Political Economy and Ethics Written Report (Group 6) PDF

ANARCHISM include authoritarian regimes such as POLITICAL ECONOMY - It is the belief that only individuals communism and fascism. Political economy is the study of how and private groups should control a n...

ANARCHISM include authoritarian regimes such as POLITICAL ECONOMY - It is the belief that only individuals communism and fascism. Political economy is the study of how and private groups should control a nation’s a country manages its affairs by using its political activities. PLURALISM political, economic, and legal systems. The A cluster of doctrines and attitudes - It is the belief that both private and term political economy is derived from the centered on the belief that government is public groups play important roles Greek polis meaning “city” or “state”, and both harmful and unnecessary. Anarchist in a nation’s political activities. oikonomos which means “one who manages thought developed in the West and spread Pluralism assumes that diversity is a household or state”. Any nation’s political throughout the world, principally in the beneficial to society and that autonomy economy reflects how its people put their early 20th century. Derived from the Greek should be enjoyed by disparate functional or preferred political, economic, and legal root anarchos meaning “without authority,” cultural groups within a society, including theories into practice and the institutions anarchism, anarchist, and anarchy are used religious groups, trade unions, professional they create. to express both approval and disapproval. organizations, and ethnic minorities. An anarchist views public government as Pluralistic political systems include I. POLITICAL SYSTEMS unnecessary and unwanted because it democracies, constitutional monarchies, and A political system includes the tramples personal liberties. some aristocracies structures, processes, and activities by II. ECONOMIC SYSTEMS which a nation governs itself. A country’s TOTALITARIANISM A country’s economic system consists political system is rooted in the history and – It is the belief that every aspect of of the structure and processes that it uses to culture of its people. Factors such as people’s lives must be controlled for a allocate its resources and conduct its population, age and race composition, and nation’s political system to be effective. It is commercial activities. Every economy per capita income influence a country’s a form of government that attempts to assert displays a tendency toward individualist or political system. There are three political total control over the lives of its citizens. It is collectivist economic values that reflects the ideologies: Anarchism, Totalitarianism, and characterized by strong central rule that nation’s culture. There are three types of Pluralism. attempts to control and direct all aspects of economic system: a Centrally Planned individual life through coercion and Economy, Mixed economy and Market THREE POLITICAL IDEOLOGIES repression. Totalitarian political systems Economy.  over-investment. Busts, where demand A mixed economy is a system in CENTRALLY PLANNED ECONOMY drops, businesses fail, and unemployment which land, factories, and other economic A centrally planned economy, also rises, resulting in economic recessions or resources are rather equally split between called a command economy, is an economic depressions. private and government ownership. In a system in which the government or central mixed economy, the government owns fewer authority makes all decisions regarding the Focus On Equality economic resources than does the production, distribution, and consumption – The government can ensure that basic government in a centrally planned economy. of goods and services. In this system, the needs like healthcare, education, and Yet in a mixed economy, the government determines what goods and housing are provided universally, promoting government tends to control the economic services will be produced, how much will be social equity. sectors that it considers important to produced, and at what price they will be national security and long-term stability. offered to consumers. Central planning DISADVANTAGES OF A CENTRALLY Both private individuals and the government agencies specify production goals for PLANNED ECONOMY own and control resources in the mixed factories and other production units, and economy. The private sector operates they even decide prices. The primary goal is Lack of Innovation: businesses, while the government may own to allocate resources in a way that meets the – Without competition or profit incentives, or regulate key industries, especially those collective needs of society, often emphasizing there is often little motivation for innovation providing essential services like healthcare, equity, social welfare, and stability over or improving efficiency. transportation, and utilities. market-driven competition. Shortages and Surpluses: ADVANTAGES OF MIXED ECONOMY ADVANTAGES OF CENTRALLY PLANNED – Because production and distribution are Balance Between Efficiency and Welfare: ECONOMY centrally controlled, it can lead to – A mixed economy leverages the efficiency Economic Stability mismatches between what is produced and and innovation of the private sector while – A centrally planned economy can what consumers need or want, resulting in using government intervention to promote potentially avoid the volatility and cycles of shortages of goods or excess supply. social welfare, reduce poverty, and provide boom and bust seen in market economies. essential services. Booms, where high demand drives up MIXED ECONOMY Consumer Freedom and Choice: production and prices, often leading to – Consumers enjoy a wide variety of goods demand. Private sectors are the one who DISADVANTAGES OF MARKET ECONOMY and services offered by the private sector. At making decisions when it comes to what to Income Inequality: the same time, they benefit from public produce, how to produce, and for whom to Market economies can lead to significant goods and services provided by the produce. Supply is the quantity of a good or income disparities, as individuals with more government. service that producers are willing to provide resources, skills, or access to capital can at a specific selling price. Demand