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The market price of labor will always converge to subsistence
Question 1.
The market price of labor will always converge to subsistence, according to David Ricardo’s subsistence wage theory. Wages will fall if labor supply is increased, resulting in a labor shortage (Kurz, 2011). When wages rose above subsistence levels, the population grew until the increased labor force brought down wages. Employee remuneration was determined by the amount of money available and the size of the workforce. Wages rise and fall in lockstep with the labor force. The size of the pay fund fluctuated throughout time, but it was always fixed. Legislation to raise wages would fail owing to the presence of a single pre-determined pay.
Adam Smith’s supply and demand conceptualizes that workers act in their own best interests drawing labor to jobs where it was most needed, and the employment conditions that promised benefit to everyone. Grieve (2019) notes that Smith also emphasized the significance of paying employees for the cost of learning new skills, which is a pillar of contemporary human-capital theory. Smith also claimed that in order to fund population growth, a rising nation’s pay must be larger than its subsistence rate.
Subsistence theories emphasize the supply side of the labor market while ignoring demand. Changes in labor supply, they claim, drive actual wages down (that is, for basic needs such as food and shelter). Assumedly, Smith assumed that labor demand could only expand in lockstep with labor demand (Kurz, 2011). The wage-fund idea assumed a pre-existing “fund” of resources for paying wages. Smith claims this hypothetical fund represents the wealthy’s extra cash (Grieve, 2019), that may be utilized to employ other people.
Question 2.
David Ricardo argued that unrestrained global trade facilitates comparative advantage. Ricardo proposed the law of diminishing marginal returns, which asserts that when additional resources are pooled with a constant resource, the output contribution decreases. Ricardo was opposed to the protectionist agricultural Corn Laws that restricted wheat importation (Siddiqui, 2018). In favor of free trade, Ricardo established the notion of comparative costs, known today as comparative advantage. The idea was that a country that trades for goods it can purchase cheaper elsewhere is better off than one that manufactures them. According to Ricardo, gains emerge because each country specializes in producing goods with reduced comparative costs.
David Ricardo’s idea of absolute advantage is bolstered by Smith’s promotion of free commerce and competition. Countries with no advantages over others are excluded from international commerce (Siddiqui, 2018). One of the main strengths of the Ricardian profit model is that it allows countries, and by extension organizations, to understand the impact of differences in technology and resource endowments on the overall profitability. It also allows a highlight of the differences in demand and thus looks at the advantages of economies of scale in the production process. The theory’s primary flaw is that comparative advantage only assesses static advantages.
The rent on a piece of land is determined by its productive capacity; certain lands are more fertile than others (Bridel, 2018). As a result, there exist land classes. Differential rent is the difference in the yields of excellent and inferior lands.
According to the Ricardian model, countries will export their most productive goods. Countries that focus only in exporting are considered extreme cases. The concept is based on the rise of global trade and the specialization of countries, which makes it difficult to identify their flaws.
Question 3.
The concept of labor-based value was utilized by Karl Marx and David Ricardo in an attempt to explain why certain items on the market were traded at specified relative prices. As per the concept, the value of a commodity is determined by the average number of work hours required to produce it (Kurz, 2011). The value of an economic good is defined by the amount of work necessary to manufacture it, according to the labor theory of value. If two goods represent the same amount of labor time, they will trade at the same price or at a ratio determined by the relative amounts of labor time represented by each.
According to Karl Marx, the value of a product is based on how many hours it takes to make. Marx thought that the theory could help explain when a worker sells something to a capitalist for money (Garegnani, 2018). Labor power is the ability of a worker to make money. How long does it take for society to feed, clothe, and shelter the worker so that they can work? Marx said that this is how the value of labor power is determined. Workers’ long-term pay is based on how many hours of work it takes to make a worker.
