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Capitalism:

Capitalism is an economic system which is used in the world currently. It tells that all the means of
production and distribution and industry are owned by privately owned and all the decisions regarding the
economics is made by the market owners rather than government. The period between the 16th and 18th
century is described as mercantilism. Some scholars regard mercantilism as the early stages of capitalism
but according to Polanyi Capitalism as a social system was established in 1984 when a competitive labor
market was established in England. However, this term is an Enlightenment European term used to
describe European practices; so the term "capitalism" means more than just a body of social practices
easily applied across geographical and historical distances, it is also a "way of thinking," and as a way of
thinking does not necessarily apply to earlier European origins of capitalism or to capitalism as practiced
in other cultures.

In modern world, Capitalism is a social system based on the recognition of individual rights, including
property rights, in which all property is privately owned. Under capitalism the state is separated from
economics (production and trade), just like the state is separated from religion. Capitalism is the system
of of laissez faire. It is the system of political freedom. Capitalism as a way of thinking is fundamentally
individualistic, that is, that the individual is the center of capitalist endeavor. This idea draws on all the
Enlightenment concepts of individuality: that all individuals are different, that society is composed of
individuals who pursue their own interests, that individuals should be free to pursue their own interests
(this, in capitalism, is called "economic freedom"), and that, in a democratic sense, individuals pursuing
their own interests will guarantee the interests of society as a whole. Capitalism as a way of thinking is
fundamentally based on the Enlightenment idea of progress; the large-scale social goal of unregulated
capitalism is to produce wealth, that is, to make the national economy wealthier and more affluent than it
normally would be. Therefore, in a concept derived whole-cloth from the idea of progress, the entire
structure of capitalism as a way of thinking is built on the idea of "economic growth." This economic
growth has no prescribed end; the purpose is for nations to grow steadily wealthier.

Notable critics of capitalism have included: socialists, anarchists, communists, technocrats, some types of
conservatives, Luddites, Narodniks, Shakers and some types of nationalists. Marxists advocated a
revolutionary overthrow of capitalism that would lead to socialism, before eventually transforming into
communism. Marxism influenced social democratic and labour parties, as well as some moderate
democratic socialists. Many aspects of capitalism have come under attack from the anti-globalization
movement, which is primarily opposed to corporate capitalism.

Many religions have criticized or opposed specific elements of capitalism. Traditional Judaism,
Christianity, and Islam forbid lending money at interest, although methods of banking have been
developed in all three cases, and adherents to all three religions are allowed to lend to those outside of
their religion. Christianity has been a source of praise for capitalism, as well as criticism of it, particularly
for its materialist aspects. Indian philosopher P.R. Sarkar, founder of the Ananda Marga movement,
developed the Law of Social Cycle to identify the problems of capitalism

Critics argue that capitalism is associated with the unfair distribution of wealth and power; a tendency
toward market monopoly or oligopoly (and government by oligarchy); imperialism, counter-revolutionary
wars and various forms of economic and cultural exploitation; repression of workers and trade unionists,
and phenomena such as social alienation, economic inequality, unemployment, and economic instability.
Capitalism is regarded by many socialists to be irrational in that production and the direction of the
economy are unplanned, creating many inconsistencies and internal contradictions.
Democracy:
Democracy is a political form of government in which governing power is derived from the people, either
by direct referendum (direct democracy) or by means of elected representatives of the people
(representative democracy). The term comes from the Greek: δημοκρατία – (dēmokratía) "rule of the
people",which was coined from (dêmos) "people" and (Kratos) "power", in the middle of the fifth-fourth
century BC to denote the political systems then existing in some Greek city-states, notably Athens
following a popular uprising in 508 BC. Even though there is no specific, universally accepted definition
of 'democracy', equality and freedom have been identified as important characteristics of democracy
since ancient times. These principles are reflected in all citizens being equal before the law and having
equal access to power. For example, in a representative democracy, every vote has equal weight, no
restrictions can apply to anyone wanting to become a representative, and the freedom of its citizens is
secured by legitimized rights and liberties which are generally protected by a constitution.