is the accumulate wealth, while others may DISADVANTAGE OF MIXED ECONOMY quantity of a good or service that buyers are struggle. Economic Instability: Tax Burden: willing to purchase at a specific selling price. – To fund public services and social welfare In this type of economy government has a Market economies are susceptible to programs, mixed economies often rely on limited role and they intervene when it economic cycles, including periods of boom taxation. High taxes can discourage comes to property rights, contracts, and also and bust, leading to recessions, investment and reduce the disposable to ensure fair and competitive environment. unemployment, and inflation. income of individuals and businesses. – Government intervention can sometimes ADVANTAGES OF MARKET ECONOMY III. LEGAL SYSTEMS lead to excessive bureaucracy and Innovation: inefficiency. For example, heavily regulated – The competition and profit motive A country’s legal system is its set of industries may face slow decision-making encourage businesses to innovate, leading to laws and regulations, including the processes and administrative costs. the development of new products, services, processes by which its laws are enacted and and technologies that can improve the enforced and the ways in which its courts MARKET ECONOMY standard of living hold parties accountable for their actions. A In a market economy, the majority of Consumer Choice: country’s political system also influences its a nation’s land, factories, and other – A market economy offers consumers a legal system. Political systems and legal economic resources are privately owned, wide variety of goods and services. systems, therefore, are naturally interlocked. either by individuals or businesses. This Consumers can choose products that best Legal systems are frequently influenced by means that who produces what and the meet their needs and preferences, which political moods and upsurges of prices of products, labor, and capital in a drives producers to continually improve nationalism— the devotion of a people to market economy are determined by the their offerings. their nation’s interests and advancement. interplay of two forces which are supply and  Common Law importance of protecting IP was first - It is a legal system based on a - A legal system based on religious recognized in the Paris Convention for the country’s legal history (tradition), past teachings. Protection of Industrial Property (1883) cases that have come before its courts - It is a form of government which (Paris Convention) and the Berne (precedent), and how laws are applied defers not to civil development of law, but to Convention for the Protection of Literary and in specific situations (usage). an interpretation of the will of a God as set Artistic Works (1886) (Berne Convention) - Common law is a body of unwritten out in religious scripture and authorities. The Convention Establishing the World laws based on legal precedents Law in a theocracy must be consistent with Intellectual Property Organization (1967) established by the courts. Common religious text the ruling religion abides by. In provides the lists of protected by IP rights: law influences the decision-making a theocracy, the courts are usually presided process in unusual cases where the over by religious officials, who are taken as literary, artistic and scientific works; outcome cannot be determined based more versant in the applicable legal texts. performances of performing artists, on existing statutes or written rules of phonograms and broadcasts; law. Islamic Law inventions in all fields of human – Commonly referred to as Shariah, endeavor; Civil Law. governs interpersonal conduct and regulates scientific discoveries; - A legal system based on a detailed set the ritual practices of Muslims. In some industrial designs; of written rules and statutes that constitute countries it is also the governing law, while trademarks, service marks, and a legal code. other countries apply Islamic law to specific commercial names and designations; - Civil law defines the rights and areas, such as personal status or finance. protection against unfair competition; responsibilities of individuals, government and all other rights resulting entities and private or non-government IV. GLOBAL LEGAL ISSUES from intellectual activity in organizations in their interactions with each Key legal issues facing companies that are the industrial, scientific, other. A breach of a civil law right or active in international business. literary or artistic fields obligation does not usually lead to criminal processes and sanctions. ▪ INTELLECTUAL PROPERTY — is a World Intellectual Property Organization property that results from people’s (WIPO) Theocratic Law intellectual talent and abilities. The  – is an international organization Distinguish the products or services others for damage, injury, or death caused dedicated to promoting creativity and of one company from those of other by defective products. innovation by ensuring that the rights of companies. creators and owners of intellectual property Distinguish products or services from TAXATION are protected worldwide, and that inventors a given source from identical or Income and sales taxes and authors are recognized and rewarded for similar products or services from Consumption taxes their ingenuity. other sources. Value added tax (VAT)—a tax levied on each Refer to a particular quality of the party that adds value to a product ▪PROPERTY RIGHTS — is the legal rights to product or service for which a mark is throughout its production and distribution. resources and any income they generate. used Industrial Property — it includes patents Promote the marketing and sale of ANTITRUST REGULATIONS — Antitrust and trademarks, which are often a firm’s products, and the marketing and laws try to provide consumers with a wide most valuable assets. The broad provision of services. variety of products at fair prices. It has long application of the term “industrial been recognized as a primary tool for property” is set out in the Paris Copyrights — give creators of original works ensuring openness of markets to new Convention. the freedom to publish or dispose of them as competitors, so that prices for consumers o Patent is a right granted to the they choose. A