The Economic System of The United States of America

Darker Side

Despite such high levels of technological improvements and solid growth

Has higher levels of income and wealth inequality

Foreign indebtedness need the achievement of global balance

However, USA has a very high adaptable capability to form new institutional settings or advanced technology if needed.

Overall Evolution

19th Century was purely laissez-faire

1930 New Deal and 1960 Great Society Increased the involvement of the government

Actually USA experienced deregulation and other moves towards laissez-fair

Foreign Debt

USA has the World's larger Economy

Its increased level of foreign debt is almost unnoticeable because of other countries needs for Americans to buy their goods.

The Economic System of The United States of America

Mass Consumption Society

Americans work longer hours to enjoy high consumption

It is questionably sustainable due to the lower rates of savings affect individuals bankruptcies

Contemporary World

Great Society, welfare, medicare and other programmes by Johnson to reduce inequality

Inflation rised due to Vietnam War.

R. Reagan tend to deregulate US economy

High Tech boom 90s

Stock bubble 2008

World War II and Cold War

USA joined the fight and brought a new economic and politic view in the world.

For the UE the war brought economic wealth and situated the nation in a leading position among the world.

Bretton Woods

- World Bank

- International Monetary Fund

Fight for the lead position with the Soviet Union

World War I and Great Depression

USA remains neutral, economic growth due to trading arms to France and Great Britain

Gilded Age ended after the Crash of 29

Roosevelt implanted New Deal to promote economy growth during the Great Depression

Industrialization

Machines replaced hand labor

Division of labor was implanted

It originated a faster production, a new way to organize industry and new important inventions.

Fordism Line Production (mass production, rising productivity, lowering marginal cost)

Civil War (1861-1865)

Pro-slaves versus Abolitionists

Abraham Lincoln granted citizenship to slaves but Jim Crow laws

Reconstruction period oppressing Native Americans leads to expanding territory and industrialization (Steel Corporation, Standard Oil, etc.)

Constitution

Free Trading among the USA

Private Property

Individual Rights

Democratic Political System

Independence War (1775-1781)

British defeat lead to declaration of Independence and the Constitution.

USA was born with George Washington as its first President.

"Under capitalism, man exploits man. Under communism, it's just the opposite." - John Kenneth Galbraith

USA Throughout History

S. XVII European colones take over the East side of America and implant there their colonies

British gets control of the East Coast and originated the first 13 American colonies.

1 out of 5 colones was a slave

No representation in British Parliament

M- Form

Multidivisional form originated in the General Motors Corporation (1920)

Each division corresponded a U form controled by each managerial division leading to industrial conglomerates in the 1960s and now taking over the world

Rise of New Economy

1996 called out for a welfare reform

Apart from decreasing poverty, increasing employment caused a noticeable economic growth.

Technological advances increase productivity effectivness.

Inequality and Poverty

Despite of having achieved high incomes and good quality of life, United States has higher rates of inequality and poverty.

Equality started after WWII due to the incorporation of women and minorities to labor.

After the 70s inequality started to arise again, and distribution of income through welfare and other programs were implemented.

Regulation and Desregulation of American Corporations

1887 ICC to regulate rates of railroads

1890 Antitrust enforcement to control monopolies

1913 The Federal Reserve System for banking system

Regulation of airfairs, communications, and lately more focused on environmental issues

Nature of American Corporate Form

Ownership by stockholders

CEOs with little control by banks, workers, government etc. Part owners with stock options to reduce problems of ownership and control

J.Marshall declared a juridical identity of the corporation a legal person distinct from the owners. (1819)

Originated with the railroad in 1840s

Full time managers in decentralized line with staff hierarchy

Above managers, the CEO with strategic and investment decisions

To lessen distribution costs

U-Form

Leonor Bermejo

Adoración Maciñeira

International Comparative Economics