There are several varieties of democracy, some of which provide better representation and more freedoms
for their citizens than others. However, if any democracy is not carefully legislated – through the use of
balances – to avoid an uneven distribution of political power, such as the separation of powers, then a
branch of the system of rule could accumulate power thus become undemocratic.

The "majority rule" is often described as a characteristic feature of democracy, but without governmental
or constitutional protections of individual liberties, it is possible for a minority of individuals to be
oppressed by the "tyranny of the majority". An essential process in representative democracies is
competitive elections that are fair both substantively and procedurally. Furthermore, freedom of political
expression, freedom of speech, and freedom of the press are essential so that citizens are informed and
able to vote in their personal interests.

The term democracy first appeared in ancient Greek political and philosophical thought. The philosopher
Plato contrasted democracy, the system of "rule by the governed", with the alternative systems of
monarchy (rule by one individual), oligarchy (rule by a small élite class) and timocracy (ruling class of
property owners). Although Athenian democracy is today considered by many to have been a form of
direct democracy, originally it had two distinguishing features: first the allotment (selection by lot) of
ordinary citizens to government offices and courts, and secondarily the assembly of all the citizens.

20th century transitions to liberal democracy have come in successive "waves of democracy," variously
resulting from wars, revolutions, decolonization, religious and economic circumstances. World War I and
the dissolution of the Ottoman and Austro-Hungarian empires resulted in the creation of new nation-states
from Europe, most of them at least nominally democratic.

In the 1920s democracy flourished, but the Great Depression brought disenchantment, and most of the
countries of Europe, Latin America, and Asia turned to strong-man rule or dictatorships. Fascism and
dictatorships flourished in Nazi Germany, Italy, Spain and Portugal, as well as nondemocratic regimes in
the Baltics, the Balkans, Brazil, Cuba, China, and Japan, among others.

World War II brought a definitive reversal of this trend in western Europe. The successful
democratization of the American, British, and French sectors of occupied Germany (disputed), Austria,
Italy, and the occupied Japan served as a model for the later theory of regime change.
Economists since Milton Friedman have strongly criticized the efficiency of democracy. They base this
on their premise of the irrational voter. Their argument is that voters are highly uninformed about many
political issues, especially relating to economics, and have a strong bias about the few issues on which
they are fairly knowledgeable.

Economists since Milton Friedman have strongly criticized the efficiency of democracy. They base this
on their premise of the irrational voter. Their argument is that voters are highly uninformed about many
political issues, especially relating to economics, and have a strong bias about the few issues on which
they are fairly knowledgeable.

Traditional Asian cultures, in particular that of Confucian and Islamic thought, believe that democracy
results in the people's distrust and disrespect of governments or religious sanctity. The distrust and
disrespect pervades to all parts of society whenever and wherever there is seniority and juniority, for
example between a parent and a child, a teacher and a student.

More recently, democracy is criticised for not offering enough political stability. As governments are
frequently elected on and off there tends to be frequent changes in the policies of democratic countries
both domestically and internationally. Even if a political party maintains power, vociferous, headline
grabbing protests and harsh criticism from the mass media are often enough to force sudden, unexpected
political change. Frequent policy changes with regard to business and immigration are likely to deter
investment and so hinder economic growth. For this reason, many people have put forward the idea that
democracy is undesirable for a developing country in which economic growth and the reduction of
poverty are top priority.
Socialism:
Socialism is an economic and political theory advocating public or common ownership and cooperative
management of the means of production and allocation of resources.

In a socialist economic system, production is carried out by a free association of workers to directly
maximise use-values (instead of indirectly producing use-value through maximising exchange-values),
through coordinated planning of investment decisions, distribution of surplus, and the means of
production. Socialism is a set of social and economic arrangements based on a post-monetary system of
calculation, such as labour time, energy units or calculation-in-kind; at least for the factors of production.