copyright is typically denoted will remain as low as possible, with easy inventor of a product or process that by the well-known symbol ©, a date, and the entry of new competitors to markets. excludes others from making, using, or copyright holder’s name. selling the invention. Patents are the most V. ETHICS AND SOCIAL RESPONSIBILITY widespread means of protecting technical PRODUCT SAFETY AND LIABILITY Ethical behavior is personal behavior inventions. Once it expires, the protection in accordance with guidelines for good ends and the invention enters the public Product safety laws in most countries set conduct or morality. Ethical dilemmas are domain. standards that manufactured products not legal questions. When a law exists to o Trademarks are words or symbols must meet. guide a manager toward a legally correct that distinguish a product and its Product liability is the responsibility of action, that path must be followed. In an manufacturer. It perform (4) four main manufacturers, sellers, individuals, and ethical dilemma, there is no right or wrong functions: decision. There are alternatives, however, that may be equally valid in ethical terms – A company should adopt local depending on one’s perspective. Corporate ethics wherever it operates because social responsibility (CSR) is the practice of all belief systems are determined going beyond legal obligations to actively within a cultural context. It says that balance commitments to investors, a company’s sole responsibility is to customers, other companies, and maximize profits for its owners (or communities. shareholders) while operating within the law. Ethical Behavior – Ethical behavior involves personal actions CSR THREE LAYERS OF ACTIVITY CULTURAL RELATIVISM VIEW aligned with guidelines for good conduct and 1. Traditional philanthropy, whereby a – Recognizes that what may be morality. Ethical dilemmas involve choices corporation donates money and, perhaps, acceptable behavior in one culture may be with no clear right or wrong; alternatives are employee time toward a specific social considered unethical or inappropriate in valid depending on perspective cause. another. Embracing cultural relativism helps 2. Risk management, whereby a businesses adapt their products, services, Business Ethics company develops a code of conduct that it and marketing strategies to specific cultural – Moral principles and values that guide will follow in its global operations and agrees contexts. Recognizing and respecting ethical behavior in the business context. to operate with greater transparency. cultural preferences, values, and traditions 3. Strategic CSR, in which a business can enhance product acceptance, customer Corporate Social Responsibility (CSR) builds social responsibility into its core satisfaction, and brand loyalty. – Corporate Social Responsibility means operations to create value and build going beyond legal obligations to balance competitive advantage. RIGHTEOUS MORALIS VIEW commitments to investors, customers, other – The Righteous Moralist states that a companies, and communities. PHILOSOPHIES OF ETHICS AND SOCIAL company’s home-country standards RESPONSIBILITY of ethics should be followed globally. It claims that a multinational’s FRIEDMAN VIEW home-country standards of ethics are the appropriate ones for companies to follow in belief that every aspect of people’s lives must be Theocratic law is a system based on religious foreign countries. controlled for a nation’s political system to be teachings. effective; Pluralism—the belief that both private Firms must work hard to protect their UTILITARIAN VIEW and public groups play important roles in a property rights and intellectual property against nation’s political activities. violations of patents, trademarks, and – Its approaches to ethics hold that the A country’s economic system consists of copyrights. Companies must know product moral worth of actions or practices is the structure and processes that it uses to liability laws and taxation requirements wherever determined by their consequences. A allocate its resources and conduct its commercial they operate. Businesses need to know how company should behave in a way that activities. There are three types economic antitrust laws influence operations. maximizes “good” outcomes and minimizes system: a Centrally Planned Economy in which a Legal systems set clearly defined “bad” outcomes wherever it operates. In nation’s land, factories, and other economic boundaries for lawful individual and corporate other words, utilitarian thinkers say the resources are owned by the government; Mixed behavior, however, they are inadequate for right behavior is that which produces the economy in which land, factories, and other dilemmas of ethics and social responsibility. greatest good for the greatest number economic resources are rather equally split Although businesses can create policies between private and government ownership; regarding ethics and social responsibility, issues Market Economy where the majority of a nation’s arise on a daily basis that can cause problems ETHICS AND SOCIAL RESPONSIBILITY land, factories, and other economic resources are international managers such as: bribery and KEY ISSUES privately owned, either by individuals or corruption, working conditions and human businesses and is determined by the interplay of rights, fair-trade practices and environment Bribery and Corruption two forces, supply and demand. protection. Labor Conditions and Human Rights A legal system is a country’s set of laws Fair Trade Practices and regulations, including the processes by Environment which its laws are enacted and enforced and how its courts hold parties accountable. Common law SUMMARY is legal system based on a country’s legal history A political system includes the (tradition), past cases tried in the courts structures, processes, and activities by which a (precedent), and how laws are applied in specific nation governs itself. There are three political situations (usage). Civil law is a system based on ideologies: Anarchism—the belief that only a detailed set of written rules and statutes that individuals and private groups should control a constitute a legal code, from which flows all nation’s political activities; Totalitarianism—the obligations, responsibilities, and privileges.