Economic and Political Systems

• Muhammed Yunnus– Professor of economics– Met Sufiya Khatun

• Made stools

– Started Bank loan small amounts to poor

• Join group of 5 others who lend

– Grameen Bank- “Village Bank”• 1,000 offices• Now it’s owned by those who borrow

Economic Systems• Economy

– System for producing , distributing and consuming goods and services.

• Owners and workers are producers

• Product made is called goods or services performed for others

• Consumers buy and use the goods and services

Economic Systems

• Types of Business– Basic Business

• Essential for a nation to function– Transportation, communication

and electricity

– Non-Basic Business• “Nice” but not necessary

– DVD, sports equipment,

– Services can be both• Hospitals are basic, nails are

non-basic

Different Economic Systems

• Vary based on Cultures– Capitalism, Socialism, and

Communism• Capitalism

– Most basic and non-basic businesses privately owned

– US, South Africa and Japan

Economic Systems

• Socialism– Government owns most basic industries– Runs them for the good of society…no profit– Government dictates workers pay and how

much to charge– Uses profits to pay for health care and

education– Non-basic follow same model

• Privately owned– Spain, Portugal, and Italy

Economic Systems

• Communism– Central government owns all property

• All farms, factories

– Controls all aspect of citizens life• Prices of goods/services, how much product made,

and workers pay

– Cuba, China, and North Korea

Political Systems

• Government- system that sets up and enforces a society’s laws and institution.– Some controlled by few/ some by many

Direct Democracy

• Early government = simple

• Direct Democracy is where everyone participates in running the day-to-day affairs– Chiefs/elders– Based on the culture’s customs and beliefs

Monarchy• Most common form of government until

100 years ago• Monarchy- king or queen rules the

government– Ruler inherits throne by birth

• Monarchies exist today– Sweden, Denmark, UK, Spain, Swaziland

• Not the same power as their ancestors• They are constitutional monarchs

– Constitutions• Sets of laws that define and limit the government’s

power• King or queen is really just a symbol

Representative Democracy

• Citizen’s elect representatives to run country’s affairs– Constitutional monarchy follow this

• Democracy (greek)= demos- common people• The common people hold power to govern and

rule• Elect reps who create laws• Not re-elect if don’t like• Power is shared

– USA, Canada, and Israel

Dictatorship

• Government leader has total control

• Dictator decides what happens– Make laws– Decide if their will be elections

• Usually sound good at the start– More often they end up harsh