Econ Research Paper

timer Asked: Mar 29th, 2017
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Question Description

Readings for paper:

  1. Hernando DeSoto, The Mystery of Capital.
  2. Richard McGregor, The Party: The Secret World of China's Communist Rulers.


In Free to Choose, Milton Friedman makes the case that capitalism, i.e. free markets combined with governments that follow The Do Nothing Policy produce prosperity and freedom. In lecture, production possibilities frontiers were used to show the mechanism by which capitalism produces wealth, i.e. specialization according to comparative advantage and exchange. The history of the 20th century is replete with examples of countries that have followed just such a policy of free market capitalism and experienced large increases in total and per capita wealth plus created stable peaceful political societies characterized by respect for individual rights and maximizing personal freedom, e.g. Japan, Taiwan, Korea, Singapore, and, until the communist Chinese takeover, Hong Kong. In the 20th century, countries that were already prosperous and free that continued choosing capitalist systems became more prosperous, e.g. the United States, Western Europe, Canada, and Australia.

A conundrum of the “capitalism produces prosperity and freedom” policy are countries that have capitalist economies but haven’t produced much prosperity and are frequently but not exclusively characterized by bouts of politically based violence and oppressive abusive dictatorships, e.g. most middle eastern countries, most of South and Central America, Mexico, India, Russia, and until the last 20 years communist China. In The Mystery of Capital, Hernando DeSoto addresses this conundrum and points out that adopting capitalism is required but not sufficient to produce U.S. and western European levels of prosperity and freedom. DeSoto argues that adopting capitalism isn’t enough. Countries have to choose a capitalist economic system plus do something else.

A corollary of the ““capitalism produces prosperity and freedom” idea is the notion that a country can adopt capitalism and produce prosperity but an oppressive dictator can prevent prosperity from producing freedom for ordinary people. Communist China is an example.

Paper Assignment

Section 1. What is the something else that DeSoto argues is necessary for a capitalist economy to produce wealth?

Section 2. Is Communist China a capitalist economy?. To what extent does Communist China have that something else.

Section 3. In your opinion and given your answers in Part 1 and 2, will the dictators in Communist China be successful in using a capitalist system to produce prosperity but deny Milton Friedman’s thesis that prosperity will create individual freedom and the end to dictatorship?

Illustrate your answers with examples from the two books.

Notes and Submission Instructions

The paper assignment asks you to answer very specific questions. It is not a book report or an opportunity to wax eloquent on a subject of your choosing. The assignment is to produce answers to specific questions. Your score will be determined by your answer to these questions and the integration of the examples into your argument.

The paper should be no less than 1500 words. There is no maximum length.

The paper should be saved as a Microsoft Word document (.doc or .docx filetype) and uploaded to Moodle using the link on the assignment page.

The filename of the paper should follow the following format:

Last Name, First Name-Econ 160 Term Paper Part X, Fall 2016.docx

Example: Ng, Kenneth-Econ 160 Term Paper Part 1, Fall 2016.docx

Failure to follow instructions will be penalized. The most common penalties are for submitting the paper in the wrong format (make sure it is a Microsoft Word document with a .docx or .doc file type) and incorrectly naming the file.

Students are responsible for reading and conforming to the CSUN Policy on Plagiarism. This policy can be accessed using the link on Moodle Course Outline.

Tutor Answer

School: UC Berkeley

Good luck in your study and if you need any further help in your
assignments, please let me know.Goodbye.



Capitalism and Communism
Institution Affiliation



Capitalism and Communism
Capitalism and communism are two terms that will remain to be different in their
political and at the same time, economic ideologies. Therefore, in other words, capitalism and
communism will never be together. One of the major known difference between capitalism and
communism is in the regard of the resources and the means of production. In communism, the
community or the society owns the resources or the means of production. However, for the sake
of capitalism, the resources or the means of production lies with the private owner.
Besides, the profits of every individual involved in communist are shared equally, but in
the capitalist, the entire profit belongs to the private owner of the resources and the production.
For the communists, the society is above the individuals while on capitalist, the freedom of the
individual is the society or the state. Therefore, about both the communism and capitalism, they
can never match, and they will continue to be different always. Concerning the cases of
Hernando Desoto, on the mystery of capital and at the same time, Richard McGregor, the Party:
the secret world of China’s communist rules, there will be the analyzing the actual differences
between the two elements and how they have affected the growth of nations across the world.
Section 1
Hernando DeSoto is a name that crops up in the regular readings related with
development. Therefore, concerning Desoto, something else is necessary for the capitalist
economy to be in a position of production of wealth. According to Hernando, the capitalist
nations will not be able to produce wealth if they are not able to come up with a formal system of
property rights. The right of owning properties is much important, and it should not be...

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