世界经济概论（英文版）chapter 07 Theories and Overview

chapter07TheoriesandOverviewInthischapter,we’llcover:IntroductiontoContemporaryEconomicSystemsTheEvolutionofCapitalismTheDevelopmentofCommandEconomyFromCommandEconomiestoMarketEconomiesIntroductiontoContemporaryEconomicSystemsThreemajortypesofeconomicsystems:marketeconomyplannedeconomymixedeconomyIntroductiontoContemporaryEconomicSystemsEconomicsystemscanbeevaluatedintermsofhowefficienttheyareinachievingeconomicobjectives.Theeconomicproblem：orchestrationoftheseactivitiesintoacoherentsocialwholeIntroductiontoContemporaryEconomicSystemsMarketeconomyisalsoknownascapitalisteconomyorfreemarketeconomy.Theallocationforresourcesisdeterminedonlybymarketforces.TheroleofthegovernmentistosimplymakesurethatthemarketisstableenoughtocarryoutitseconomicactivitiesproperlyIntroductiontoContemporaryEconomicSystemsperfectcompetition:theabsenceoftheexpectedchecksandbalances.Limitationsoffreemarket:1.Freemarketignoresissuesofincomedistributionasitconcentratesonefficientflowofresourcestowardsgoodsandservicesthatconsumerswithmeansandabilitytoearnincomeswillpayfor.IntroductiontoContemporaryEconomicSystems2.Underafreemarketsystemfirmsandconsumersmaketheirdecisionsonthebasisofprivatebenefitsandcostsandsotheytendtoignoresocialcostsandbenefits.3.Argumentsforfreemarketsignorepertinentissuesofmonopolizationandmonopolypoweraswellasinadequateinformation.IntroductiontoContemporaryEconomicSystemsCriticsofmarketcapitalism:aminimal-government,laissez-faireeconomymightbeinefficientbecauseofmonopolypower,externalities,insufficientpublicgoods,imperfectinformation,andpossiblemacroeconomicinstability.IntroductiontoContemporaryEconomicSystemsPlannedeconomyissometimescalledacommandeconomy.Allmajordecisionsrelatedtotheproduction,distribution,commodityandserviceprices,ernmentdirectedmarketforceshaveverylittlesayinsuchaneconomy.IntroductiontoContemporaryEconomicSystemsMixedeconomy

Combineselementsofboththeplannedeconomyandthemarketeconomyinonecohesivesystem,inwhichthemarketmechanismplaystheroleofenergizerandcoordinator.TheEvolutionofCapitalismper-capitalistsociety:thedecision-makingmechanismrestedonahierarchyofnobility,landedgentry,noblemenandserfs.FromMercantilismtoCommercialCapitalismThe18thcenturystageiscalled“commercialcapitalism.”TheEvolutionofCapitalismAdamSmith:‘invisiblehand’Theroleofgovernment:1.theprovisionofnationaldefense2.theprotectionofeachmemberofsocietyfromtheinjusticeoroppressionofanyother3.theerectionandmaintenanceofthosepublicworksandpublicinstitutions(includingeducation)thatwouldnotrepaytheexpenseofanyprivateenterprise.TheEvolutionofCapitalismFromCommercialtoIndustrialCapitalismthepervasivemechanizationandindustrializationofitsproductiveprocesses.transformingthesocialandphysicallandscapethedevelopmentofindustrializationTheEvolutionofCapitalismFromIndustrialtoStateCapitalismstatecapitalism:theenlargementinsizeandfunctionsofthepublicrealm.theemergenceofalargepublicsectorexpectedtoserveasaguarantorofpubliceconomicwell-beingTheEvolutionofCapitalismThus,attheonsetofthe21stcentury,theconsensusontheeconomicroleofgovernmentincapitalismshiftedbackfromthesocialdemocraticinterventionismoftheKeynesiansystemandthemanagedmarketeconomiesofthe“Asiantigers”tothemorenoninterventionistmodelofAdamSmithandtheclassicaleconomists.TheDevelopmentofCommandEconomyCommandeconomydevelopedbyOttoNeurathasamethodtocontrolthehyperinflationafterWorldWarI.moderncommandsocietieshavevirtuallyallbeenorganizedinthenameofsocialismTheDevelopmentofCommandEconomyTheConceptsandEvolutionofSocialism19thcentury:socialismasameansoforchestratingamodernindustrialsystem.1917theRussianRevolutiontheNewEconomicPolicy(NEP)TheDevelopmentofCommandEconomy1930s,Stalinism,Titoism,Maoism1989attemptstotransformsocialistsystemsintomarketeconomiesNowadays,Chinapubliclyownedtownshipandvillageenterprises(TVEs)asitslargestsectorTheDevelopmentofCommandEconomyCharacteristicsofModernCommand