Modern socialism originated in the late 18th-century intellectual and working class political movement
that criticised the effects of industrialisation and private property on society. Utopian socialists such as
Robert Owen (1771–1858), tried to found self-sustaining communes by secession from a capitalist
society. Henri de Saint Simon (1760–1825), who coined the term socialisme, advocated technocracy and
industrial planning. Saint-Simon, Friedrich Engels and Karl Marx advocated the creation of a society that
allows for the widespread application of modern technology to rationalise economic activity by
eliminating the anarchy of capitalist production.[9][10] They argued that this would allow for economic
output (or surplus value) and power to be distributed based on the amount of work expended in
production.

The English word socialism (1839) derives from the French socialisme (1832), the mainstream
introduction of which usage is attributed, in France, to Pierre Leroux, and to Marie Roch Louis Reybaud;
and in Britain to Robert Owen in 1827, father of the cooperative movement. Socialist models and ideas
espousing common or public ownership have existed since antiquity. Mazdak, a Persian communal proto-
socialist, instituted communal possessions and advocated the public good, and later the classical Greek
philosophers Plato and Aristotle espoused a form of communism. However, the modern concept of
socialism matured in response to the development of industrial capitalism. Early socialism was seen as an
extension of classical liberalism by extending liberty and rights to the industrial economic aspect of life,
so that these values were compatible with the then-emerging industrial society.

The first advocates of socialism favoured social levelling in order to create a meritocratic or technocratic
society based upon individual talent. Count Henri de Saint-Simon is regarded as the first individual to
coin the term socialism. Saint-Simon was fascinated by the enormous potential of science and technology
and advocated a socialist society that would eliminate the disorderly aspects of capitalism and would be
based upon equal opportunities. He advocated the creation of a society in which each person was ranked
according to his or her capacities and rewarded according to his or her work. The key focus of Simon's
socialism was on administrative efficiency and industrialism, and a belief that science was the key to
progress.

Criticism of socialism refers to a critique of socialist models of economic organization, their efficiency
and feasibility; as well as the political and social implications of such a system. Some criticisms are not
directed toward socialism as a system, but are directed toward the socialist movement, socialist political
parties or existing socialist states. Some critics consider socialism to be a purely theoretical concept that
should be criticized on theoretical grounds; others hold that certain historical examples exist and that can
be criticized on practical grounds. Because socialism is a broad concept, some criticisms presented in this
article will only apply a specific model of socialism that may differ sharply from other types of socialism.
Economic liberals, pro-capitalist Libertarians and some classical liberals view private property of the
means of production and the market exchange as natural and/or moral phenomena, which are central to
their conceptions of freedom and liberty and thus perceive public ownership of the means of production,
cooperatives and economic planning as infringements upon liberty.
Communism:
Communism is a sociopolitical movement that aims for a classless society structured upon communal
ownership of the means of production and the end of wage labour and private property. The exact
definition of communism varies and it is commonly used interchangeably with socialism, however,
communist theory contends that socialism is just a transitional stage on the way to communism.

A variety of different forms of communism have developed, each based upon the ideas of different
political theorists, usually as additions or interpretations of various forms of Marxism, the collective
philosophies of Karl Marx. Marxism-Leninism is the synthesis of Vladimir Lenin's contributions to
Marxism, such as how a revolutionary party should be organised; Trotskyism is Leon Trotsky's
conception of Marxism and Maoism is Mao Tse Tung's interpretation of Marxism to suit the conditions of
China at that time.

Communist theory generally states that the only way to solve the problems existing within capitalism is
for the working class, referred to as the proletariat, who is the main producer of wealth in society and is
exploited by the capitalist class, as explained in theories such as surplus value, to replace the bourgeoisie
as the ruling class to establish a society without class divisions, called socialism, as a prelude to
attempting to achieve the final stage of communism.

