism´
Quantity of wealth vs. quality of life
1-15
America¶s Economic Future
Capitalism?
2ove closer to the welfare state?
Develop new model?
Is our American system fair?
1-16
verall Quality of Life ± U.S. Rankings
12th in the world for overall quality of life
± Ranked well on economic measures, but not on
social measures
7th in GDP per capita
45th in life expectancy
43rd in infant mortality
1st in producing prisoners
7th in the percentage of young people who
finish college
1-17
Good News and the Gap
America is among the most generous
of global cultures
In 2005, the wealthiest 1% of
Americans earned 21.2% of all
income (up 19% from 2004)
The per capita income gap has nearly
doubled since 1980
Upward mobility has not changed
significantly in the past three decades
1-18
Community
U.S. lives are increasingly solitary,
distant, alone, and unshared
Even trivial exposure to money
changes our goals and behaviors
Spending money on others rather
than yourself increases happiness
Increasing evidence of declining
social connections
³Social capital´
1-19
Too 2uch Capitalism? or Too Little?
The EU Dream
± Emphasis on inclusivity, diversity,
sustainable development, and
interconnectedness
The Bill Gates Dream
± ³Creative capitalism´
± Innovative thinkers should think about
the needy
1-20