3 basic Economic Systems Capitalism Socialism Communism

Capitalism, Socialism, and Communism

Capitalism Private Ownership Profit Motive Free Enterprise Market Economy Competition

Too much Capitalism Results: Profit motive strengthens selfishness Loss of community values of cooperation Free Market allows rich to accumulate without responsibility to community (Multinational Corporations).

What is Capitalism? Accumulation of factors of production Productive labor (work for wages/become productive/produce more/ more accumulation of financial capital and capital) Profits are the motivational factor to production and wages.

3 Basic Freedoms Capitalism Depends On Private property- we are protected by our Constitution to own property. Private enterprise- we can go into business if we desire. Freedom of choice- jobs, school, businesses, production, consumption,

Five Features of FE Economy Private Property – bank balances, dogs, houses, gardens, tools, earth’s minerals, Property represents Wealth Economic Freedom –(political freedoms) buy any good, start a business, use technology, invest, quit your job Economic Incentive –better life, work harder, go to school, receive rewards for work- punishments also Competitive markets –supply/demand/individual preferences.Exercise choice. Markets and prices*** key Limited Role of Government –2 roles (rule-maker, and umpire).Allows individuals equal opportunities

The Birth of Socialism Socialism – system in which the people as a whole rather than private individuals own all property and operate all businesses. Socialists claimed that industrial capitalism had created a large gap between the rich and poor. Socialists cared less about individual ownership rights, and more about the interests of society.

What is SOCIALISM? State ownership of means for producing goods and services. A Socialist economy has 3 basic characteristics: 1.State owns major factors of production 2.Central planners determine many of the basic processes 3.There is an attempt to distribute income equally.

MARXISM Dictatorship would rule working class-become central planners- making all economic decisions. Through socialism people’s material and spiritual well-being would improve. A true classless society would come into existence. All property would be owned collectively All people would work to the best of their abilities to produce goods and services. People would consume only what they need People would worship the government.

What is communism? Economic system. Believes in collective (group) ownership and a planned economy. The theory is that everybody pools their resources and labor to evenly distribute everything. Karl Marx is “the” communist.

Communist Manifesto Abolition of property Heavy, progressive taxes Abolition of inheritance Confiscation of property of all emigrants and rebels Central banking State-controlled communication and transportation State-controlled education of the children

All economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party. Government plays bigger part to control the life of the citizens. The education, transpiration, factories, agriculture, communication, farming, labor and regional planning will be under the control of the government.