Economic Systems

Three main economic questions What should be produced? How should it be produced? Who consumes these goods and services?

Economic Goals Economic efficiency

Economic Goals Economic Equity

Economic Goals Economic Freedom

Economic Goals Security and Predictability

Economic Goals Economic Growth and Innovation Henry Ford Bill Gates

Market Economy USA Singapore

Private Ownership

Consumer Sovereignty

International Trade

Laissez Faire In economics, laissez-faire means allowing industry to be free of government restriction, especially restrictions in the form of tariffs and government monopolies. The phrase is French and literally means "let do", though it broadly implies "let it be" or "leave it alone".

Freedom? http://www.theonion.com/content/video/gap_unveils_new_for_kids_by_kids http://www.youtube.com/watch?v=p_YxHQra194

Private Property/Property Rights

Command Economies E.g. The Soviet Union * Communism is a government of a totally classless society based on common ownership (no private property – no free market) and control of the means of production and property in general. "Pure communism" according to Karl Marx means classless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically. Every member of society is supposed to participate in the decision-making process politically and economically. Communism attempts to offer an alternative to the problems with the capitalist market economy and the legacy of imperialism and nationalism.

Via Marx Karl Marx (1818 – 1883) was a German philosopher, political theorist and revolutionary credited as the founder of communism, writing The Communist Manifesto in 1848. Marx thought that history was the story of class struggles. Marx argued that capitalism, like previous socioeconomic systems, was flawed and would eventually end after revolution. Communism will in its turn replace capitalism and lead to a stateless, classless society.

Vladimir Lenin Vladimir Ilyich Lenin 1870 – 1924 was the Bolshevik Leader of the 1917 October Revolution, and the first Head of State of the Soviet Union. Lenin was a powerful and persuasive orator and writer, and to the development of Marxism-Leninism. However, Lenin's body of work is rejected by traditional Marxists, as it includes novel theories on imperialism and of the vanguard party, as well as an assertion that a developed industrial proletariat (virtually non-existent in the agrarian Russia of 1917) was not essential to the achievement of a communist state.

Allocation by Command

Current Command Economies

Mixed Democratic Socialism

Circular Flow Model

Traditional Economies

You have two cows… In a market economy you sell one, buy a bull, breed them until you have a herd, and then retire off the profit. In a command economy the government takes your cows, and then you are forced to milk the government owned cows for a low wage. In a mixed economy the government taxes your milk at exorbitant rates, and then the government buys the milk. In a corporatist economy the government tells you exactly what type of milk to produce and how much to produce. If you don’t comply they shoot you and give your cows to your Aryan neighbor. In a traditional economy you milk your cows, drink some of the milk, and then trade some milk for eggs with your neighbor. Your children will do the exact same thing when they grow up.

Corporatist Economics

Prime Minister of Russia Corporatist 2.0 Prime Minister of Russia