There is a conflict between Marx’s labor theory of value and the tendency of profit rates to equalize across industries as the cause of the transformation problem. Labor-intensive firms will profit more than capital-intensive enterprises, according to the labor theory of value, because work is the source of both value and surplus value.
Question 4.
The Currency School, led by Robert Torrens, believed that to prevent difficulties with the circulation of paper bank notes, the metallic standard should be used to back national money. The idea was to focus on the nation’s gold reserves to back money, which caused money fluctuations. The Banking School, led by Thomas Tooke, claimed that the changes were caused by fluctuations in money demand, focusing on general liquidity rather than the metallic standard’s role (Skidelsky, 2018). This point was important in the conversation. According to the Banking School, fluctuations in metal reserves were to be used to manage the Bank’s overall commitments (which included deposits) over the long term. The Currency School, on the other hand, contended that only notes should be subject to the same laws as other forms of currency (Skidelsky, 2018).
If the rule of reflux is followed, banks do not produce an excessive quantity of money since any surplus money is immediately returned to the issuer bank through deposits, loan repayments, or base money redemption (Gómez Betancourt & Pierre Manigat, 2018). With this doctrine, banks are allowed to issue short-term loans in order to aid in commerce and other profitable pursuits. Consequently, the loans in this situation were not considered to be inflationary. Short-term loans were regarded non-inflationary at this period; thus they could be used to boost the economy’s money supply. According to this theory, gold loans are the only source of money production that is efficient.
Question 8.
The overall price level of a nation is related to its money supply, as presented in the quantity theory. Further, if an economy’s money supply doubles, so will its price levels. A similar number of products will then cost twice as much (Pazos, 2018). The Cambridge and Fisherian approaches are only two sides of the same coin. The Cambridge approach focuses on flow, whereas the Fisherian method concentrates on stock. The Fisher method is concerned with money supply, whereas the Cambridge approach is concerned with money demand (Laidler, 2014). Money is defined differently in both approaches. The Fisherian method emphasizes money’s exchange function, whereas the Cambridge method emphasizes money’s value storage role.
Interest rates are critical in both theory and practice of monetary policy and are used by central banks as both a tool and an indicator variable. Central banks attempt to contain excessive inflation by altering nominal interest rates in response to changes in prices. Entrepreneurs (investors) can now profit from merchant capitalists when loan interest rates are lower than real interest rates, according to Wicksell’s two-interest-rate inflation hypothesis (Fontana, 2007). As a result, entrepreneurs increase their bank borrowing and investments. When banks charge interest rates on loans that are greater than market rates, the reverse occurs.
References
Bridel, P. (2018). Sismondi as a critic of Ricardo: On rent, Corn Laws and methodology. In Money, Finance and Crises in Economic History (pp. 77-91). Routledge.
Fontana, G. (2007). Why money matters: Wicksell, Keynes, and the new consensus view on monetary policy. Journal of Post Keynesian Economics, 30(1), 43-60.
Garegnani, P. (2018). On the labour theory of value in Marx and in the Marxist tradition. Review of Political Economy, 30(4), 618-642.
Gómez Betancourt, R., & Pierre Manigat, M. (2018). James Steuart and the making of Karl Marx’s monetary thought. The European Journal of the History of Economic Thought, 25(5), 1022-1051.
Grieve, R. H. (2019). On Terry Peach’s Unconvincing “Reconsideration” of Adam Smith’s Theory of Value. History of political economy, 51(4), 753-777.
Kurz, H. D. (2011). On David Ricardo’s Theory of Profits: The Laws of Distribution Are’Not Essentially Connected with the Doctrine of Value,’. The history of economic thought, 53(1), 1-20.
Laidler, D. E. (2014). The golden age of the quantity theory. Princeton University Press.
Pazos, J. (2018). Valuation of utility tokens based on the quantity theory of money. The Journal of the British Blockchain Association, 1(2), 4318.
Siddiqui, K. (2018). David Ricardo’s comparative advantage and developing countries: Myth and reality. International Critical Thought, 8(3), 426-452.