Economy:1.Thegovernmentcreatesacentraleconomicplanforallsectorsandregionsofthecountry.2.Thegovernmentallocatesallresourcesaccordingtothecentralplan.TheDevelopmentofCommandEconomy3.Thecentralplansetstheprioritiesforproductionofallgoodsandservices.4.Thegovernmentownsamonopolybusinessinindustriesdeemedimportanttothegoalsoftheeconomy.5.Thegovernmentcreatesthelawsthatregulateeconomicactivity.TheDevelopmentofCommandEconomyDisadvantagesofmoderncommandeconomy:therapidmobilizationoftenmeanscommandeconomiesmowdownothersocietalneeds.insteadofleadingtoefficiency,commandeconomiesoftenproducetoomuchofonethingandnotenoughofanother.TheDevelopmentofCommandEconomypricesaresetbythecentralplan,andsocan’mandeconomiesarenotgoodatstimulatinginnovation.centrallyplannedeconomiesalsohavetroubleproducingtherightexportsatglobalmarketprices.FromCommandEconomiestoMarketEconomiesProblemsinTransition1.Ownershipstructure:

Acommandsocialisteconomyisverydifferentfromamodern,capitalisteconomyintermsofownershipstructure.2.Bankingsystem3.Inflationandfinancialchaos4.IdeologyFromCommandEconomiestoMarketEconomiesToconclude,formercommandsocialisteconomiesmustestablishsystemsofpropertyrightsestablishbankingsystemsdealwiththeproblemofinflationworkthroughalongtraditionofideologicalantipathytowardthebasicnatureofacapitalistsystem.FromCommandEconomiestoMarketEconomiesStrategiesofTransition1.Stabilization.E.g.reducingbudgetdeficits,slowingdowntheincreaseofmoneysupply,andestablishingrealisticexchangerates.FromCommandEconomiestoMarketEconomies2.Economicliberalizationpermittinghouseholdsandenterprisestoconductbusinessfreely,buyingandsellingatpricessetbysupplyanddemand.theopeningupofinternationaltradetothesinglemarketFromCommandEconomiestoMarketEconomiesLessonsfromTransitionLesson1:InstitutionsmatterThefailuretoacknowledgetheroleofinstitutionsineconomicchangewasoneofthegreatshortcomingsofearlytransformationtheory.FromCommandEconomiestoMarketEconomiesLesson2:CulturemattersEconomictransformationdoesnottakeplaceinaculturalvacuum,butratherinaculturalenvironment,whichinfluencesformalandinformalinstitutions,aswellasthehabitsandbehaviorofpeople.FromCommandEconomiestoMarketEconomiesLesson3:GoodgovernancemattersGoodgovernancemeansagovernmentguaranteeingtheenforcementofinstitutions,actingimpartially,withalowdegreeofcorruption,followingapolicysendingclearsignalstomarketparticipants.Aneffectivesystemofcorporategovernancealsoisimportantforsuccessfultransition.FromCommandEconomiestoMarketEconomiesLesson4:Capitalmattersanycatching-upprocessmusttakeintoaccountthemassiveneedforbuildingnewcapitalstock.Lesson5:WealthmattersStudyQuestionsStudyQuestions1. Whatattributesdistinguishthethreemajortypesofsystems-marketeconomy,plannedeconomyandmixedeconomy?2. H