Discussion on the Underground Economy Essay Example | Topics and Well Written Essays - 1250 words

Discussion on the Underground Economy - Essay Example The aim of this paper is to discuss the ramifications of the underground economy in the United States and the effects that this has had on the social and economic development of the country. The most logical place to start a discussion about the underground economy is with the job market. There are a growing number of people in the United States that have found themselves out of work in recent years. Still needing money to survive, however, these people turn to jobs for individuals or companies that will pay them cash for the services that they may provide. This negates the official hiring process and enables people to keep the money that they earn. Naturally, there are advantages and disadvantages to this phenomenon. There are those that make the claim that anytime a person has cash in their pockets, it is good overall for the economy. Bills can be paid, goods and services purchased and an overall feeling of economic well being and achieved realized by those who would otherwise rema in unemployed. In some ways, those working on a purely cash basis provide an infusion of money into the economy on a daily basis. Such individuals are more likely to be daily purchasers of food and other sundry items, while being less likely to save. In addition, proponents of the underground economy point out that taxes are still being paid every time that cash is paid for an item or service in the marketplace. Many others claim that this part of the underground economy is harmful to society in numerous ways. First of all, employment and income taxes go unpaid and unrealized. Subsequently, those working in the underground economy go without benefits of any sort. If they are injured on the job for example, they will likely have no insurance with which to take care of their medical bills and their ‘employer’ will likely not claim responsibility. In addition, there are no guarantees of work, no implied sick or holiday time, and little recourse if there is an employment di spute. In essence, workers in the underground economy are left on their own and largely unregulated. Even though the jobs may pay them a daily wage, they are not legal and such workers would have a difficult time making a complaint should one arise. While so called day laborers depend on their daily jobs to survive, they are often paid a wage that is lower than industry standard. In addition, those that employ the day laborers end up saving money that should be going to pay employment, income, unemployment, and service taxes. This is billions of dollars annually that does not make its way back into society. In addition, if the cash that is made by working in the United States (or in other underground economies around the world) goes unspent, or is sent abroad, then there is no direct benefit to the country as a whole in terms of tax revenue. This would negate the argument that even day laborers benefit the overall economy because of the money they spend on goods and services. For th at argument to carry weight, there would need to be proof that the amount of cash spent outpaces the money would have been collected in taxes. Needless to say, this would be a tough argument to win. Another aspect of the underground economy in any given country can be seen in the black market. This is a marketplace where goods or services are traded in a completely illegal manner. What makes the black market a part of the under

A Comparison of the Economic Philosophies of Adam Smith, John Stuart Mi

As far back as man has been on earth, he has been driven towards building a community among his peers. Whether that is a community of hunters and gatherers who share whatever the day has brought to them within their tribe, or a larger community which within its structure lie the inner dwellings of division of labor and societal classes. Adam Smith (18th Century), John Stuart Mill (19th Century), and Karl Marx (19th Century) are of the same cloth, but in modern terms their community is referenced as a government, and they each have their own distinct opinions on the 'drive' instilled within human nature that shape their personal economic theories. I will be dissecting the views of each of these economists, in regards to the role of government within their envisioned society. While showcasing the difference in views, I want to focus on the subtle similarities that these famous economists shared within their economic process and their beliefs regarding human nature. The first economist we will discuss is Adam Smith. Before we discuss Smith's views, we will provide a brief description of the setting in which Smith was able to create his assumptions, and formulate his theories. Smith studied Social Philosophy at the University of Glasgow and the University of Oxford, the latter of which he was not as fond of. The primary economic theory at the time (18th Century) was mercantilism, which focused on foreign trade and a positive balance of trade (Net Imports > Net Exports;Trade Surplus). Around 1760, Smith was in France, which was horribly in debt due to the ruinous aiding of Americans against the British, amongst other reasons. Smith envisioned the government playing a larger role, one which consisted of protection through mercha... ...iety being tampered or an individual causing harm to others and deemed unfit. All of these economists looked out for the well being of mankind, even if their government-economic structures were polar opposites, they all had the intention of bettering the mankind. Some ideas translate better than others and in hindsight , a mixture of all these great economists ideas are what balances out a capitalist system. Works Cited Heilbroner, R. (1997). Teachings from the Worldly Philosophy. -: W.W. Norton & Company. Marx, K., & Engels, F. (2000). Manifesto of the Communist Party . Germany: Zodiac. Mill, J. S. (2001). On Liberty. Kitchener: Batoche Books. (Original work published 1859) Smith, A. (2005). AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Hazleton: A PENN STATE ELECTRONIC CLASSICS SERIES PUBLICATION. (Original work published 1776)

