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Beginning in late 1978, the Chinese leadership has been reforming the economy from a Soviet-style centrally planned economy to a more market-oriented economy that is still within a rigid political framework under Party control. The reforms replaced collectivization of Chinese agriculture with privatization of farmlands, increased the responsibility of local authorities and industry managers, allowed a wide variety of smallscale enterprises to flourish, and promoted foreign investment. Price controls were also relaxed. These changes resulted in mainland China's shift from a planned economy to a mixed economy. China became a member of the World Trade Organization in 2001. China‘s accession into the World Trade Organization (WTO) was a goal achieved after nearly fifteen years of exhausting negotiations carrying many legal, political and social implications for all parties. China was finally able to convince WTO members that without China, the WTO is only partially a worldwide trade organization. The road to the signature of the final agreement of accession was long, but these difficulties pale in comparison to the problems that have not yet been tackled in terms of achieving real implementation of its provisions throughout the territory of the People‘s Republic of China (PRC). China‘s accession surely presents the world trading system with opportunities, but also poses the challenge of integrating a market with strong structural, behavioural and cultural constraints. The government emphasizes personal income and consumption by introducing new management systems to help increase productivity. The government also focuses on foreign trade as a major vehicle for economic growth, which led to 5 Special Economic Zones (SEZ: Shenzhen, Zhuhai, Shantou, Xiamen, Hainan Province) where investment laws are relaxed so as to attract foreign capital. Since the 1990s, SEZs and similar concepts have been expanded to major Chinese cities, including Shanghai and Beijing. The result has been a 6-fold increase of GDP since 1978. Chinese economic development is among the fastest in the world, and has been growing at an average annual GDP rate of 9.4% for the past 25 years. At the end of 2005, the PRC became the fourth largest economy in the world by exchange rate, and the second largest in the world after the United States by purchasing power parity at US$8,158 trillion. But with its large population this still gives an average GDP per person of only an estimated US$8,000 (2006), about 1/5th that of the United States. Mainland China has a reputation as being a low-cost manufacturer, which caused notable disputes in global markets. This is largely because Chinese corporations can produce many products far more cheaply than other parts of Asia or Latin America, and because expensive products produced in developed countries like the United States are in large part uncompetitive compared to European or Asian goods. Another factor is the unfavorable exchange rate between the Chinese yuan and the United States dollar to which it was pegged.

On July 21, 2005 the People's Bank of China announced that it would move to a floating peg, allowing its currency to move against the United States dollar by 0.5% (effective 18May-2007, which was earlier 0.3%) a day, while 3% a day against other currencies. Many high-tech American companies have difficulty exporting to China due to US federal government restrictions, which exacerbated the trade gap between the PRC and the US, widespread software piracy and illegal copying of intellectual property (a major US export), and perceived low quality of US goods. On the other hand, China runs a trade deficit with Taiwan and South Korea, importing more from those nations than exports. China runs a large but diminishing trade surplus with Japan (slight deficit if Hong Kong is included). There has been a significant rise in the Chinese standard of living in recent years. Today, a rapidly declining 10 percent of the Chinese population is below the poverty line. 90.9% of the population is literate, compared to 20% in 1950. The life expectancy in China is the third highest in East Asia, after Japan and South Korea. There is a large wealth disparity between the coastal regions and the remainder of the country. To counter this potentially destabilizing problem, the government has initiated the China Western Development strategy (2000), the Revitalize Northeast China initiative (2003), and the Rise of Central China policy (2004), which are all aimed at helping the interior of China to catch up. China is currently undergoing major reforms in its financial sector, which has been plagued by nonperforming loans made in the 1980s and early 1990s to inefficient stateowned enterprises. The government has spent five years and more than US$400 billion cleaning bad loans off the books of the big four state-owned banks, helping prepare them to become shareholder corporations. By the end of 2006, China had restructured three of its four largest banks and listed them publicly. China's largest bank, the Industrial and Commercial Bank of China (ICBC) in October 2006 raised US$21.6 billion in the world's largest initial public offering (IPO) in history. ICBC is now the world's second largest bank in market value, after only Citibank. These highly successful IPOs have helped ease the government's burden and spur further structural reforms in China's nascent banking industry.


