Economic systems

Background Industrial Revolution opened a wide gap between the rich and poor. Different ideas emerged on how to handle the wealth generated from the Industrial Revolution

Capitalism, Communism, and Socialism

What is capitalism? Capital=MONEY Businesses are privately owned Money is invested in business to make a profit Law of self-interest: people work for their own good Competition is encouraged Government should not interfere in economy 4

Adam Smith Adam Smith is “the” capitalist Wealth of Nations: capitalism good for society Laissez faire: let the people do as they please 6

What’s good about capitalism? Freedom, choice. You can work wherever, buy whatever, and pretty much do whatever. If you’re successful, you can be very successful. Think Bill Gates, Papa John, Mark Zuckerberg Answer the question in your notes Who would support capitalism and why? 7

What’s bad about capitalism? No “safety net”: government can’t interfere to help During Industrial Revolution, factory owners took advantage of workers If you’re unsuccessful, you can be very unsuccessful Big gap between rich and poor.

What is Socialism? Midpoint between capitalism and communism State owns property and helps to distribute goods more evenly

What is communism? IN THEORY A form of complete socialism in which everything would be owned by the people Private property would cease to exist All goods and services would be shared equally Government would cease to exist as a classless society develops 10

What is communism? IN PRACTICE Joseph Stalin Country is controlled by dictator Government takes control of all private property Government picks your job Government distributes only what you need housing, food, education, health care Distribution of goods is equal (depending on size of family) EXCEPT top ranking members of the communist party; they get whatever they want All freedoms are taken away

Karl Marx Karl Marx is “the” communist The Communist Manifesto: 1848, class struggle, problems of capitalism Das Kapital: 1867, critique of capitalism Both written with Frederich Engels 13

What’s good about communism? Basic needs met Everyone would have a job, house, health care, etc. Answer the question in your notes Who would support this idea? 14

What’s bad about communism? Lack of choice No reward for being a better worker or punishment for being a slacker Everyone expected to be the same (lack of focus on individual growth). https://www.youtube.com/ watch?v=9uGv1L3opb4 15

How’s this related to the Industrial Revolution? Adam Smith’s capitalism dominated the IR- Led to bad working conditions. Karl Marx wrote about communism as solution to capitalism’s problems. Marx said the workers would get fed up and overthrow their governments and start communism. Eventually, workers won more rights to due unions and reform laws created by the government 16

Answer the following question in your notes Which economic system do we have in the United States? Support your answer with examples. Capitalism Socialism Communism

Read the Connect to Today on pg 738 and answer the following questions 1.How many communist countries existed during the peak of communism (1980s) 2. How many communist countries still exist today, and what are they?

Other possible videos https://www.youtube.com/watch?v=5xgwYRX19VU https://www.youtube.com/watch?v=B43YEW2FvDs