Theoretical Implications of Democrätic Centralism

Total Page:16

File Type:pdf, Size:1020Kb

Theoretical Implications of Democrätic Centralism THEORETICAL IMPLICATIONS OF DEMOCRÄTIC CENTRALISM In this chapter, my aim is to bring together the themes discussed in 1978-1981 under the topics of democratic centralism, anarchism, and bureaucratism. Based on the press discussion, I will construct a comprehensive theory of democratic centralism in this chapter. In addition, I will use earlier Western research to evalu- ate the theory and to put my findings into a historical perspective. Strictly speaking, there are three analytically distinct elements in the theory of democratic centralism: democratic centralism in the Party, the mass line, and the comprehensive theory of democratic centralism. Democratic centralism in the Party refers to democratic centralism in the original Leninist parlance: open dis- cussion before decision making and united implementation after the decision is made. The mass line, then, describes the grassroots level dialogue between a cadre and the masses and the interaction between policies formulated by higher-levei organs and popular initiative. Democratic centralism as a theory not only includes both of these conceptions,l but also deals with the complexity of the relations within decision-making and implementation processes. Below I refer to this com- prehensive theory, unless otherwise specified. The exact meaning of democratic centralism in chinese parlance is compre- hensible: it refers to the dialectical process of decision making consisting of popular input, decision making, and implementation. Democracy in democratic centralism involves popular initiative in both decision making and implementation. Centralism, then, could refer either to the leadership functions in democracy' the processes of decision making, the decisions themselves, or the discipline in imple- menting and obeying decisions. James Townsend summarizes that the mass line describes the central process in every political system: the conversion of demands and interests ofindividuals and groups into political decisions, and the application and enforcement of these decisions.2 The same is true of democratic centralism in general. Stephen Angle identifies stages of input, policy formulation and adjust- Dick Wilson and Matthew Grenier argue that Mao divided democratic centralism, originally the orthodox Leninist organizational policy, into two distinct elements: democracy stressing the mass line and centralism emphasizing organization (wilson and Grenier 1992,p.28). a Townsend 1980, p. 417. 262 Tlnu S,ttuøux,qnt ment in democratic centralism,3 stages that are actually conunon to the policy- making processes in all modern states. The Chinese use the term democratic centralism to describe various kinds of processes. All of these accord with the general umbrella understanding, but are not necessarily fully compatible in the details. Firstly, democratic centralism was an organizational principle in the best Leninist tradition: it meant party discipline and obeying decisions which resulted from Party-wide discussion. Secondly, it was a method of democratic decision making in general, which required process- ing popular initiative and knowledge into decisions and implementing these deci- sions. Thirdly, it referred to interaction between leaders and the led or the political system and the populace. Fourthly, it was an epistemology combining practical and experimental knowledge with the more general and more comprehensive theoretical understanding. History of democratic centralism in Chinaa I have no means to determine when in the parlance of the chinese communist Party the term democratic centralism acquired all of its present dimensions. The term, in its original Leninist meaning, has been in use since the early days of the chinese communist Party as is evidenced by its appearance in Party documents from that time. As such, it involved inner-Party democracy combining party members' initiative with unified and disciplined execution of decisions.s Later, it encompassed the mass line leadership style. Quoting two separate speeches of the time by Mao Zedong, stuart Schram sees that democratic centralism and the mass line were parallel already in Ya'nan.6 John wilson Lewis highlights a 1945 speech, in which ,ll4¿o zedong put forth the idea that the mass line must conform to democratic centralism.T 3 Angle 2005, p. 528. 4 For a handy general summary of democratic centralism in Mao Zedong's writings, see Chi 1986, pp. 245J48. Nevertheless, I would be cautious about Chi's attempts to view these writings in an undemocratic light. For example, to refute the stance that army units should "ask the lower levels to discuss first, then let the higher levels decide," does not disregard the masses' influence as Chi 198ó, p. 248, tends to clainl since any army in combat situations demands that its soldiers obey military orders, and this quotation says nothing about how democracy should be practiced among civilians in times of peace. 5 S.", e.g., "The Role of the Chinese Communist Party in the National War" in Mao Zedong, Selected Works, vol. 1,pp.204105. 6 S.hru- 1989, p. 97. 