Germany has the largest economy in Europe and the third largest economy in the world, behind the United States and Japan. It is ranked fifth in the world in terms of purchasing power parity. The export of goods is an essential part of the German economy and one of the main factors of its wealth. According to the World Trade Organization, Germany is the world's top exporter with $1.133 trillion exported, from the beginning of 2006 (Germany's exports to other Eurozone countries are included in this total). It has a large trade surplus (165 billion euros in 2006). In the service sector, Germany ranks second behind the United States. Most of the country's exports are in engineering, especially in automobiles, machinery, metals, and chemical goods. In terms of total capacity to generate electricity from wind power, Germany is first in the world and it is also the main exporter of wind turbines. Although problems created by reunification in 1990 have begun to diminish, the standard of living remains higher in the western half of the country. Germans continue to be concerned about a relatively high level of unemployment, especially in the former East German states where unemployment tops 18%. In spite of its extremely good performance in international trade, domestic demand has stalled for many years because of stagnating wages and consumer insecurity. Germany's government runs a restrictive fiscal policy and has cut numerous regular jobs in the public sector. But while regular employment in the public sector shrank, "irregular" government employment such as "one euro" jobs (temporary low-wage positions), government supported selfemployment, and job training increased. The national economy has nonetheless shown signs of improvement in recent years, the economics magazine Handelsblatt declaring it one of the most competitive in the Eurozone. Economists for the Institute for Economic Research in Berlin expect Germany's economic growth to increase consistently over the next two years.


The United States has a capitalist mixed economy, which is fueled by abundant natural resources, a well-developed infrastructure, and high productivity. According to the International Monetary Fund, the United States GDP of more than $13 trillion constitutes 20 percent of the gross world product. Only the collective GDP of the European Union is greater. The country ranks eighth in the world in nominal GDP per capita and fourth in GDP per capita at purchasing power parity. The United States is the largest importer of goods and second largest exporter. Canada, China, Mexico, Japan, and Germany are its top trading partners. The private sector constitutes the bulk of the economy, with government activity accounting for 12.4 percent of the GDP. The economy is postindustrial, with the service sector contributing over 75 percent of GDP. The United States remains an industrial power, and is the world's leading producer of electrical and nuclear energy, as well as liquid natural gas, aluminum, sulfur, phosphates, and salt. Agriculture accounts for only 1 percent of GDP but 60 percent of the world's agricultural production. The country's leading cash crop is marijuana. Three quarters of U.S. business firms have no payroll, but they account for only a small fraction of business receipts. Firms with payrolls of 500 or more employ 49.1 percent of all paid workers; in 2002, they accounted for 59.1 percent of business receipts. The United States ranks third in the World Bank's Ease of Doing Business Index. Compared to Europe, U.S. property and corporate income taxes are generally higher, while labor and, particularly, consumption taxes are lower. The U.S. national debt is the world's largest; in 2005, it was 23 percent of the global total. As a percentage of GDP, U.S. debt ranked thirtieth out of 120 countries for which data is available. Foreign entities hold 27.5 percent of the U.S. debt, up from 13 percent in 1988. In 2005, 155 million persons were employed with earnings, of whom 80 percent worked in full-time jobs. The majority, 79 percent, were employed in the service sector. About 12 percent of American workers were unionized, compared to 30 percent in Western Europe. The U.S. ranks number one in the ease of hiring and firing workers, according to the World Bank. Americans tend to work considerably more hours annually than workers in other developed nations, taking fewer and shorter vacations. Between 1973 and 2003, a year's work for the average American grew by 199 hours. Partly as a result, the United States maintains the highest labor productivity in the world. However, it no longer leads the world in productivity per hour as it did from the 1950s through the early 1990s; workers in Norway, France, Belgium, and Luxembourg are now more productive per hour. Spending on the social safety net is relatively low: the United States redistributes about 9 percent of GDP through social protection programs, compared to 19 percent in the European Union.

Income and social class
According to the U.S. Census Bureau, the pretax median household income in 2005 was $46,326; the two-year average ranged from $60,246 in New Jersey to $34,396 in Mississippi. Using purchasing power parity exchange rates, these income levels are similar to those found in other postindustrial nations such as Norway ($61,294 [mean]) and the United Kingdom ($39,915). Approximately 13 percent of Americans were below

