MGCR 382 International
Business - Newest Notes
2024 for midterm exam prep
McGill University
, lOMoARcPSD|6353920
Session 2&3: National Differences in Political, Economic &
Legal Systems – Chapter 2
i) Political Systems
Political Systems: The systems of government in a nation
2 Dimensions
i) Collectivism vs. Individualism
ii) Democracy vs. Totalitarianism
Collectivism: emphasizes collective goals over individual goals.
a) Socialism: Public ownerships of the means of production.
b) Karl Marx: the few benefits at the expense of the many in a capitalist society
where individual freedoms are not restricted
c) Communist vs. social democracy.
d) Privatization.
Individualism: An individual should have freedom in economic and political pursuits.
Individual interests over collective interests.
1. Guarantee of individual freedom & self−expression.
2. The welfare of society best served by letting people pursue their own economic
self− interest.
Democracy: government by the people through direct or elected representatives
Representative Democracy: citizens periodically elect individuals to represent them
1. Freedom of expression
2. Free media
3. Universal adult suffrage
4. Fair court system
, lOMoARcPSD|6353920
5. Non−political state bureaucracy
Pseudo democracy: between pure democracy & totalitarian systems. Elements captured
much of machinery of state & use it to deny basic political & civil liberties
, lOMoARcPSD|6353920
Totalitarianism: one person or political party exercises absolute control over all spheres of
human life & prohibits opposing political parties.
Communist totalitarianism: socialism can be achieved only through a totalitarian
dictatorship.
Theocratic totalitarianism: monopolized by a party, group, or individual that governs
according to religious principles.
Tribal totalitarianism: a party, group, or individual that represents the interests of a
particular tribe monopolizes political power.
Right-wing totalitarianism: generally permits individual economic freedom but restricts
individual political freedom, including free speech, on the ground that it would lead to the
rise of communism.
EXAMPLE: China is totalitarian but move towards individual freedom in economic sphere
ii) Economic Systems
Market Economy:
Production activities privately owned.
Only Supply & demand determine production
Supply not restricted.
Government encourages free & fair competition.
Mixed Economy: Private & government owned sectors.
Government aid essential industries EXAMPLE: US & GM during 2008
Command Economy government plans goods & services, quantity & price, then allocates
for “good of society”.
All state−owned businesses.
No incentive for individuals to find better ways to serve needs.
Business - Newest Notes
2024 for midterm exam prep
McGill University
, lOMoARcPSD|6353920
Session 2&3: National Differences in Political, Economic &
Legal Systems – Chapter 2
i) Political Systems
Political Systems: The systems of government in a nation
2 Dimensions
i) Collectivism vs. Individualism
ii) Democracy vs. Totalitarianism
Collectivism: emphasizes collective goals over individual goals.
a) Socialism: Public ownerships of the means of production.
b) Karl Marx: the few benefits at the expense of the many in a capitalist society
where individual freedoms are not restricted
c) Communist vs. social democracy.
d) Privatization.
Individualism: An individual should have freedom in economic and political pursuits.
Individual interests over collective interests.
1. Guarantee of individual freedom & self−expression.
2. The welfare of society best served by letting people pursue their own economic
self− interest.
Democracy: government by the people through direct or elected representatives
Representative Democracy: citizens periodically elect individuals to represent them
1. Freedom of expression
2. Free media
3. Universal adult suffrage
4. Fair court system
, lOMoARcPSD|6353920
5. Non−political state bureaucracy
Pseudo democracy: between pure democracy & totalitarian systems. Elements captured
much of machinery of state & use it to deny basic political & civil liberties
, lOMoARcPSD|6353920
Totalitarianism: one person or political party exercises absolute control over all spheres of
human life & prohibits opposing political parties.
Communist totalitarianism: socialism can be achieved only through a totalitarian
dictatorship.
Theocratic totalitarianism: monopolized by a party, group, or individual that governs
according to religious principles.
Tribal totalitarianism: a party, group, or individual that represents the interests of a
particular tribe monopolizes political power.
Right-wing totalitarianism: generally permits individual economic freedom but restricts
individual political freedom, including free speech, on the ground that it would lead to the
rise of communism.
EXAMPLE: China is totalitarian but move towards individual freedom in economic sphere
ii) Economic Systems
Market Economy:
Production activities privately owned.
Only Supply & demand determine production
Supply not restricted.
Government encourages free & fair competition.
Mixed Economy: Private & government owned sectors.
Government aid essential industries EXAMPLE: US & GM during 2008
Command Economy government plans goods & services, quantity & price, then allocates
for “good of society”.
All state−owned businesses.
No incentive for individuals to find better ways to serve needs.