Multinational Corporations Essay

Multinational corporations have existed since the beginning of overseas trade. They have remained a part of the business scene throughout history, entering their modern form in the 17th and 18th centuries with the creation of large, European-based monopolistic concerns such as the British East India Company during the age of colonization. Multinational concerns were viewed at that time as agents of civilization and played a pivotal role in the commercial and industrial development of Asia, South America, and Africa. By the end of the 19th century, advances in communications had more closely linked world markets, and multinational corporations retained their favorable image as instruments of improved global relations through commercial ties. The existence of close international trading relations did not prevent the outbreak of two world wars in the first half of the twentieth century, but an even more closely bound world economy emerged in the aftermath of the period of conflict. In more recent times, multinational corporations have grown in power and visibility, but have come to be viewed more ambivalently by both governments and consumers worldwide. Indeed, multinationals today are viewed with increased suspicion given their perceived lack of concern for the economic well-being of particular geographic regions and the public impression that multinationals are gaining power in relation to national government agencies, international trade federations and organizations, and local, national, and international labor organizations. Despite such concerns, multinational corporations appear poised to expand their power and influence as barriers to international trade continue to be removed. Furthermore, the actual nature and methods of multinationals are in large measure misunderstood by the public, and their long-term influence is likely to be less sinister than imagined. Multinational corporations share many common traits, including the methods they use to penetrate new markets, the manner in which their overseas subsidiaries are tied to their headquarters operations, and their interaction with national governmental agencies and national and international labor organizations. WHAT IS A MULTINATIONAL CORPORATION? As the name implies, a multinational corporation is a business concern with operations in more than one country. These operations outside the company’s home country may be linked to the parent by merger, operated as subsidiaries, or have considerable autonomy. Multinational corporations are sometimes perceived as large, utilitarian enterprises with little or no regard for the social and economic well-being of the countries in which they operate, but the reality of their situation is more complicated. There are over 40,000 multinational corporations currently operating in the global economy, in addition to approximately 250,000 overseas affiliates running cross-continental businesses. In 1995, the top 200 multinational corporations had combined sales of $7. 1 trillion, which is equivalent to 28. 3 percent of the world’s gross domestic product. The top multinational corporations are headquartered in the United States, Western Europe, and Japan; they have the capacity to shape global trade, production, and financial transactions. Multinational corporations are viewed by many as favoring their home operations when making difficult economic decisions, but this tendency is declining as companies are forced to respond to increasing global competition. The World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank are the three institutions that underwrite the basic rules and regulations of economic, monetary, and trade relations between countries. Many developing nations have loosened trade rules under pressure from the IMF and the World Bank. The domestic financial markets in these countries have not been developed and do not have appropriate laws in place to enable domestic financial institutions to stand up to foreign competition. The administrative setup, judicial systems, and law-enforcing agencies generally cannot guarantee the social discipline and political stability that are necessary in order to support a growth-friendly atmosphere. As a result, most multinational corporations are investing in certain geographic locations only. In the 1990s, most foreign investment was in high-income countries and a few geographic locations in the South like East Asia and Latin America. According to the World Bank’s 2002 World Development Indicators, there are 63 countries considered to be low-income countries. The share of these low-income countries in which foreign countries are making direct investments is very small; it rose from 0. 5 percent 1990 to only 1. 