the federally designated poverty line. The number of poor Americans, nearly 37 million, was actually 4 million more than in 2001, the bottom year of the most recent U.S. recession. Between 1967 and 2005, median household income rose 30.6 percent in constant dollars, largely due to the growing number of dual-earner households. In 2005, median income for nonelderly households declined for the fifth consecutive year. Though the standard of living has improved for nearly all classes since the late 1970s, income inequality has grown substantially. The share of income received by the top 1 percent has risen considerably while the share of income of the bottom 90 percent has fallen, with the gap between the two groups being roughly as large in 2005 as in 1928. According to the standard Gini index, income inequality in the United States is higher than in any European nation. Some economists, such as Alan Greenspan, see rising income inequality as a cause for concern. While American social classes lack defined boundaries, sociologists point to social class as a crucial societal variable. Occupation, educational attainment, and income are used as the main indicators of socioeconomic status. Dennis Gilbert of Hamilton College has proposed a system, adapted by other sociologists, with six social classes: an upper, or capitalist, class consisting of the wealthy and powerful (1%), an upper middle class consisting of highly educated professionals (15%), a middle class consisting of semiprofessionals and craftsmen (33%), a working class consisting of clerical and bluecollar workers who conduct highly routinized tasks (33%), and two lower classes—the working poor (13%) and a largely unemployed underclass (12%). Where it was once common for middle-class households to employ domestic servants, many domestic tasks are now outsourced to the service industry. Wealth is highly concentrated: The richest 10 percent of the adult population possesses 69.8 percent of the country's household wealth, the second-highest share of any democratic developed nation. The top 1 percent possesses 33.4 percent of net wealth, including more than half of the total value in publicly traded stocks. Though the American Dream, or the perception that Americans enjoy high social mobility, played a key role in attracting immigrants to the United States, particularly in the late 1800s, some analysts find that the United States has relatively low social mobility compared to Western Europe and Canada.

Science, technology, and transportation
The United States has been a leader in scientific research and technological innovation since the late nineteenth century, attracting immigrants such as Albert Einstein. The bulk of research and development funding, 64 percent, comes from the private sector. The United States leads the world in scientific research papers and impact factor. In 1876, Alexander Graham Bell was awarded the first patent for the telephone. The laboratory of Thomas Edison developed the phonograph, the first long-lasting light bulb, and the first viable movie camera. In the early twentieth century, the automobile companies of Ransom Olds and Henry Ford pioneered assembly line manufacturing. The Wright brothers, in 1903, made what is recognized as the "first sustained and controlled heavierthan-air powered flight."[98] During World War II, the United States developed nuclear weapons, ushering in the atomic age. The space race produced rapid advances in rocketry, material science, computers, and many other areas. The United States largely

developed the Arpanet and its successor, the Internet. Americans enjoy high levels of access to technological consumer goods. Almost half of U.S. households have broadband Internet service. The country is the primary developer and grower of genetically modified food; more than half of the world's land planted with biotech crops is in the United States. As of 2003, there were 759 automobiles per 1,000 Americans, compared to 472 per 1,000 inhabitants of the European Union the following year. Approximately 39 percent of personal vehicles are vans, SUVs, or light trucks. The average American adult (accounting for all drivers and nondrivers) spends 55 minutes behind the wheel every day, driving 29 miles. The civil airline industry is entirely privatized, while most major airports are publicly owned. The five largest airlines in the world by passengers carried are all American; American Airlines is number one. Of the world's thirty busiest passenger airports, sixteen are in the United States, including the busiest, HartsfieldJackson Atlanta International Airport (ATL). The U.S. intercity passenger rail system is relatively weak. Only 9 percent of total U.S. work trips employ mass transit, compared to 38.8 percent in Europe. Bicycle usage is minimal, well below European levels.


More than a decade after the collapse of the Soviet Union in 1991, Russia is trying to further develop a market economy and achieve much more consistent economic growth. Russia saw its comparatively developed centrally planned economy contract severely for five years, as the executive and the legislature dithered over the implementation of reforms and Russia's aging industrial base faced a serious decline. However, Russia's economy has adapted relatively quickly from the world's largest centrally planned economy to a market economy. Russia ended 2006 with its eighth straight year of growth, averaging 6.7% annually since the financial crisis of 1998. Although high oil prices and a relatively cheap ruble initially drove this growth, since 2003 consumer demand and, more recently, investment have played a significant role. And Russia is well ahead of most other resource-rich countries in its economic development, with a long tradition of education, science, and industry. Over the last five years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position since the 1998 financial crisis. The federal budget has run surpluses since 2001 and ended 2006 with a surplus of 9% of GDP. Over the past several years, Russia has used its stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club creditors and the IMF. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $315 billion at yearend 2006, the third largest reserves in the world (currently it stands at $420.2 billion). Russia's 2006 GDP was $1.723 trillion (est. PPP), the 9th highest in the world, with GDP growth of 6.8%. Growth was driven by non-tradable services and goods for the domestic market, as opposed to oil or mineral extraction and exports. The Russian economy has once again outperformed expectations, and the International Monetary Fund forecasts that Russia's GDP will grow 7% in 2007. The economic development of the country has been extremely uneven geographically: the Moscow region contributes one-third of the country's GDP while having only a tenth of its population. While the huge capital region of Moscow is an affluent metropolis, much of the country, especially indigenous and rural communities in Asia, lags significantly behind. Nevertheless, market integration is being felt throughout the country. The middle class has grown from just 8 million in 2000 to 55 million in 2006, estimates Expert, a market research firm in Moscow. According to the Federal State Statistics Service of Russia, the monthly nominal average salary in January 2007 was 11,410 rubles (about $437 nominally; about $793 PPP), 26.6 percent higher than in January 2006. Russia's macroeconomic performance in recent years has been impressive. High oil prices and large capital inflows have contributed importantly to this success, but a principal factor has been the combination of strong growth in productivity, real wages, and consumption. Very high levels of education and societal involvement achieved by the

