Center for North-American studies University of Economics, Bratislava September 30, 2010

 Introduction  What is Capitalism?  Capitalist Principles  Myths about Capitalism  Economic Crises / Crises of Capitalism  Future of Capitalism?

 Private Property  Freedom of Contract  Rule of Law  Use of Reason  Personal Liberty  Voluntary exchange of Goods: Free Trade  Democracy

 Protect Man’s Rights  Put this Retaliatory Force under Objective Control

 Freedom  Equality  Individualism  Democracy  Personal Property  Laissez-Faire

 Rule of Law ◦ Transaction costs ◦ Lower Number of Business Deals ◦ Expenses to Verify your Business Partners  Independent Judiciary ◦ High degree of Trust in Legal System  Common Law vs. Civil Law (Just vs. Legal) ◦ Common Law (Singapore, Australia, GBR)  Foreign Corrupt Practices Act ◦ Influences also business environment in the U.S.

 European Emigrants to the US  Hard Working  Entrepreneurial (BANKRUPTCIES)  Rule of Law  Can Do/Optimism Mentality  American Dream  Protestantism vs. Catholicism  Religion (U.S. 94%, Italy 88%, France 56%, Germany 50%)

 Conservatives (C) vs. Liberals (L) debate:  Capitalism works with values (C)  Winners must take care of Losers (L)  Forced help hurts everybody (C)  Redistribution and Regulation (L)  Redistribution discourages winners from producing and losers from trying (C)

 Public Opinions ( )  Welfare State vs. Freedom of Individual ◦ U.S. 34/58, GER 57/39, FRA 62/36, IT 71/24  Success in Life: External Forces vs. Individual ◦ U.S 32/65, GER 68/31, IT 66/31, FRA 54/44  Economic Competition is Positive ◦ U.S. 58, Germany 49, Italy 42, France 36

 Very Satisfied with Their Lives( ,%) ◦ U.S. 57, Italy 16, France 14, Germany 18  Life has improved in the last 5 years ◦ U.S. 49, Italy 42, France 35, Germany 22  Life will improve in the last 5 years ◦ U.S. 64, Italy 53, France 41, Germany 20

 Value of Free Time ◦ Europe vs. America ◦ Protestantism (Work is Blessing and Source of Happiness given by God) ◦ Opportunity to get rich in the U.S. is higher  Children should Learn Hard Work ◦ U.S. 60, France 50, Italy 36, Germany 22

 R&D Expenditures (GDP%) ◦ U.S. 2.67, France 2.2%, Germany 2.51%, Italy 1.07%  Growth in Production high-tech goods (2003) ◦ U.S. +419, France +242, Germany +52, Italy +69 ◦ Data in %

 Employment ◦ U.S. ( ) million ◦ France, Germany, Italy million  Real GDP per Capita (PPP, 2002) ◦ U.S. 34,000 USD ◦ France 24,000 USD ◦ Italy 25,000 USD  Labor Productivity ◦ U.S. (1996–2003) +3.09% ◦ Germany ( ) +1.6%

 American Capitalism is Very Positive (%) ◦ Italy 39 / 43 ◦ Germany 32 / 58 ◦ France 23 / 73 ◦ Slovakia 52 / 40 ◦ Ukraine 58 / 23 ◦ Uzbekistan 76 / 11 ◦ Former Communist Countries more Positive

 2010 Index of Economic Freedom ◦ 1. Hong Kong, 2. Singapore, 3. Australia, 8. U.S., 23. Germany, 64. France, 74. Italy  Economic Freedom of the World 2008 ◦ 1. Hong Kong, 2. Singapore, 3. new Zealand, 6. U.S., 24. Germany, 35. France, 66. Italy  World Bank Doing Business 2010 ◦ 1.Singapore, 2.New Zealand 3. Hong Kong 4. U.S. 25. Germany, 31. France, 78. Italy

 China Model - Free Market with Government Intervention Prevented Crises  Government Complete Control of Investments and Currency (Short Term Victory)  Corruption  Imbalances in Economy  Jimmy Lai: “System in China is Long-Term Unsustainable and will Collapse”

 Selfish – but results in cooperation  Greedy – but increased standard of living  Nationalistic – but U.S. multiethnic society  Cruel – but gives hope  Source: ◦ Ayn Rand: Capitalism-The Unknown Ideal

 Role of Government  Moral Consequences of Economic Growth ◦ Prosperity, Happiness, Rule of Law ◦ Winners and Losers  Capitalism is Amoral “NO SYSTEM CAN SURVIVE / FUNCTION WITHOUT MORAL/ETHICAL VALUES”

 2 different types of Legal Systems?  Country with most positive American Capitalism opinions?  What is ranking of U.S. according to Doing Business 2010?

Thank you for your Attention! Ondrej Socuvka