7 Lewis 1966,p.79. Theoretical Implicølions of Democratic Centralism 263 According to Stuart Schram, the concept of the mass line was not invented by Mao Zedong,s but he had utilized and developed practices resembling the mass line far before the ofhcial formulation of the concept. Arthur Steiner maintains that ever since Mao's early organizational activity among peasants in Hunan in the 1920s he had emphasized that the Party must rely on the masses, serve their needs, and draw its inspiration fíom them.g It was Mao Zedong who authorita- tively summarized the mass line style of leadership in 1943 after the Party rectifi- cation campaign in his famous writing "Some Questions Conceming Methods of Leadership". This style of leadership combines leadership and popular participa- tion, a general policy and particular conditions, and leading and leaming. Leader- ship must analyze experiences during the process to acquire even better know- ledge of the situation and formulate even better policies.l0 The 1942 rectification campaign already stressed some epistemological questions closely linked with democratic centralism. It opposed two types of subjectivism, dogmatism and empiricism, the first ignoring practice and the second unable to use perceptual and I partial knowledge in a purposeful and systematic way'l The mass line evolved as a synthesis of insights gained through guerilla ex- periences, when face-to-face interaction was the main form of communication and the Party depended on the masses for survival.l2 The reality of the mass line changed considerably afler the revolution. Brantly Womack emphasizes that the Communist Party no longer was situated in a competitive political environment. This situation fundamentally affected the democratic character of the mass line. l3 As a result of the Party monopolizing power, popular influence faded. Lowell Dittmer remarks that after the revolution, the elite's capability to transmit its mes- sages increased due to new and more effective media, while the masses' abilities to communicate their views to elites did not conespondingly increase. This fact subtly altered the nature of the Party's contact with the masses.l4 John Gardner explains that the revolution could rely on the masses' participation and local knowledge more than on specific technical skills, but after the revolution eco- nomic reconstruction needed expertise and bureaucracy. In addition, Mao Zedong 8 Schram 1989, p. 98. 9 Steiner 1951, p. 423. See also Kim 1969 for Jiangxi Soviet political style and organizational techniques. See especially pp. 78_19 for their relation to the future conception of the mass line. l0 .,Some vol. Questions Concerning Methods of Leadership," in Mao Zedong, Selected Wo¡ks, ilI. ll E.g. "Rectify the Party's Style of Work," in Mao Zedong, Selected Wo¡ks, vol. III' pp. 36- 42. l2 Selden 1972, p. 274; Stan 1979,p.192; Townsend 1967, p 51. l3 Womack 1991 A, pp.68-69,73. t4 Dittmer 1974,p.346. 264 TARU SALMENKAN lvanted to speed up ideologically motivated social change, which could not be realized without resorting to commandism. Since some policies were no longer popular, the Party responded by downgrading the masses' right to discuss and modify policies. As a result, regimentation of the masses replaced genuine mass 15 mobilization. Moreover, Soviet models of administration and enterprise management insulated leaders from workers and stressed discipline over personal activism and incentive. 16 John Bryan Starr maintains that in the communist base areas the mass line did not need to deal with hierarchical relationships among leaders. Hence, the mass line offers no solution to the alienation of the upper echelons of the organi- zation from the masses, since this alienation is not only a question of cadre atti- tudes but also the sheer size of the organization.t1 James Townsend describes how after the revolution, "higher-level cadres no longer maintained the popular con- tacts that were to ensure 'a democratic' style in the absence of popular controls." Although sending cadres to the grassroots and soliciting people's opinions still added to the quality of cadres' relationships with the masses, they could not solve the post-l949 isolation ofhigher-level cadres from the people. In other words, the result was a recurring conflict between theory and reality. Although mass move- ments attempted to recapture the original mass line spirit, they provided only tem- porary solutions and eroded the Party's ability
Recommended publications
  • Francis Fukuyama the National Interest Summer 1989
    The End of History? Francis Fukuyama The National Interest Summer 1989 IN WATCHING the flow of events the intellectual climate of the world's over the past decade or so, it is hard to two largest communist countries, and avoid the feeling that something very the beginnings of significant reform fundamental has happened in world movements in both. But this history. The past year has seen a flood phenomenon extends beyond high of articles commemorating the end of politics and it can be seen also in the the Cold War, and the fact that "peace" ineluctable spread of consumerist seems to be breaking out in many Western culture in such diverse regions of the world. Most of these contexts as the peasants' markets and analyses lack any larger conceptual color television sets now omnipresent framework for distinguishing between throughout China, the cooperative what is essential and what is restaurants and clothing stores opened contingent or accidental in world in the past year in Moscow, the history, and are predictably Beethoven piped into Japanese superficial. If Mr. Gorbachev were department stores, and the rock music ousted from the Kremlin or a new enjoyed alike in Prague, Rangoon, and Ayatollah proclaimed the millennium Tehran. from a desolate Middle Eastern What we may be witnessing is not capital, these same commentators just the end of the Cold War, or the would scramble to announce the passing of a particular period of rebirth of a new era of conflict. postwar history, but the end of history And yet, all of these people sense as such: that is, the end point of dimly that there is some larger process mankind's ideological evolution and at work, a process that gives coherence the universalization of Western liberal and order to the daily headlines.