6 percent in 2000. Although foreign direct investment in developing countries rose considerably in the 1990s, not all developing countries benefited from these investments. Most of the foreign direct investment went to a very small number of lower and upper middle income developing countries in East Asia and Latin America. In these countries, the rate of economic growth is increasing and the number of people living at poverty level is falling. However, there are still nearly 140 developing countries that are showing very slow growth rates while the 24 richest, developed countries (plus another 10 to 12 newly industrialized countries) are benefiting from most of the economic growth and prosperity. Therefore, many people in the developing countries are still living in poverty. Similarly, multinational corporations are viewed as being exploitative of both their workers and the local environment, given their relative lack of association with any given locality. This criticism of multinationals is valid to a point, but it must be remembered that no corporation can successfully operate without regard to local social, labor, and environmental standards, and that multinationals in large measure do conform to local standards in these regards. Multinational corporations are also seen as acquiring too much political and economic power in the modern business environment. Indeed, corporations are able to influence public policy to some degree by threatening to move jobs overseas, but companies are often prevented from employing this tactic given the need for highly trained workers to produce many products. Such workers can seldom be found in low-wage countries. Furthermore, once they enter a market, multinationals are bound by the same constraints as domestically owned concerns, and find it difficult to abandon the infrastructure they produced to enter the market in the first place. The modern multinational corporation is not necessarily headquartered in a wealthy nation. Many countries that were recently classified as part of the developing world, including Brazil, Taiwan, Kuwait, and Venezuela, are now home to large multinational concerns. The days of corporate colonization seem to be nearing an end. Multinational corporations follow three general procedures when seeking to access new markets: merger with or direct acquisition of existing concerns; sequential market entry; and joint ventures. Merger or direct acquisition of existing companies in a new market is the most straightforward method of new market penetration employed by multinational corporations. Such an entry, known as foreign direct investment, allows multinationals, especially the larger ones, to take full advantage of their size and the economies of scale that this provides. The rash of mergers within the global automotive industries during the late 1990s are illustrative of this method of gaining access to new markets and, significantly, were made in response to increased global competition. Multinational corporations also make use of a procedure known as sequential market entry when seeking to penetrate a new market. Sequential market entry often also includes foreign direct investment, and involves the establishment or acquisition of concerns operating in niche markets related to the parent company’s product lines in the new country of operation. Japan’s Sony Corporation made use of sequential market entry in the United States, beginning with the establishment of a small television assembly plant in San Diego, California, in 1972. For the next two years, Sony’s U. S. operations remained confined to the manufacture of televisions, the parent company’s leading product line. Sony branched out in 1974 with the creation of a magnetic tape plant in Dothan, Alabama, and expanded further by opening an audio equipment plant in Delano, Pennsylvania, in 1977. After a period of consolidation brought on by an unfavorable exchange rate between the yen and dollar, Sony continued to expand and diversify its U. S. operations, adding facilities for the production of computer displays and data storage systems during the 1980s. In the 1990s, Sony further diversified it U. S. facilities and now also produces semiconductors and personal telecommunications products in the United States. Sony’s example is a classic case of a multinational using its core product line to defeat indigenous competition and lay the foundation for the sequential expansion of corporate activities into related areas. Finally, multinational corporations often access new markets by creating joint ventures with firms already operating in these markets. This has particularly been the case in countries formerly or presently under communist rule, including those of the former Soviet Union, eastern Europe, and the People’s Republic of China. In such joint ventures, the venture partner in the market to be entered retains considerable or even complete autonomy, while realizing the advantages of technology transfer and management and production expertise from the parent concern. The establishment of joint ventures has often proved awkward in the long run for multinational corporations, which are likely to find their venture partners are formidable competitors when a more direct penetration of the new market is attempted. Multinational corporations are thus able to penetrate new markets in a variety of ways, which allow existing concerns in the market to be accessed a varying degree of autonomy and control over operations. While no one doubts the economic success and pervasiveness of multinational corporations, their motives and actions have been called into question by social welfare, environmental protection, and labor organizations and government agencies worldwide. National and international labor unions have expressed concern that multinational corporations in economically developed countries can avoid labor negotiations by simply moving their jobs to developing countries where labor costs are markedly less. Labor organizations in developing countries face the converse of the same problem, as they are usually obliged to negotiate with the national subsidiary of the multinational