Center for North-American studies University of Economics, Bratislava September 30, 2010.

Center for North-American studiesUniversity of Economics, Bratislava

September 30, 2010

Introduction What is Capitalism? Capitalist Principles Myths about Capitalism Economic Crises / Crises of Capitalism

Future of Capitalism?

Private Property Freedom of Contract Rule of Law Use of Reason Personal Liberty

Voluntary exchange of Goods: Free Trade Democracy

Protect Man’s Rights

Put this Retaliatory Force under Objective Control

Freedom Equality Individualism Democracy Personal Property Laissez-Faire

Rule of Law◦ Transaction costs ◦ Lower Number of Business Deals◦ Expenses to Verify your Business Partners

Independent Judiciary◦ High degree of Trust in Legal System

Common Law vs. Civil Law (Just vs. Legal)◦ Common Law (Singapore, Australia, GBR)

Foreign Corrupt Practices Act◦ Influences also business environment in the U.S.

European Emigrants to the US Hard Working Entrepreneurial (BANKRUPTCIES) Rule of Law Can Do/Optimism Mentality American Dream Protestantism vs. Catholicism Religion (U.S. 94%, Italy 88%, France 56%,

Germany 50%)

Conservatives (C) vs. Liberals (L) debate:

Capitalism works with values (C) Winners must take care of Losers (L) Forced help hurts everybody (C) Redistribution and Regulation (L) Redistribution discourages winners from

producing and losers from trying (C)

Public Opinions (2002-2004)

Welfare State vs. Freedom of Individual◦ U.S. 34/58, GER 57/39, FRA 62/36, IT 71/24

Success in Life: External Forces vs. Individual◦ U.S 32/65, GER 68/31, IT 66/31, FRA 54/44

Economic Competition is Positive ◦ U.S. 58, Germany 49, Italy 42, France 36

Very Satisfied with Their Lives (2002-2003,%)◦ U.S. 57, Italy 16, France 14, Germany 18

Life has improved in the last 5 years◦ U.S. 49, Italy 42, France 35, Germany 22

Life will improve in the last 5 years◦ U.S. 64, Italy 53, France 41, Germany 20

Value of Free Time◦ Europe vs. America◦ Protestantism (Work is Blessing and Source of

Happiness given by God)◦ Opportunity to get rich in the U.S. is higher

Children should Learn Hard Work◦ U.S. 60, France 50, Italy 36, Germany 22

R&D Expenditures (GDP%)◦ U.S. 2.67, France 2.2%, Germany 2.51%, Italy

1.07%

Growth in Production high-tech goods (2003)◦ U.S. +419, France +242, Germany +52, Italy +69◦ Data in %

Employment◦ U.S. (1970-2003) +58.9 million◦ France, Germany, Italy + 17.6 million

Real GDP per Capita (PPP, 2002)◦ U.S. 34,000 USD◦ France 24,000 USD◦ Italy 25,000 USD

Labor Productivity◦ U.S. (1996–2003) +3.09%◦ Germany (1996-2003) +1.6%

American Capitalism is Very Positive (%)◦ Italy 39 / 43◦ Germany 32 / 58◦ France 23 / 73◦ Slovakia 52 / 40◦ Ukraine 58 / 23◦ Uzbekistan 76 / 11◦ Former Communist Countries more Positive

2010 Index of Economic Freedom◦ 1. Hong Kong, 2. Singapore, 3. Australia, 8. U.S.,

23. Germany, 64. France, 74. Italy

Economic Freedom of the World 2008◦ 1. Hong Kong, 2. Singapore, 3. new Zealand, 6.

U.S., 24. Germany, 35. France, 66. Italy

World Bank Doing Business 2010◦ 1.Singapore, 2.New Zealand 3. Hong Kong 4. U.S.

25. Germany, 31. France, 78. Italy

China Model - Free Market with Government Intervention Prevented Crises

Government Complete Control of Investments and Currency (Short Term Victory)

Corruption Imbalances in Economy Jimmy Lai: “System in China is Long-Term

Unsustainable and will Collapse”

Selfish – but results in cooperation Greedy – but increased standard of living Nationalistic – but U.S. multiethnic society Cruel – but gives hope

Source: ◦ Ayn Rand: Capitalism-The Unknown Ideal

Role of Government Moral Consequences of Economic Growth

◦ Prosperity, Happiness, Rule of Law◦ Winners and Losers

Capitalism is Amoral

“NO SYSTEM CAN SURVIVE / FUNCTION WITHOUT MORAL/ETHICAL VALUES”

2 different types of Legal Systems? Country with most positive American

Capitalism opinions? What is ranking of U.S. according to Doing

Business 2010?

Thank you for your Attention!

Ondrej [email protected]