    [Show full text]
  • Democratic Centralism and Administration in China
    This is the accepted version of the chapter published in: F Hualing, J Gillespie, P Nicholson and W Partlett (eds), Socialist Law in Socialist East Asia, Cambridge University Press (2018) Democratic Centralism and Administration in China Sarah BiddulphP0F 1 1. INTRODUCTION The decision issued by the fourth plenary session of the 18th Central Committee of the Chinese Communist Party (CCP, or Party) in 2014 on Some Major Questions in Comprehensively Promoting Governing the Country According to Law (the ‘Fourth Plenum Decision’) reiterated the Party’s determination to build a ‘socialist rule of law system with Chinese characteristics’.P1F 2P What does this proclamation of the ‘socialist’ nature of China’s version of rule of law mean, if anything? Development of a notion of socialist rule of law in China has included many apparently competing and often mutually inconsistent narratives and trends. So, in searching for indicia of socialism in China’s legal system it is necessary at the outset to acknowledge that what we identify as socialist may be overlaid with other important influences, including at least China’s long history of centralised, bureaucratic governance, Maoist forms of ‘adaptive’ governanceP2F 3P and Western ideological, legal and institutional imports, outside of Marxism–Leninism. In fact, what the Chinese party-state labels ‘socialist’ has already departed from the original ideals of European socialists. This chapter does not engage in a critique of whether Chinese versions of socialism are really ‘socialist’. Instead it examines the influence on China’s legal system of democratic centralism, often attributed to Lenin, but more significantly for this book project firmly embraced by the party-state as a core element of ‘Chinese socialism’.
    [Show full text]
  • On Democratic Centralism
    The Marxist, XXVI 1, January–March 2010 PRAKASH KARAT On Democratic Centralism In the recent period, alongwith a number of critical discussions on the electoral set-back suffered by the CPI (M) and the Left in last Lok Sabha elections, there have been some questions raised about the practice of democratic centralism as the organizational principle of the Communist Party. Such critiques have come from persons who are intellectuals associated with the Left or the CPI (M). Since such views are being voiced by comrades and persons who are not hostile to the Party, or, consider themselves as belonging to the Left, we should address the issues raised by them and respond. This is all the more necessary since the CPI (M) considers the issue of democratic centralism to be a basic and vital one for a party of the working class. Instead of dealing with each of the critiques separately, we are categorising below the various objections and criticisms made. Though, it must be stated that it is not necessary that each of them hold all the views expressed by the others. But the common refrain is that democratic centralism should not serve as the organizational principle of the Communist Party or that it should be modified. What are the points made in these critiques? They can be summed up as follows: THE MARXIST 1. Democratic centralism is characterized as a Party organizational structure fashioned by Lenin to meet the specific conditions of Tsarist autocracy which was an authoritarian and repressive regime. Hence, its emphasis on centralization, creating a core of professional revolutionaries and secrecy.