Skidelsky, R. (2018). Money and Government. Yale University Press.
The Management Issue of China’s NGOs
The Management Issue of China’s NGOs
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Introduction
Management is one of the most important elements in any organization. It involves the organization, coordination, directing, and administration of various tasks and activities within the organization with an aim of helping in the achievement of organizational missions and goals. Through effective management, an organization is able to properly assemble, organize, arrange, and integrate different factors of production and other resources in an effective and efficient manner making it easier in the achievement of both short and long term organizational objectives. Additionally, management is also important in an organization as it ensures effective resource utilization, personality development, problem solving, and development of change all of which contribute to the achievement of organizational goals. With this in mind, it is therefore imperative to that, management is important in the growth, development, and success of any organization. However, despite the various advantages associated with effective management, there are also various issues such as corruption, lack of funding, and understaffing that affect the management of various organizations such as NGOs in different parts of the world and especially China.
Non-government organizations (NGOs) in China
In China, Non-government organizations (NGOs) such as the China Youth Development Foundation are increasingly becoming important elements in changing the social landscape (Hasmath & Hsu, 2008). From micro perspective to a macro perspective, Non-government organizations have a huge potential of improving and widening the space to enable Chinese nationals engage in the social and human development and growth of the nation at large. Charged with such important responsibility, the Chinese government therefore views these organizations as aides in the delivery of different social services such as health care (promoting the awareness of HIV/AIDS), education (helping ensure that there is education for all), and environmental protection where they engage in different programs such as recycling. However, despite the different important roles these organizations perform in the society, there exist various issues such as the management issue which affect their ability to continue operating effectively. In the case of China’s NGOs such as China Youth Development Foundation, the management issue is one of the common problems that need to be addressed if indeed these organizations are to operate effectively.
Management Issue of Non-governmental organizations in China
To ensure effective operations and efficiency of NGOs such as China Youth Development Foundation, corruption and mishandling of finances is major management issue that needs to be addressed (Lu, 2005). In many organizations both governmental and non-governmental, corruption has for years been a major management issue that in one way or another affects the operations of the organization. In many Non-governmental organizations, embezzlement of funds by different individuals within the organization, for personal benefit is a common practice that affects the organization objectives both in the short and long term. It is imperative to note that, a vast majority of Non-governmental organizations obtain their funding to conduct their activities from charity events involving members of the general public. Therefore, occurrence of this problem is viewed as case of organizational mishandling of finances which lowers the society trust and as result affecting their major source income. For instance, the case of China Youth Development Foundation diverting approximately 100 million RMB from its donation finances so as to operate a private business was considered a corruption case which involved mishandling of the organization’s finances (Hasmath & Hsu, 2008). Bearing this in mind, it is therefore clear to note that the occurrence of these social evils was as a result of management issue within the organization. Lack of proper management to ensure that operations within the organization are carried out effectively and with justified reasons was lacking. In addition, Lu (2005) indicates that, for most of these Non-governmental organizations in China where leaders engage in corruption, it is clear to note that the chaotic states involved in their financial issues is inevitable due to the fact that, it is note the lack of skill and knowledge on the part of the NGO or its employees that result to cases of corruption, but its due to bad financial management and leadership by design. Therefore, this indicates that the case of management issue in many Non-governmental organizations in China such as China Youth Development Foundation is the reason behind some of the major social evils like corruption and mishandling of organizational resources Lu (2005). In regard to this, it is imperative to adopt and institute good governance which enables good and proper practices among NGOs due to the fact that they are becoming increasingly important in the delivery of various social services, a responsibility that is no longer solely performed by the state government.