Pure communism, or the stage in history after socialism, refers to a classless, stateless society, one where
decisions on what to produce and what policies to pursue are made in the best interests of the collective
society with the interests of every member of society given equal weight in the practical decision-making
process in both the political and economic spheres of life.

Karl Marx, as well as some other communist philosophers, purposely never provided a detailed
description as to how communism would function as a social system. In the communist manifesto, Marx
lays out a 10-point plan advising the redistribution of land and production to achieve his social ideals.
However, Marx fervently denies that this plan is to be carried out by any specific group or "class".
According to Marx, communal ownership of the means of production and the end of wage labour
inevitably arises due to contradictions and class conflicts existing in capitalism, and the communists are
merely professors who help frame struggles in terms of class struggle. In this way, communism avoids the
contradiction of creating a new class to replace the old one.

In the late 19th century, Russian Marxism developed a distinct character. The first major figure of
Russian Marxism was Georgi Plekhanov. Underlying the work of Plekhanov was the assumption that
Russia, less urbanized and industrialized than Western Europe, had many years to go before society
would be ready for proletarian revolution to occur, and a transitional period of a bourgeois democratic
regime would be required to replace Tsarism with a socialist and later communist society. (EB)

In Russia, the 1917 October Revolution was the first time any party with an avowedly Marxist
orientation, in this case the Bolshevik Party, seized state power. The assumption of state power by the
Bolsheviks generated a great deal of practical and theoretical debate within the Marxist movement. Marx
predicted that socialism and communism would be built upon foundations laid by the most advanced
capitalist development. Russia, however, was one of the poorest countries in Europe with an enormous,
largely illiterate peasantry and a minority of industrial workers. Marx had explicitly stated that Russia
might be able to skip the stage of bourgeoisie capitalism.Other socialists also believed that a Russian
revolution could be the precursor of workers' revolutions in the West.
In 1985, Mikhail Gorbachev became leader of the Soviet Union and relaxed central control, in accordance
with reform policies of glasnost (openness) and perestroika (restructuring). The Soviet Union did not
intervene as Poland, East Germany, Czechoslovakia, Bulgaria, Romania, and Hungary all abandoned
Communist rule by 1990. In 1991, the Soviet Union itself dissolved.

By the beginning of the 21st century, states controlled by communist parties under a single-party system
include the People's Republic of China, Cuba, Laos, Vietnam, and informally North Korea. Communist
parties, or their descendant parties, remain politically important in many countries. President Dimitris
Christofias of Cyprus is a member of the Progressive Party of Working People, but the country is not run
under single-party rule. In South Africa, the Communist Party is a partner in the ANC-led government. In
India, communists lead the governments of three states, with a combined population of more than 115
million. In Nepal, communists hold a majority in the parliament.

The People's Republic of China has reassessed many aspects of the Maoist legacy; and the People's
Republic of China, Laos, Vietnam, and, to a far lesser degree, Cuba have reduced state control of the
economy in order to stimulate growth. Economic reform in the People's Republic of China started in 1978
under the leadership of Deng Xiaoping; since then, China has managed to bring down the poverty rate
from 53% in the Mao era to just 6% in 2001. The People's Republic of China runs Special Economic
Zones dedicated to market-oriented enterprise, free from central government control. Several other
communist states have also attempted to implement market-based reforms, including Vietnam.

Some of the primary criticisms of socialism and by extension communism are distorted or absent price
signals slow or stagnant technological advance, reduced incentives, reduced prosperity, feasibility, its
social and political effects.