    [Show full text]
  • The 18Th Central Committee Leadership with Comrade Xi Jinping As General Secretary
    The 18th Central Committee Leadership with Comrade Xi Jinping as General Secretary Alice Miller Authoritative party documents refer to the prescribed dynamic of elite politics in the Chinese Communist Party (CCP) as its “collective leadership system.” Despite widespread impressions of Xi Jinping as a rule-busting strongman leader, PRC media consistently depict the current Politburo and its Standing Committee as operating in the same manner they did during the Hu Jintao period: as an oligarchic collective leadership according to the system’s norms. The “Collective Leadership System” Throughout the post-Mao period, the “collective leadership system” (集体领导制) and its elements have been incorporated in the party’s most authoritative public documents: successive party constitutions, political reports delivered to party congresses and Central Committee plenums, and key leader speeches. These documents uniformly state that the system entails two fundamental elements which together enable effective policy-making: collective decision-making by consensus, and a division of policy responsibility among the individual members of the leadership. The appendix to this article transcribes references to the system in such documents. Mao Era Background The party’s “collective leadership system” has traversed a difficult course since its establishment in the mid-1950s.1 The roots of the system were set down in 1948, on the eve of the communist victory in the Chinese civil war. In September 1948, shortly after the party headquarters were reestablished at Xibaipo, Hebei, the party leadership headed by Mao Zedong ordered the strengthening of the party committee system through the CCP apparatus. The long struggle first against the Japanese and then to overthrow the Republican government had encouraged two tendencies that the new order sought to change.
    [Show full text]
  • Explore and Analyse on New Democracy Values
    Explore and Analyse on New Democracy Values Bin ZENG Marxism Colledge, Southwest Jiaodong University of China Abstract: On the eve of the end of the War of Resistance against Japan, Mao Zedong, in response to the feudal fascist values put forward by the Kuomintang, in order to integrate the value objectives of the Chinese nation with the value de- mands of the Chinese people and fully embody the organic unity of the two, on behalf of the whole Party, put forward new democratic values with internal logic and strict integrity, with independence, freedom, democracy, unity, prosperity and strength as the basic content, and with the fundamental value orientation of seeking happiness for the people and rejuvenation for the nation. Keywords: New democracy valuesanalyse DOI: 10.47297/wspciWSP2516-252701.20200403 1. Origins of New Democratic Values ao Zedong put forward the new democratic values with “independence, M freedom, democracy, unity and prosperity” as the concrete value concept 12 times in the first half of 1945. The direct cause of his proposal was Chiang Kai-shek’s book “the fate of China “, which embodied the feudal fascist values of the Kuomintang in 1943. In his book, Jiang not only continued to advocate the feudal values of” propriety, righteousness, honesty and shame “(that is ,” four di- mensions “) and “loyalty, filial piety, benevolence, love, faith, righteousness, har- mony and equality “(that is ,” eight virtues “), but also advocated that China should pursue the fascist values of” one country, one leader and one doctrine
    [Show full text]
  • On Coalition Government'
    Digital Archive digitalarchive.wilsoncenter.org International History Declassified April 24, 1945 Mao Zedong, 'On Coalition Government' Citation: “Mao Zedong, 'On Coalition Government',” April 24, 1945, History and Public Policy Program Digital Archive, Translation from Selected Works of Mao Tse-tung, Vol. 3 (Peking: Foreign Languages Press, 1961), 203-270. http://digitalarchive.wilsoncenter.org/document/121326 Summary: Mao Zedong defines the Chinese Communist Party's foreign policy for the post-war world, announcing that "China can never win genuine independence and equality by following the present policy of the Kuomintang government." Credits: This document was made possible with support from the MacArthur Foundation. Original Language: Chinese Contents: English Translation On Coalition Government April 24, 1945 I. The Fundamental Demands of the Chinese People Our congress is being held in the following circumstances. A new situation has emerged after nearly eight years of resolute, heroic and indomitable struggle waged by the Chinese people with countless sacrifices and amid untold hardships against the Japanese aggressors; in the world as a whole, decisive victory has been gained in the just and sacred war against the fascist aggressors and the moment is near when the Japanese aggressors will be defeated by the Chinese people in co-ordination with the allied countries. But China remains disunited and is still confronted with a grave crisis. In these circumstances, what ought we to do? Beyond all doubt, the urgent need is to unite representatives of all political parties and groups and of people without any party affiliation and establish a provisional democratic coalition government for the purpose of instituting democratic reforms, surmounting the present crisis, mobilizing and unifying all the anti- Japanese forces in the country to fight in effective co-ordination with the allied countries for the defeat of the Japanese aggressors, and thus enabling the Chinese people to liberate themselves from the latter's clutches.