majority of the population, including women and minorities, secular attitudes, mobile class structure, and better integration of various minorities into the mainstream culture set Russia far apart from the majority of the so-called developing countries and even some developed nations. The country is also benefiting from rising oil prices and has been able to very substantially to reduce its formerly huge foreign debt. However, equal redistribution of capital gains from the natural resource industries to other sectors is still a problem. Nonetheless, since 2003, exports of natural resources started decreasing in economic importance as the internal market has strengthened considerably, largely stimulated by intense construction, as well as consumption of increasingly diverse goods and services. Knowing the importance of oil and gas to the economy, the Stabilization Fund of the Russian Federation was formed by the government in January 2004. This fund takes in revenues from oil and gas exports and is designed to help offset oil market volatility. Russia has the largest known natural gas reserves of any state on Earth, along with the second largest coal reserves, and the eighth largest oil reserves. It is the world's leading natural gas exporter and the second leading oil exporter.


Lenin (April 22, 1870 – January 21, 1924), was a Russian revolutionary, a communist politician, the main leader of the October Revolution, the first head of the Russian Soviet Socialist Republic and from 1922, the first de facto leader of the Soviet Union, and the primary theorist of Leninism, an extension of Marxist theory. Leninism refers to various related political and economic theories elaborated by Bolshevik revolutionary leader Vladimir Lenin, and by other theorists who claim to be carrying on Lenin's work. Leninism builds upon and elaborates the ideas of Marxism, and serves as a philosophical basis for Communism. The term "Leninism" itself did not exist during Lenin's life. It came into widespread use only after Lenin ended his active participation in the Soviet government due to a series of incapacitating strokes shortly before his death. Grigory Zinoviev popularized the term at the fifth congress of the Communist International (Comintern). Leninism had become one of the dominant branches of Marxism since the establishment of the Soviet Union. Leninism's direct theoretical descendants are Marxism-Leninism associated with Joseph Stalin and Trotskyism, associated with Leon Trotsky. Stalin and Trotsky were associates of Lenin who became the leaders of the two major political and theoretical factions that developed in the Soviet Union after Lenin's death. Proponents of each theory (including as Stalin and Trotsky themselves) often deny that the other is a "real" Leninist theory, and claim that their own interpretation is the truest successor to Lenin's ideas. The doctrines of V. I. Lenin (1870-1924), especially his core contributions—on the party, the state, imperialism, and revolution—to Marxist theory. In What Is To Be Done? (1902) Lenin addressed the question of party organization. The book's specific intention was to criticize the ‗economists'  ‘ stress upon legal struggles, which Lenin argued lost sight of Social Democracy's maximum programme which was to challenge for state power. He later admitted that in denigrating minimum demands he had ‗gone too far in the opposite direction‘ and What Is To Be Done? was not republished after 1917. Lenin distinguished between trade union and socialist consciousness. Those who promoted the idea of spontaneous revolutionary activity by the proletariat were really abdicating political leadership. Left to itself the working class would inevitably adopt bourgeois ideology (although Lenin wrote, in 1905, that ‗the working class is instinctively, spontaneously social democratic‘ (The Reorganization of the Party)  ). What was needed was a vanguard party of professional revolutionaries. Its strategy and tactics should be rooted in the working class and its task was to lead the latter to a socialist consciousness. Lenin argued for the creation of parallel secret and mass organizations. The 1903 Bolshevik-Menshevik split revealed opposing views on the nature of revolution and how far Lenin was moving away from what was regarded as Marxist orthodoxy. In The Development of Capitalism in Russia (1899) Lenin had followed Plekhanov in arguing that Russia was already capitalist but, because the bourgeoisie was weak, it was