corporation in their country, which is usually willing to negotiate contract terms only on the basis of domestic wage standards, which may be well below those in the parent company’s country. Offshore outsourcing, or offshoring, is a term used to describe the practice of using cheap foreign labor to manufacture goods or provide services only to sell them back into the domestic marketplace. Today, many Americans are concerned about the issue of whether American multinational companies will continue to export jobs to cheap overseas labor markets. In the fall of 2003, the University of California-Berkeley showed that as many as 14 million American jobs were potentially at risk over the next decade. In 2004, the United States faced a half-trillion-dollar trade deficit, with a surplus in services. Opponents of offshoring claim that it takes jobs away from Americans, while also increasing the imbalance of trade. When foreign companies set up operations in America, they usually sell the products manufactured in the U. S. to American consumers. However, when U. S. companies outsource jobs to cheap overseas labor markets, they usually sell the goods they produce to Americans, rather than to the consumers in the country in which they are made. In 2004, the states of Illinois and Tennessee passed legislation aimed at limiting offshoring; in 2005, another 16 states considered bills that would limit state aid and tax breaks to firms that outsource abroad. Insourcing, on the other hand, is a term used to describe the practice of foreign companies employing U. S. workers. Foreign automakers are among the largest insourcers. Many non-U. S. auto manufacturers have built plants in the United States, thus ensuring access to American consumers. Auto manufacturers such as Toyota now make approximately one third of its profits from U. S. car sales. Social welfare organizations are similarly concerned about the actions of multinationals, which are presumably less interested in social matters in countries in which they maintain subsidiary operations. Environmental protection agencies are equally concerned about the activities of multinationals, which often maintain environmentally hazardous operations in countries with minimal environmental protection statutes. Finally, government agencies fear the growing power of multinationals, which once again can use the threat of removing their operations from a country to secure favorable regulation and legislation. All of these concerns are valid, and abuses have undoubtedly occurred, but many forces are also at work to keep multinational corporations from wielding unlimited power over even their own operations. Increased consumer awareness of environmental and social issues and the impact of commercial activity on social welfare and environmental quality have greatly influenced the actions of all corporations in recent years, and this trend shows every sign of continuing. Multinational corporations are constrained from moving their operations into areas with excessively low labor costs given the relative lack of skilled laborers available for work in such areas. Furthermore, the sensitivity of the modern consumer to the plight of individuals in countries with repressive governments mitigates the removal of multinational business operations to areas where legal protection of workers is minimal. Examples of consumer reaction to unpopular action by multinationals are plentiful, and include the outcry against the use of sweatshop labor by Nike and activism against operations by the Shell Oil Company in Nigeria and PepsiCo in Myanmar (formerly Burma) due to the repressive nature of the governments in those countries. Multinational corporations are also constrained by consumer attitudes in environmental matters. Environmental disasters such as those which occurred in Bhopal, India (the explosion of an unsafe chemical plant operated by Union Carbide, resulting in great loss of life in surrounding areas) and Prince William Sound, Alaska (the rupture of a single-hulled tanker, the Exxon Valdez, causing an environmental catastrophe) led to ceaseless bad publicity for the corporations involved and continue to serve as a reminder of the long-term cost in consumer approval of ignoring environmental, labor, and safety concerns. Similarly, consumer awareness of global issues lessens the power of multinational corporations in their dealings with government agencies. International conventions of governments are also able to regulate the activities of multinational corporations without fear of economic reprisal, with examples including the 1987 Montreal Protocol limiting global production and use of chlorofluorocarbons and the 1989 Basel Convention regulating the treatment of and trade in chemical wastes. In fact, despite worries over the impact of multinational corporations in environmentally sensitive and economically developing areas, the corporate social performance of multinationals has been surprisingly favorable to date. The activities of multinational corporations encourage technology transfer from the developed to the developing world, and the wages paid to multinational employees in developing countries are generally above the national average. When the actions of multinationals do cause a loss of jobs in a given country, it is often the case that another multinational will move into the resulting vacuum, with little net loss of jobs in the long run. Subsidiaries of multinationals are also likely to adhere to the corporate standard of environmental protection even if this is more stringent than the regulations in place in their country of operation, and so in most cases create less pollution than similar indigenous industries.