Issues at the China Youth Development Foundation
China Youth Development Foundation, aims at helping young individuals in different part of China build capacities and lives of their own while improving the environment so that there can be development for young people (Lu, 2005). This is achieved by the provision of aid services, conducting social advocacy, and giving a voice based on the interest of these young individuals in china (Ma, 2002). However, despite the significant goals, lack of strategic planning is a major management issue facing China Youth Development Foundation. While it is clear that ideas are the basis of success in any organization, the lack of management’s strategic planning can be a challenging issue. In the case of China Youth Development Foundation, management’s inability to come up with a better strategic plan can be an issue in helping and enabling the youths reach their capacities, which in many results to confusion and straying away from their initially planned objectives. In other cases, the Lack of strategic planning among Non-governmental organizations such as China Youth Development Foundation occurs when leaders become more interested in attaining personal objectives and goals than the healthy development of their NGOs. In this case, most of these NGOs leaders engage themselves only in different projects with an aim of attracting and attaining fame themselves rather than doing the concrete work the NGOs were established for.
Poor Management and Unclear Goals
Lack of clearly defined goals and proper strategic management is a major management issue affecting most of China’s Non-governmental organizations including China Youth Development Foundation. According to Lu (2005) findings, most Non-governmental organizations in China declare themselves fit to undertake any project, even if it is tangentially related to their own stated missions and objectives. In this case, it clear most of the Non-governmental organizations in China will undertake any project assigned to them as long as it brings funding to their course. As a result, this indeed is considered a management issue as it diverts the Non-governmental organizations from pursuing their clearly stated goals and objectives. It is such diversions that impair the long term organizational develop of these organizations. In such NGOs where money is the motivation effect, most these of these organizations will only operate and work with programs involving money, otherwise they remain dormant. Similarly, the employee will also avail themselves work if there is any programs or activities to done. In regard to this, it is therefore clear that there is no reason at all for these NGOs to burden themselves with any specific targets or goals that do not involve money to provide funding. Bearing this in mind, it therefore clears that the Lack of clearly defined goals is a major management issue facing a majority of Non-governmental organizations in China.
Over-Reliance on the State for Assistance
Depending on the state is another issue facing the management of many Non-governmental organizations in China including the China Youth Development Foundation from functioning well based on the their own terms and ideas. Instead, the state provides these organizations with rules which they are supposed to operate with. In regard to this, it is therefore clear that dependency on the state does not only constrain their actions and goals, but it also affects the NGOs’ attitude towards the disadvantaged and vulnerable youths who should be the sole purpose of its existence.
Lack of Independent Decision-Making
With the states monitoring all Non-governmental organizations moves, China Youth Development Foundation became incapable of functioning beyond the stated conditions without getting different kinds of support from the government. According to Lu (2005), Chinese Non-governmental organizations derive all their benefits from their dependence on the government. However, even with the close dependence relationship with the government, these organizations such as the China Youth Development Foundation cannot engage in any programs or activities which are not approved by the government since they lack influence on the state practices and policies. This indicates that they are not equal as partners in their relationship and therefore the reason why Non-governmental organizations such as China Youth Development Foundation function under and in accordance with the government terms. By working under the government China Youth Development Foundation first tackles the tasks provided by the government to do it its place and afterwards can go ahead with its stated objectives and goals. By having no say in the established relationship with the state, Non-governmental organizations like China Youth Development Foundation indicates that these should have already known their boundaries (Lu, 2005). For instance, China Youth Development Foundation can only influence the government towards certain actions only if the government wants and is willing to be influenced. In this regard, it is therefore clear that dependency on the state is a major management issue facing most Non-governmental organizations in China. Through state dependency, NGOs such as China Youth Development Foundation are in fact limited of their usefulness towards values and interests of the youths, the environment, and any other issues that are sometimes very different from those of the state.