left to the proletariat to assume the tasks of the democratic revolution. Socialism was a distant prospect. However, the 1905 revolution caused a radical shift in Lenin's thinking. In Two Tactics of Social Democracy in the Democratic Revolution, he eschewed any alliance with the liberals who had sided with Tsarism against the revolutionary movement. The revolution would still have a bourgeois character but would be directed by ‗a revolutionary democratic dictatorship of the proletariat and the peasants‘. Traditionally Marxists had regarded the peasantry as a conservative even reactionary class. Lenin maintained an ambivalent attitude towards it throughout his life but he became convinced that the social weight of the peasants would determine the immediate outcome of the revolution. When the Provisional Government refused to implement land reform after February 1917, Lenin placed the Bolsheviks firmly behind the peasants' demand for land. His 1905 writings had indicated that there might be some ‗growing over‘ between the democratic and socialist revolutions. Imperialism, the Highest Stage of Capitalism (1916) presented the possibility of an immediate socialist revolution based upon Lenin's analysis of a fundamental change in the nature of capitalism—from competitive to monopoly. Banking cartels made enormous profits through exporting capital to backward countries; some of the repatriated profit was used to create a workers' aristocracy in Western Europe and so block the development of revolutionary consciousness. However, global capitalism and superexploitation provoked national self-determination movements and the contradictions of uneven development in peripheral countries (like Russia) which Lenin termed ‗the weakest links‘. Additionally, economic rivalry between the imperialist powers would result in war and international revolution. By 1917 Lenin had reached the same conclusion as Trotsky—the idea of a continuous transition between the democratic and socialist revolutions. In the April Theses he rejected conditional support for the Provisional Government and demanded that the Bolsheviks agitate for ‗All Power to the Soviets‘. After government repression of the Bolsheviks in July, he realized that a peaceful development of the revolution was not possible and advised the party to plan for insurrection. Whilst in hiding before October, Lenin wrote State and Revolution, which was a libertarian reappraisal of Marx and Engels' views on the withering away of the state, stressing the commune rather than the dictatorship of the proletariat as the organizational form for the transition to socialism and barely mentioning the role of the party. Lenin rejected both parliamentarism (anticipating the closure of the Constituent Assembly by the Soviet government in January 1918) and reformism, making a distinction between bourgeois and socialist democracy (‗democracy for the people and not democracy for the money bags‘). However, the revolutionary optimism of State and Revolution quickly evaporated in the post-1917 period. Amidst foreign intervention and civil war, the ‗withering away‘ became increasingly problematic as a monolithic system emerged with centralized control by the party, the repression of opposition, and the decimation of independent working-class activity. Accused of state terrorism by socialist critics, Lenin responded

with works such as Left Wing Communism—An Infantile Disorder and The Proletarian Revolution and the Renegade Kautsky (both 1919) which attempted to justify revolutionary violence. In his last years, however, and particularly after being incapacitated by a succession of strokes, he was preoccupied by the problems of cultural backwardness, the urban-rural dichotomy, and the bureaucratization of the state and party. His Testament of December 1922 called for greater political control over the bureaucracy, and warned against Stalin, but was suppressed by him. Possibly the most distinctive feature of ‗Leninism‘ was what György Lukács (in Lenin, 1924) called its ‗revolutionary realpolitik; a concrete, unschematic, unmechanistic, purely praxis-oriented thought‘. Lenin's opposition to dogmatism in both theory and practice has been described as opportunism and as an imaginative adaptation of Marxist methodology to changing historical circumstances.

Karl Marx

Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. Marx addressed a wide range of issues; he is most famous for his analysis of history, summed up in the opening line of the Communist Manifesto (1848): ―The history of all hitherto existing society is the history of class struggles‖. Marx believed that capitalism would be displaced by radical socialism which in turn would develop into a communism - a classless society. Often called the father of communism, Marx was both a scholar and a political activist. On the one hand, he argued that his analysis of capitalism revealed that the contradictions within capitalism would themselves bring about its end:


The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable. — (The Communist Manifesto)[1]