    [Show full text]
  • Journal of Contemporary China
    JOURNAL OF CONTEMPORARY CHINA Article Index By Subject Matter Vol. 6, No. 14, January 1997 – Vol. 30, No. 129, May 2021 Table of Contents Art and Literature • Financial Crisis • Chinese Art, Music, Literature, • Financial institutions Television, and Cinema • Financial markets Culture • Monetary policy • Culture / Traditional Culture • Fiscal policy Developmental Studies Foreign Relations • Development • China-Africa Relations • China-Australia Relations Economics • China-East Asia Relations • Agriculture • China-EU, Europe Relations • Business • China-General Foreign Relations • Economy/ Chinese Economy • China – India Relations • Economic and Financial Reform • China – Japan Relations • Entrepreneurs • China - Middle East / Central Asia • Enterprise Relations • Foreign Trade • China – North and South American • Real Estate / Construction Relations Rights (Property, Intellectual • • China - North and South Korea Property) Relations Rising China • • China – Pakistan Relations State-Owned Enterprises • • China – Periphery Relations • Taxes • China – Russia Relations Education • China – South East Asia Relations • College / University • China – United States Relations • Education • Cross-Boundary Rivers Government Energy • Central-Local Government Relations • Governance Environment • Climate Change • Local Elections • Environment / Pollution • Local Governments • Natural Resources • National People’s Congress (NPC) • Provincial Governments/ Financial System Intergovernmental Relations • Finance • Risk Management • Rule of Law Internationalization
    [Show full text]
  • Decent Democratic Centralism Author(S): Stephen C
    Decent Democratic Centralism Author(s): Stephen C. Angle Source: Political Theory, Vol. 33, No. 4 (Aug., 2005), pp. 518-546 Published by: Sage Publications, Inc. Stable URL: http://www.jstor.org/stable/30038439 Accessed: 09/04/2010 03:44 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=sage. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. Sage Publications, Inc. is collaborating with JSTOR to digitize, preserve and extend access to Political Theory. http://www.jstor.org SOURCESOF CHINESEPOLITICAL REFLECTION DECENT DEMOCRATIC CENTRALISM STEPHENC. ANGLE WesleyanUniversity Are there any coherentand defensible alternatives to liberal democracy? The author examines the possibility that a reformeddemocratic centralism-the principle around which China's cur- rentpolity is officially organized-might be legitimate, according to both an inside and an out- side perspective.
    [Show full text]
  • The Chinese Communist Party (CCP) How to Explain Its Longevity?
    Briefing June 2015 The Chinese Communist Party (CCP) How to explain its longevity? SUMMARY With a membership of 86.7 million in 2013 the Chinese Communist Party (CCP) is the largest political party worldwide, representing only slightly more than six per cent of the Chinese population. The CCP is the second-longest lone-ruling communist party, in one of the world's five remaining party-states. It heads assertively towards its 100th anniversary in 2021, since contrary to numerous past forecasts of the CCP's demise, no signs of regime change in China loom on the horizon. The CCP's strong resilience against internal and external threats to its survival appears to result from a combination of its excellent capability to adapt flexibly to changing realities, and its iron grip on power which relies on a systematic heavy-handed approach to political opposition and peaceful dissent that could challenge its monopolistic one-party rule. Since its inception, the CCP has witnessed transformations of varying degrees of its ideology, organisational structure, governance methods, leadership style and leadership succession practice, as well as membership size and composition, which have allowed it to safeguard its legitimacy and thus its longevity. Prospects are extremely bleak for the democratisation of the party-state triggered from outside the CCP by an opposition party able to threaten the CCP's control as the sole political party with 'genuine influence' in Chinese politics. Based on the CCP's self- established status as a 'vanguard party', i.e. a group of communist leaders determining what is in the best interest of the Chinese people, the CCP leadership adheres strictly to the conviction that the party monitors itself, and therefore staunchly dismisses the idea of outside scrutiny.