Poor Funding
Funding is another major management issue facing the management of most Non-governmental organizations like China Youth Development Foundation in China. According to (Lu, 2005) findings, the aim of many Non-governmental organizations is not only the attainment of goals and objective but also the attainment of funding which they require to achieve these goals time to time. Therefore, after the achievement of most of their goals, Non-governmental organizations usually keep contact with their donors to ensure that continuous progress is occurring. Non-governmental organizations in China are subsidized by the state, while other depends on donations from the general public. However, most of these Non-governmental organizations such receive extremely limited funding from the state for their projects which range from health care, education, and environmental protection (Ma, 2002). Therefore, bearing this in mind, it is clear that the issue of funding has forced these Non-governmental organizations such as China Youth Development Foundation in China to try and raise the needed funds by themselves in order to help the youths in China build capacities of their own and to also improve on the environment for there to be a chance of development for the young people. In so doing, this organizations are said to be in route of developing a better tomorrow for the future leaders which in one way or another will adopt the same path while also aiming the achievement and attainment of the global sustainable development goals.
Overreliance on Donor Funds
Despite the noble course by these organizations, overreliance of financial support from corporations, the states, private foundations, international organizations, and general public leads to the issue of management being too dependents to these uncertain sources of funding, to an extent where, in times of limited funding these organizations are not able to compete any projects geared towards the achievement of their objectives.
In recent years a majority of organizations including Non-governmental organizations such as China Youth Development Foundation have captured the attention of the public due to their involvement in cases involving fraud and mishandling of organizational finances which resulted to major corporate scandals. For instance, the case involving Project Hope of China Youth Development Foundation diverted RMB equating to approximately 100 million of its donation funds to operate a private business is one of the major corporate scandals that really affected China Youth Development Foundation (Hasmath & Hsu, 2008). The adverse effects of corporate fraud are normally more severe for an organization due to the various impacts associated with it. For instance, some of these impacts include, damaged performance, loss of reputation and image, loss of access to vital resources, lowered credit ratings, and loss funding due to loss of donors (Hasmath & Hsu, 2015). Based on this, it is therefore clear that this become a major management issue of China Youth Development Foundation due to the fact that this social evil happened of their watch.
State-Wide Issues with NGOs in China
Global challenges in communities and families in within the societies in China have resulted to Non-governmental organizations in China becoming the primary pillar of the public wellbeing Hasmath & Hsu (2015). However, this is not achievable when the management of most these Non-governmental organizations experience the issue of understaffing. The issue of being understaffed reduces the different services that the Non-governmental organizations employees have to offer in their day to day service to the society. For instance, the case of China Youth Development Foundation experiencing issue the issue of understaffing could hinder the achievement of different projects that involve helping the youths attain education and engagement in environmental protection. In most cases, the problem of understaffing occurs in due to low demand of jobs that are provided in these Non-governmental organizations. The tasks provided are mainly heterogeneous which include project management, economic development, humanitarian, and environmental protection in regions of conflict. These tasks are normally considered hard and worse, put NGO worker’s lives at great risks. As a result, this causes few turn outs for the NGOs positions and thus creating an issue for the management who require more employees if they are to achieve the objectives of the organization.
Furthermore, lack of enough staff members in Non-governmental organization operations could result to decreased performance causing challenges in the attainment of both short and long term goals. A given project could take longer that it should to be completed and as result leading to delay in the achievement of goals. According to Hasmath & Hsu (2015) in worse cases the problem of understaffing usually results to projects left pending due to in availability of individuals to complete them. In many cases, the issue of understaffing usually results to poor team work among employees. This is due to fact that understaffing causes employees to be assigned to different post in an effort to accomplish most jobs. Bearing this in mind, it is therefore clear that understaffing results to lack of support within the organization. For instance, in the case of China Youth Development Foundation, in order to achieve its objectives of providing aid to the youths so as to help them reach their full potential, the need for full staffing is very essential as understaffing will deter the achievement of these objectives (Ma, 2002). With Non-governmental organizations known to be associated with big projects that require commitment and adequate employees, this therefore becomes a major issue facing management of these organizations.
