Instructions:

Must include 1 citation from the textbook reading material provided. After citing the textbook write (textbook) so I will know this is where in need to insert the author’s info. If citing lesson write (lesson)

I need 1-2 paragraphs on the following:

GLOBAL MARKETS

Several countries around the world are transitioning to market economies; the most significant of these are China and Russia. What do you think the impact will be on other countries around the world as these two countries become even more significant in the global economy? What are some examples of this impact?

Lesson reading:

The Global Political Economy

The paths that take nations to democracy are rarely straight, and never identical. The same can be said for those societies opting to embrace a market economy. The most successful economic system currently is capitalism, but capitalism has evolved and continues to evolve differently in various countries around the world. Political scientists measure these changes alongside the systems' roots in, and influence on, the political world.

For half of the last century, many countries around the world operated under an economic system different from capitalism. The Cold War between the communist Soviet Union and the capitalist Western world has guided much of the international and domestic politics of the past 60 years. As communism eroded in the face of global markets, however, even the largest of the communist superpowers (Russia and China) moved toward market-based economies. Capitalist countries have also seen changes in the market over the past 75 years. The "free market" does not exactly exist in any democratic country because concerns about social well-being have caused most governments to establish some kind of safety net to protect populations from the harsh realities of the market. Programs such as Social Security are examples of this safety net in the United States.

Theoretical distinctions can be made between different democratic countries, and their economic development. An example of such a distinction presented in the field of political science categorizes countries' economic systems based on how active the government is in the economy. Gosta Esping-Anderson (1990) writes in the book The Three Worlds of Welfare Capitalism that these economies can be categorized as laissez-faire, corporatist, or social democratic. Laissez-faire economies are those that remain most closely tied to the free market. Governments in these states have little democratic control over the economy and tend to allow the market to control prices and income distribution. Corporatist economies have strong centralized governments attempting to balance income distribution and market concerns between the democratic population and the private sector. Social-democratic countries are those in which the government owns many social services and heavily regulates private industry.

As you might imagine, with so many different economies operating in the world, the international sphere as a whole has an economy of its own. Countries have to compete for business, and businesses have to compete for consumers. Trade agreements and restrictions are established to make these competitions equitable and productive. As Russia and China become increasingly powerful on the world economic stage, the international political and economic landscape will continue to change. The emergence of new economic powers is not the only pressure on the international economy, however. Political issues such as wages, immigration, export controls, taxes, and employment all factor into decisions that impact global markets. Citizens are going to have to make difficult decisions relating to many concerns of this new global environment in the coming years. Should national sovereignty be given to international organizations? Should businesses that pay low wages in other countries be allowed to import goods? Must governments ultimately regulate the economy, or can the free market solve these problems without interference?