Comparative Economics - Chapter 1

This is the first week of classes at the University of Central Oklahoma (UCO).  I have the honor of teaching three courses during this semester:  Comparative Economics, Social Issues in Economics, and International Business Communications.

In my comparative economics class we're covering chapter 1 of our text, Comparative Economics in a Transforming World Economy. 

Here are some of the highlights of our discussion:

• Was Francis Fukuyama's bold prediction that the end of the Cold War meant the end of any real challenge to the American model of political economy as well as any meaningful competition between alternative forms of political and economic systems correct?
• There are six "frameworks" that can be used to effectively classify economies:
• Allocation Mechanisms:  Traditional, Market, or Command
• Forms of Ownership:  This concerns who owns the means of production - the state; private individuals and firms, or organized religious groups
• The Role of Planning:  Planned or Market (their does exist some combinations of the two)
• Types of Incentives:  Material or Moral
• Income Redistribution:  Ludwig Von Mises vs. John Rawls
• Politics & Ideology:  Does Redistribution lead to some form of command socialist dictatorship? Are market capitalism & democracy inexorably linked?

•  Here are 9 Criteria for evaluating Economies:
• Level of Output
• Growth Rate of Output
• Composition of Output
• Static Efficiency
• Dynamic Efficiency
• Macroeconomic Stability
• Economic security of the individual
• Degree of equality of income and wealth distribution
• Degree of freedom of the individual

Obviously, some of these criteria can be seen as conflicting with others (the higher the degree of individual freedom, the less income/wealth equality tend to be, for example).

An interesting question that arises from this chapter relates to the author's presumption that the democratic process is, by definition, anti-dictatorial.  Is it true that democracy is a guarantee against dictatorship? 

Also, how central to rational market calculation is the profit motive? 

I'm looking forward to our discussion this evening.