Part of this criticism extends to the policies adopted by one-party states ruled by Communist parties
(known as "Communist states"). Some scholars are specially focused on their human rights records which
are claimed to be responsible for famines, purges and warfare resulting in deaths far in excess of previous
empires, capitalist or other regimes. The Council of Europe in Resolution 1481 and international
declarations such as the Prague Declaration on European Conscience and Communism and the
Declaration on Crimes of Communism have condemned some of the actions that resulted in these deaths
as crimes.
Nationalism:
Nationalism involves a strong identification of a group of individuals with a political entity defined in
national terms, i.e. a nation. Often, it is the belief that an ethnic group has a right to statehood or that
citizenship in a state should be limited to one ethnic group, or that multinationality in a single state should
necessarily comprise the right to express and exercise national identity even by minorities.

It can also include the belief that the state is of primary importance, or the belief that one state is naturally
superior to all other states. It is also used to describe a movement to establish or protect a homeland
(usually an autonomous state) for an ethnic group. In some cases the identification of a national culture is
combined with a negative view of other races or cultures.

Conversely, nationalism might also be portrayed as collective identities towards imagined communities
which are not naturally expressed in language, race or religion but rather socially constructed by the very
individuals that belong to a given nation. Nationalism is sometimes reactionary, calling for a return to a
national past, and sometimes for the expulsion of foreigners. Other forms of nationalism are
revolutionary, calling for the establishment of an independent state as a homeland for an ethnic
underclass.

Nationalism emphasizes collective identity - a 'people' must be autonomous, united, and express a single
national culture. However, some nationalists stress individualism as an important part of their own
national identity.

National flags, national anthems, and other symbols of national identity are often considered sacred, as if
they were religious rather than political symbols. Deep emotions are aroused.Gellner and Breuilly, in
Nations and Nationalism, contrast nationalism and patriotism. "If the nobler word 'patriotism' then
replaced 'civic/Western nationalism', nationalism as a phenomenon had ceased to exist."

Before the development of nationalism, people were generally loyal to a city or to a particular leader
rather than to their nation. Encyclopedia Britannica identifies the movement's genesis with the late-18th
century American Revolution and French Revolution; other historians point specifically to the ultra-
nationalist party in France during the French Revolution.

The term nationalism was coined by Johann Gottfried Herder (nationalismus) during the late
1770s.Precisely where and when nationalism emerged is difficult to determine, but its development is
closely related to that of the modern state and the push for popular sovereignty that came to a head with
the French Revolution and the American Revolution in the late 18th century. Since that time, nationalism
has become one of the most significant political and social forces in history, perhaps most notably as a
major influence or postulate of World War I and especially World War II. Fascism, is a form of
authoritarian civic nationalism which stresses absolute loyalty and obedience to the state, whose purpose
is to serve the interests of its nation alone.

Critics of nationalism have argued that it is often unclear what constitutes a 'nation', or why a nation
should be the only legitimate unit of political rule. A nation is a cultural entity, and not necessarily a
political association, nor is it necessarily linked to a particular territorial area - although nationalists argue
that the boundaries of a nation and a state should, as far as possible, coincide. Philosopher A.C. Grayling
describes nations as artificial constructs, "their boundaries drawn in the blood of past wars". He argues
that "there is no country on earth which is not home to more than one different but usually coexisting
culture. Cultural heritage is not the same thing as national identity".
Nationalism is inherently divisive because it highlights differences between peoples, emphasizing an
individual's identification with their own nation. The idea is also potentially oppressive because it
submerges individual identity within a national whole, and gives elites or political leaders potential
opportunities to manipulate or control the masses. Much of the early opposition to nationalism was
related to its geopolitical ideal of a separate state for every nation. The classic nationalist movements of
the 19th century rejected the very existence of the multi-ethnic empires in Europe. Even in that early
stage, however, there was an ideological critique of nationalism. That has developed into several forms of
anti-nationalism in the western world. The Islamic revival of the 20th century also produced an Islamic
critique of the nation-state.
Iqra University

Cross Cultural Management

Name: Raza Naseem


Reg No.: 6555
Section: Wednesday 15:00-18:00
Date: 09/29/2010
Teacher: Mr Shahnawaz Ali

Assignment # 1

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