On the other hand, Marx wrote that capitalism would end through the organized actions of an international working class: "Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence." (from The German Ideology) While Marx was a relatively obscure figure in his own lifetime, his ideas began to exert a major influence on workers' movements shortly after his death. This influence was given added impetus by the victory of the Marxist Bolsheviks in the Russian October Revolution, and there are few parts of the world which were not significantly touched by Marxian ideas in the course of the twentieth century. The relation of Marx to "Marxism" is a point of controversy. Marxism remains influential and controversial in academic and political circles. In his book "Marx's 'Das Kapital'" (2006), biographer Francis Wheen reiterates David McLellan's observation that since Marxism had not triumphed in the West, "it had not been turned into an official ideology and is thus the object of serious study unimpeded by government controls." The American Marx scholar Hal Draper once remarked, "there are few thinkers in modern history whose thought has been so badly misrepresented, by Marxists and antiMarxists alike." The legacy of Marx's thought is bitterly contested between numerous tendencies who claim to be Marx's most accurate interpreters, including MarxistLeninism, Trotskyism, Maoism, and libertarian Marxism.

Marx's philosophy hinges on his view of human nature. Along with the Hegelian dialectic, Marx inherited a disdain for the notion of an underlying invariant human nature. Sometimes Marxists express their views by contrasting ―nature‖ with ―history.‖

Sometimes they use the phrase ―existence precedes consciousness.‖ In either case, who a person is determined by where and when he is — social context takes precedence over innate behavior; or, in other words, one of the main features of human nature is adaptability. Nevertheless, Marxian thought rests on the fundamental assumption that it is human nature to transform nature, and he calls this process of transformation "labour" and the capacity to transform nature "labour power." For Marx, this is a natural capacity for physical activity, but it is intimately tied to the active role of human consciousness:


A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. — (Capital, Vol. I, Chap. 7, Pt. 1)


Marx did not believe that all people worked the same way, or that how one works is entirely personal and individual. Instead, he argued that work is a social activity and that the conditions and forms under and through which people work are socially determined and change over time. Marx's analysis of history is based on his distinction between the means / forces of production, literally those things such as land, natural resources, and technology, that are necessary for the production of material goods, and the relations of production, in other words, the social and technical relationships people enter into as they acquire and use the means of production. Together these comprise the mode of production; Marx observed that within any given society the mode of production changes, and that European societies had progressed from a feudal mode of production to a capitalist mode of production. Marx believed that the means of production change more rapidly than the relations of production (for example, we develop a new technology, such as the Internet, and only later do we develop laws to regulate that technology). For Marx this mismatch between (economic) base and (social) superstructure is a major source of social disruption and conflict. Marx understood the "social relations of production" to comprise not only relations among individuals, but between or among groups of people, or classes. As a scientist and materialist, Marx did not understand classes as purely subjective (in other words, groups of people who consciously identified with one another). He sought to define classes in terms of objective criteria, such as their access to resources. For Marx, different classes have divergent interests, which is another source of social disruption and conflict. Conflict between social classes being something which is inherent in all human history:


The history of all hitherto existing society is the history of class struggles. — (The Communist Manifesto, Chapter 1)


Marx was especially concerned with how people relate to that most fundamental resource of all, their own labor power. Marx wrote extensively about this in terms of the problem of alienation. As with the dialectic, Marx began with a Hegelian notion of alienation but developed a more materialist conception. For Marx, the possibility that one may give up ownership of one's own labor — one's capacity to transform the world — is tantamount to being alienated from one's own nature; it is a spiritual loss. Marx described this loss in terms of commodity fetishism, in which the things that people produce, commodities, appear to have a life and movement of their own to which humans and their behavior merely adapt. This disguises the fact that the exchange and circulation of commodities really are the product and reflection of social relationships among people. Under capitalism, social relationships of production, such as among workers or between workers and capitalists, are mediated through commodities, including labor, that are bought and sold on the market. Commodity fetishism is an example of what Engels called false consciousness, which is closely related to the understanding of ideology. By ideology they meant ideas that reflect the interests of a particular class at a particular time in history, but which are presented as universal and eternal. Marx and Engels' point was not only that such beliefs are at best half-truths; they serve an important political function. Put another way, the control that one class exercises over the means of production includes not only the production of food or manufactured goods; it includes the production of ideas as well (this provides one possible explanation for why members of a subordinate class may hold ideas contrary to their own interests). Thus, while such ideas may be false, they also reveal in coded form some truth about political relations. For example, although the belief that the things people produce are actually more productive than the people who produce them is literally absurd, it does reflect (according to Marx and Engels) that people under capitalism are alienated from their own labor-power. Another example of this sort of analysis is Marx's understanding of religion, summed up in a passage from the preface to his 1843 Contribution to the Critique of Hegel's Philosophy of Right:


Religious suffering is, at one and the same time, the expression of real suffering and a protest against real suffering. Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people. — (Contribution to the Critique of Hegel's Philosophy of Right)


Whereas his Gymnasium senior thesis argued that the primary social function of religion was to promote solidarity, here Marx sees the social function in terms of political and economic inequality. Moreover, he provides an analysis of the ideological functions of religion: to reveal ―an inverted consciousness of the world.‖ He continues: ―It is the immediate task of philosophy, which is in the service of history, to unmask selfestrangement in its unholy forms, once [religion,] the holy form of human selfestrangement has been unmasked‖. For Marx, this unholy self-estrangement, the ―loss of man,‖ is complete for the sphere of the proletariat. His final conclusion is that for

Germany, general human emancipation is only possible as a suspension of private property by the proletariat.

Political economy
Marx argued that this alienation of human work (and resulting commodity fetishism) is precisely the defining feature of capitalism. Prior to capitalism, markets existed in Europe where producers and merchants bought and sold commodities. According to Marx, a capitalist mode of production developed in Europe when labor itself became a commodity — when peasants became free to sell their own labor-power, and needed to do so because they no longer possessed their own land. People sell their labor-power when they accept compensation in return for whatever work they do in a given period of time (in other words, they are not selling the product of their labor, but their capacity to work). In return for selling their labor power they receive money, which allows them to survive. Those who must sell their labor power are "proletarians." The person who buys the labor power, generally someone who does own the land and technology to produce, is a "capitalist" or "bourgeoisie." The proletarians inevitably outnumber the capitalists. Marx distinguished industrial capitalists from merchant capitalists. Merchants buy goods in one market and sell them in another. Since the laws of supply and demand operate within given markets, there is often a difference between the price of a commodity in one market and another. Merchants, then, practice arbitrage, and hope to capture the difference between these two markets. According to Marx, capitalists, on the other hand, take advantage of the difference between the labor market and the market for whatever commodity is produced by the capitalist. Marx observed that in practically every successful industry input unit-costs are lower than output unit-prices. Marx called the difference "surplus value" and argued that this surplus value had its source in surplus labour, the difference between what it costs to keep workers alive and what they can produce. The capitalist mode of production is capable of tremendous growth because the capitalist can, and has an incentive to, reinvest profits in new technologies. Marx considered the capitalist class to be the most revolutionary in history, because it constantly revolutionized the means of production. But Marx argued that capitalism was prone to periodic crises. He suggested that over time, capitalists would invest more and more in new technologies, and less and less in labor. Since Marx believed that surplus value appropriated from labor is the source of profits, he concluded that the rate of profit would fall even as the economy grew. When the rate of profit falls below a certain point, the result would be a recession or depression in which certain sectors of the economy would collapse. Marx understood that during such a crisis the price of labor would also fall, and eventually make possible the investment in new technologies and the growth of new sectors of the economy. Marx believed that this cycle of growth, collapse, and growth would be punctuated by increasingly severe crises. Moreover, he believed that the long-term consequence of this process was necessarily the enrichment and empowerment of the capitalist class and the

impoverishment of the proletariat. He believed that were the proletariat to seize the means of production, they would encourage social relations that would benefit everyone equally, and a system of production less vulnerable to periodic crises. In general, Marx thought that peaceful negotiation of this problem was impracticable, and that a massive, well-organized and violent revolution would be required, because the ruling class would not give up power without violence. He theorized that to establish the socialist system, a dictatorship of the proletariat - a period where the needs of the working-class, not of capital, will be the common deciding factor - must be created on a temporary basis. As he wrote in his "Critique of the Gotha Program", "between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat." While he allowed for the possibility of peaceful transition in some countries with strong democratic institutional structures (e.g. Britain, the US and the Netherlands), he suggested that in other countries with strong centralized state-oriented traditions, like France and Germany, the "lever of our revolution must be force."

Multinational corporation
A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or enterprise that manages production establishments or delivers services in at least two countries. Multinational corporations (MNC) are often divided into three broad groups: Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. Diversified multinational corporations manage production establishments located in different countries that are neither horizontally or vertically integrated. Very large multinationals have budgets that exceed those of many countries. Of the 100 largest economies in the world, 51 are multinational corporations. They can have a powerful influence in international relations, given their large economic influence in politicians' representative districts, as well as their extensive financial resources available for public relations and political lobbying. Multinationals have played an important role in globalization. Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity) within. To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and labor standards. This process of becoming more attractive to foreign investment can be characterized as a race to the bottom. There is a dispute as to which was the first MNC. Some have argued that the Knights Templar, founded in 1118, became a multinational when it stumbled into banking in 1135. However, others claim that the British East India Company or the Dutch East India Company (Dutch:Vereenigde Oostindische Compagnie) were in fact the first proper multinationals. Large multinational corporations can have a powerful influence in international relations, given their large economic influence in politicians' representative districts, as well as their extensive financial resources available for public relations and political lobbying. Multinationals have played an important role in globalization. Prospective country locations for MNC production establishments, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity) within a region. To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and

