Comparative economic systems Essay Example | Topics and Well Written Essays - 2500 words

Comparative economic systems - Essay Example With industrialization came the need for a skilled and diverse workforce where traditional work arrangements were no longer feasible. During the Cold War period the world was divided into two main camps with the West (USA, W. Europe) embracing a free market economic system and the East (USSR, China) embracing a command economic system. In a free market economic system a nation’s economic activities are the result of individual decisions by buyers and sellers reflected in the price of products and services in the marketplace. People have the freedom to develop their talents and abilities and take up work or enter professions according to individual choice. They can also produce and supply goods and services as private businesses freely within legal and contractual obligations. The free market economic system of the West adumbrating free enterprise has been (and continues to be) referred to as capitalism. Up until the end of the Cold War, capitalism was a term of opprobrium to the East where communism ( a term of opprobrium to the West) was the term used for a command economy where all economic activity of the nation was controlled centrally by the government (mediated by the Communist Party). No private individuals were allowed to own and operate the means of production of goods and services. Public ownership, except in very small scale, local economic activity, was the norm. As everyone knows, USA exemplifies the paradigmatic capitalist state while Soviet Russia and China used to exemplify communism. Things have changed for Russia and China since the 1980s (although the latter still holds onto the communist label) and what these changes are, how they have been adopted and the progress achieved are the concern of this paper. A third kind of economic system called socialism is adopted by some countries with most of the major industries,

The Rise & Fall of a Billion Dollar Company Enron Term Paper

The Rise & Fall of a Billion Dollar Company Enron - Term Paper Example In the year 1999, the company introduced its broadband services named as Enron Online, which was a website for trading commodities that enabled the company to acquire the largest position in the globe. A major chunk of business was acquired from online trade business (Fox, 2003). Growth of Enron over the years was tremendous.  In the year 2000, the company's annual revenue touched the new heights of USD 100 billion. It  stood at the position of the seventh largest company of the world as reported by the Fortune 500 and the sixth largest business entity in energy sector of the world. The company's stock price at capital market witnessed its peak that was 90 USD (Fusaro & Miller, 2002). Every one knew that Enron was the billionaire business conglomerate of the United States of America housed in Houston, Texas. The prime business of this entity was energy, commodities and services before it was declared bankrupt in the year 2001. It employed more than 20,000 employees to deal with t heir electricity natural gas, communication, pulp and paper company businesses that generated revenue around 101 billion USD (Fusaro & Miller, 2002). The renowned business magazine â€Å"Fortune† placed Enron as America’s the most innovative company for consecutive six years. In the year 2001, the signs of financial frauds came to surface in the said company. This had created a storm in the corporate world. With this financial scam, many questions were raised about the efficiency of standard accounting practice. To overcome this situation in future, the legislators of USA created Sarbanes Oxley Act of 2002 (McLean & Elkind, 2003). The dissolution of Arthur Anderson accounting firm had jolted number of companies around the world. The Enron financial scam was considered as one of the biggest and perhaps most complex bankruptcy cases in the history of United States of America (Fox, 2003). Incumbents In the year 1990, Jeff Skilling, Chief Financial Officer, hired Andrew Fa stow, who was well versed with the tricks of the trade wanted to exploit the energy market. To achieve the desired goal, Fastow established numerous entities to handle common business practices. It also allowed Enron to place liability in order to maintain a robust growth of stock price to keep its critical investment grade credit ratings intact (Swartz & Watkins, 2003). Kenneth Lee "Ken" Lay was an American businessman whose role in terms of widely reported corruption that caused the downfall of Enron cannot be undermined. He and Enron became the part and parcel of corporate abuse and accounting fraud. Lay was enjoying the status of CEO and Chairman of Enron over a period of two decades till his resignation (Brewer & Hansen, 2002). In the year 2004, Lay was indicted by a constituted grand jury on 11 counts concerning securities’ frauds. The trial of Lay and Skilling began in Houston wherein Lay was found guilty on account of committing and abetting financial frauds. The comp etent court of law awarded him punishment on 10 counts leaving the 11th count relating to securities fraud, making false and misleading statements. Each count as per American Law attracted maximum 5 to 10 years rigorous imprisonment (Hodak, 2007). In the year 1999, Jeff Skilling raised the cash by selling off his assets to overcome the paucity of funds. The assets of Enron Oil and Gas Company were put on sale for gaining information about the market value. The company ran its business smoothly