Conclusion
In summary, management is one of the most important elements in any organization including Non-governmental organization. Effective management enables organization, coordination, directing, and administration of various tasks and activities within the organization with an aim of helping in the achievement of organizational missions and goals. However, despite the various advantages associated with effective management, there are also various issues such as lack of funding, corporate scandals, inadequate staffing, bad financial management, and lack of strategic planning that affect the management of Non-governmental organizations in different parts of the world and especially in China.
References
Hasmath, R., & Hsu, J. (2008). NGOs in China: Issues of good governance and
accountability. Asia Pacific Journal of Public Administration, 30(1), 29-39.
Hasmath, R., & Hsu, J. Y. (Eds.). (2015). NGO governance and management in China.
Routledge.
Lu, Y. (2005). The functioning and dysfunctioning of NGOs in transitional China: Change and
continuity in state-society relations (Doctoral dissertation, London School of Economics and Political Science (United Kingdom).
Ma, Q. (2002). The governance of NGOs in China since 1978: how much autonomy?. Nonprofit
and Voluntary Sector Quarterly, 31(3), 305-328.
The Major Forms of Government in The World
The Major Forms of Government in The World
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The Major Forms of Government in The World
Over time, many countries have adapted to different types of government. Some of these include one party, two-party, multiparty, monarchy, and even the tribal government. Each of these forms of government is unique in its way, although they may be similar somehow.
One party form of government is whereby one major political party rules a state legally. Only this party is allowed to form the government. Other political parties formed are outlawed and will not be functional. Since there is only one political party, this means that there is no opposition (Taylor & Herman,1971). The one-party system leads to the stable political growth of the country. There is no need for discussions, and therefore, decisions are made fast. However, this system is disadvantageous to the minority in the country since their voices and opinions will never be considered. No time or money is wasted on conducting political elections and campaigns.
A two-party system is a form of government whereby two major political parties are dominant. As a result, nearly all the elected seats will belong to these two political parties. In this system, voters’ interests are well represented. This system is preferred to the multiparty system because it is simpler to govern, bringing political stability. There is less confusion in this system. However, in such a scenario, the two parties usually disagree on specific issues, leading to chaos. The citizens also lack the variety to choose from when it comes to an election since only two parties stand the chance of winning.
The multiparty government system is that whereby the citizens can form as many political parties as they would like to. The various political parties represent the interests of each section in the society. Essentially, this means that no one will be left out when it comes to making significant decisions (Dodd, 2015). In this type of system, the government is usually very responsive to the needs of its citizens. All the political parties are motivated to work together to form a strong working government. When it comes to elections, the citizens have a variety to choose from.
The Monarchy system is whereby the monarch is the head of state for life or until abdication. In a constitutional monarchy, the monarch and the government share power. The monarch holds all the power in an absolute monarchy. Only one person has the responsibility to make decisions, and therefore they will be made fast, and the arguments will be few. The seat is not subject to national elections but is somewhat hereditary (Hewison, 1997). Thus, the government saves a lot of money that would have been used for campaigns and elections. Cases of corruption in countries with the monarchy system are few since the monarchs know that they will be ruling for a lifetime. The future monarchs are identified before they can take their positions and can be trained accordingly.
The tribal government is a form of government whereby each native tribe has its government. The tribal governments work hand in hand with the federal government. They have to impose taxes and pass laws in their jurisdiction. The government is usually very organized, and the people are well served. The tribal government provides essential services to the people, such as education and management of land.
To conclude, there are very many forms of government used all over the world. Each has its advantages and disadvantages. The citizens also get to benefit on different levels.
References
Dodd, L. (2015). Coalitions in parliamentary government. Princeton University Press.
Hewison, K. (1997). The monarchy and democratisation. Political Change in Thailand: Democracy and Participation, London: Routledge, 58-74.
Taylor, M., & Herman, V. M. (1971). Party systems and government stability. The American Political Science Review, 65(1), 28-37.