labor standards. This process of becoming more attractive to foreign investment can be characterized as a race to the bottom, a push towards greater freedom for corporate bodies, or both. An inaccurate claim is that out of the 100 largest economies in the world, 51 are multinational corporations.[1] This claim is based on a miscalculation, where two numbers describing totally different things are compared: the GDP of nations to gross sales of corporations. The problem with the comparison is that GDP takes into account only the final value, whereas gross sales don't measure how much was produced outside the company. According to Swedish economist Johan Norberg, if we were to compare nations and corporations, we should be comparing GDP to goods only produced within the particular company (gross sales do not take into account goods purchased from 3rd party vendors and resold, just as GDP does not take into account imported goods). That correction would make only 37 of 100 largest economies corporations and all of them would be in bottom box: only 5 corporations would be in top 50. Because of their size, multinationals can have a significant impact on government policy, primarily through the threat of market withdrawal.[2] For example, in an effort to reduce health care costs, some countries have tried to force pharmaceutical companies to license their patented drugs to local competitors for a very low fee, thereby artificially lowering the price. When faced with that threat, multinational pharmaceuticals firms have simply withdrawn from the market, which often leads to limited availability of advanced drugs. In those cases, governments have been forced to back down from their efforts. Similar corporate and government confrontations have occurred when governments tried to force companies to make their intellectual property public in an effort to gain technology for local entrepreneurs. When companies are faced with the option of losing their core competitive advantage (technology) and losing a national market, they may choose to withdraw from the national market. This withdrawal often causes governments to change policy. Countries that have been most successful in this type of confrontation with multinational corporations are large countries such as India and Brazil, which have viable indigenous market competitors. Multinational corporate lobbying is directed at a range of business concerns, from tariff structures to environmental regulations. There is no unified multinational perspective on any of these issues. Companies that have invested heavily in pollution control mechanisms may lobby for very tough environmental standards in an effort to force non-compliant competitors into a weaker position. For every tariff category that one multinational wants to have reduced, there is another multinational that wants the tariff raised. Even within the U.S. auto industry, the fraction of a company's imported components will vary, so some firms favor tighter import restrictions, while others favor looser ones. In addition to efforts by multinational corporations to affect governments, there are many actions taken by governments to affect corporate behavior. The threat of nationalization (forcing a company to sell its local assets to the government or to other local nationals) or changes in local business laws and regulations limit a multinational's power. The mobility of capital brought by multinational corporations can create "a race to the bottom". This refers to efforts by governments to change their laws and regulations to become more corporate friendly in order to attract multinational investment. As they become more responsive to the interests of multinational corporations, there is the risk that governments can become less responsive to local constituents. Examples of this are laws that bar unionization or permit lax environmental standards.

Those laws are often chosen because governments also find the corporate-friendly rules comfortable. China, for example, bars unionization in most cases, but it also bars almost every other civil society organization above the very local level that is not government controlled.

List of multinational corporations
                            ABN-Amro Aditya Birla Accenture Airbus Apple Computer AOL Atari AXA Bacardi Barrick Gold Corporation Billabong Boeing Bombardier BP Brantano Footwear Cadbury Coca-Cola Citigroup Dell Dutch East India Company EA Exxon Epson Fiat Fonterra Ford General Electric General Motors                           Google Halliburton Hearst Corporation Hewlett Packard Hitachi Honda Natwest HSBC Huawei Hutchison Whampoa Limited IBM Infosys Ingersoll Rand Jardine Matheson Krispy Kreme Kyocera LG Lockheed Martin Maxis McDonalds Microsoft Monsanto Masterfoods Nestlé News Corporation Nike, Inc.                           Nintendo Nissan Nokia Nortel Networks Parmalat PepsiCo Pfizer Philips Procter & Gamble Shell Samsung Schlumberger Sony Square/Square Enix Starbucks Tata Consultancy Services Toshiba Toyota Vodafone Wal-Mart Stores, Inc. Wipro Ltd. The Walt Disney Company Videocon Xerox Yahoo! Yakult