    [Show full text]
  • Holdridge, John H. 1989
    The Association for Diplomatic Studies and Training Foreign Affairs Oral History Project AMBASSADOR JOHN H. HOLDRIDGE Interviewed by: Marshall Green and Charles Stuart Kennedy Initial interview date: December 14, 1989 C pyright 1998 ADST TABLE OF CONTENTS Background Childhood a road Foreign Service exam Chinese language training Bangkok, Thailand Hong $ong 1953-1956 Information flo, Singapore 1956-1958 Chinese culture Chinese Affairs 1958-196. Tai,an Attempts to resume contact ,ith Chinese communists $issinger/s handshake ,ith Chou 0n-lai Sino-Soviet rift Hong $ong 196.-1966 Chinese attitude to,ards Hong $ong 1reat 2eap For,ard 3S-Chinese relations Chinese invasion of India 4arsa, talks Peaceful coexistence National Security Council 1969-1973 Presidential trip to the Pacific Chinese relations ,ith 3S and 3SSR Nixon/s attitude to,ard the Foreign Service $issinger/s trip to China Cultural Revolution 1 Shanghai Communi8u9 Peking, China 1973-1975 Opening 2iaison Office David Bruce Chinese relations ,ith Indonesia 3S arms sales to Tai,an Sco,croft and 0agle urger/s visit to Peking Analysis of 3S Chinese relations INTERVIEW % (Green): J hn H ldridge has had a remarkable career. He is ne f the tw pe ple I kn w wh is a -est P int graduate and wh ended up in the State Department. Hank /yr ade is the ther ne. Ambassad r H ldridge has been my c lleague n three ccasi ns. First, I was regi nal planning advis r f r East Asia back in the late 1920s. During that time, he was the Department4s intelligence fficer dealing with that part f the w rld.
    [Show full text]
  • Prof. Susan Whiting Government and Politics of China POL S 442/SISEA 449 Midterm Exam Review
    Prof. Susan Whiting Government and Politics of China POL S 442/SISEA 449 Midterm Exam Review I. Exam format The exam is closed-book. Please bring a blue book. Please do not write your name on the blue book. Part A: Short Answer/Multiple Choice (40 percent) Answer the short question posed, or circle the correct responses. Part B: Essay (60 percent) Respond to the given question in a coherent, well-organized essay. II. Concepts, events, and individuals: be able to identify/define and to state significance Confucianism Opium Wars (1839-1842, 1856-1860) mandate of heaven Taiping Rebellion (1850-1864) Sun Yatsen predatory peasant strategy May 4th Movement (1919) Chiang Kaishek protective peasant strategy May 30th Incident (1925) Mao Zedong revolution vs. rebellion First United Front (1924-1927) Zhou Enlai K’uo Min-t’ang (KMT) Second United Front (1937-1945) Liu Shaoqi Chinese Communist Party (CCP) Long March (1934-1935) Deng Xiaoping democratic centralism Party Rectification (Yan’an) (1942) Chen Yun agricultural producers’ cooperative “New Democracy” (1948-1950) Peng Dehuai price scissors Hundred Flowers Campaign (1956) Lin Biao Soviet-style planned economy Anti-Rightist Campaign (1957) Jiang Qing commune Great Leap Forward (1958-1961) Hua Guofeng household registration system (hukou) Lushan Plenum (1959) Wan Li household responsibility syst. (baochan daohu) Cultural Revolution (1966-1976) voluntarism Shanghai Communique (1972) People’s Liberation Army (PLA) Third Plenum of Eleventh Central Committee (1978) nationalism III. Thematic questions to consider (These questions provide an indication of the type of question that might appear on the exam.) 1. How did foreign as opposed to domestic influences shape the Chinese revolution over the course of the nineteenth and twentieth centuries? 2.
    [Show full text]
  • South Dakota State University
    South Dakota State University POLS 165: Political Ideologies Concepts addressed: Comparative government: the nature of political systems & economic systems & Ideologies: capitalism, socialism, communism; representative democracy; democracy versus authoritarian systems Capitalism & Socialism: no pure forms exist Capitalism - Objectives • 1. Economic growth & abundance • 2. Personal freedom of choice • Limited government; individualism • 3. Recognition & reward based on merit • Personal striving - personal reward Capitalist Operating Principle 1 • Market economy: productive forces respond to choices/demands of customers • Innovation, risk, not other bar to entry • No arbitrary exclusions (e.g. nepotism, race discrimination) • Efficient: serve widely-shared demands • Mass market: economies of scale (& division of labor) Capitalist Operating Principle 2 • Private ownership • Freedom of contract Capitalist Operating Principle 3 • Competition - based on expected gain • Dispose of inefficient firms, creative destruction • Research & product development • Political function: disperse decision-making; holders of econ power check each other • Incentive: energy, work, ability (+chance?) Adam Smith Wealth of Nations 1776 • Not state ownership, or regulations, or high taxes, or protective tariffs • Emphasis on market; individualism • Paradox: private interest promoting public good • Wealth - by division of labor; need large market; need free market in trade • Use incentives • Role of state - minimal: justice (police, courts), defense, limited public
    [Show full text]