Learn Chemistry - Help, Tutorials, Problems Quizzes

Learn chemistry! Get chemistry help, tutorials, example problems, self-quizzes, and chemistry tools so you can learn the concepts of general chemistry. Introduction to ChemistryLearn about what chemistry is and how the science of chemistry is studied.What Is Chemistry?What Is the Scientific Method? Math BasicsMath is used in all the sciences, including chemistry. To learn chemistry, you need to understand algebra, geometry, and some trig, as well as be able to work in scientific notation and perform unit conversions.Accuracy Precision ReviewSignificant FiguresScientific NotationPhysical ConstantsMetric Base UnitsTable of Derived Metric UnitsMetric Unit PrefixesUnit CancellingTemperature ConversionsExperimental Error Calculations Atoms and MoleculesAtoms are the basic building blocks of matter. Atoms join together to form compounds and molecules. Learn about the parts of the atom and how atoms form bonds with other atoms.Basic Model of the AtomBohr ModelAtomic Mass Atomic Mass NumberTypes of Chemical BondsIonic vs Covalent BondsRules for Assigning Oxidation NumbersLewis Structures and Electron Dot ModelsIntroduction to Molecular GeometryWhat Is a Mole?More About Molecules MolesLaw of Multiple Proportions StoichiometryStoichiometry describes the proportions between atoms in molecules and reactants/products in chemical reactions. Learn about how matter reacts in predictable ways so that you can balance chemical equations.Types of Chemical ReactionsHow to Balance EquationsHow to Balance Redox ReactionsGram to Mole ConversionsLimiting Reactant Theoretical YieldMole Relations in Balanced EquationsMass Relations in Balanced Equations States of MatterThe states of matter are defined by the structure of matter as well as whether it has a fixed shape and volume. Learn about the different states and how matter transforms itself from one state to another.States of MatterPhase Diagrams Chemical ReactionsOnce you have learned about atoms and molecules, youre ready to examine the type of chemical reactions that can occur.Reactions in WaterTypes of Inorganic Chemical Reactions Periodic TrendsThe properties of the elements exhibit trends based on the structure of their electrons. The trends or periodicity can be used to make predictions about the nature of the elements.Periodic Properties TrendsElement Groups SolutionsIts important to understand how mixtures behave.Solutions, Suspensions, Colloids, DispersionsCalculating Concentration GasesGases exhibit special properties based on having no fixed size or shape.Introduction to Ideal GasesIdeal Gas LawBoyles LawCharles LawDaltons Law of Partial Pressures Acids BasesAcids and bases are concerned with the actions of hydrogen ions or protons in aqueous solutions.Acid Base DefinitionsCommon Acids BasesStrength of Acids BasesCalculating pHBuffersSalt FormationHenderson-Hasselbalch EquationTitration BasicsTitration Curves Thermochemistry Physical ChemistryLearn about the relationships between matter and energy.Laws of ThermochemistryStandard State ConditionsCalorimetry, Heat Flow and EnthalphyBond Energy Enthalpy ChangeEndothermic Exothermic ReactionsWhat Is Absolute Zero? KineticsMatter is always in motion! Learn about the motion of atoms and molecules, or kinetics.Factors that Affect Reaction RateCatalystsChemical Reaction Order Atomic Electronic StructureMuch of the chemistry that you learn is associated with electronic structure, since electrons can move around much more easily than protons or neutrons.Valences of the ElementsAufbau Principle Electronic StructureElectron Configuration of the ElementsAufbau Principle Electronic StructureNernst EquationQuantum Numbers Electron OrbitalsHow Magnets Work Nuclear ChemistryNuclear chemistry is concerned with the behavior of protons and neutrons in the atomic nucleus.Radiation RadioactivityIsotopes Nuclear SymbolsRate of Radioactive DecayAtomic Mass Atomic AbundanceCarbon-14 Dating Chemistry Practice Problems Index of Worked Chemistry Problems Printable Chemistry Worksheets Chemistry Quizzes How to Take a Test Atom Basics Quiz Atomic Structure Quiz Acids Bases Quiz Chemical Bonds Quiz Changes in State Quiz Compound Naming Quiz Element Number Quiz Element Picture Quiz Units of Measurement Quiz General Chemistry Tools Periodic Table Chemistry Glossary Chemical Structures - Find the structures for molecules, compounds, and functional groups.