Capitalism, Communism, Socialism

Essential Question: What are the differences between capitalism, communism, and socialism?

Traditional Economy Agriculture 3000BCE-1500CE Subsistence: Growing Just Enough to Feed Your Family Commercial: Sell Surplus in Local Market

Mercantilism Columbian Exchange 1500-1800 Nation builds its supply of gold & silver by exporting more than it imports Joint Stock Companies to finance colonial settlements

Capitalism: Market Economy 1800-Present Laissez-faire: government should keep their hands-off business Adam Smith Free enterprise system

Capitalism (Cont.) Law of Supply & Demand Self-Interest of producers & consumers Competition Agricultural & Industrial Revolution

Hardships Under Industrial Revolution Low Pay Unsafe Working Conditions Extreme Poverty Child Labor No Worker Rights

John Stuart Mill English philosopher Social reformer Government should prevent excess business greed when it harmed the worker

Communist Manifesto Karl Marx Friedrich Engels 1917-1989 History is struggle between “haves” & “have-nots” Proletariat = working class

Communist Revolution Working class revolt against injustice of capitalism Create classless society All means of production & property owned by “the people”

How Marx Got it Wrong Labor unions fight for worker rights From each according to their ability, to each according to their need Workers have no incentive to work Tyranny of the Communist Party

Utopian Socialism Robert Owen Communities where all work & wealth was shared

Command Economy Communism Government decides what will be produced Rigid Planning Discourages innovation Poor quality & shortages

Mixed Economy How is the United States a mixed economy? Capitalism & Socialism mix Some government intervention How is the United States a mixed economy? Water, sewage, mail, schools provided by government Private companies compete for markets including phone services, airlines, etc.

Modern Socialist Government 1900-Present Government ownership of key industries: Communication Power Transportation Health More regulations & support

Sweden 55% tax rate Free education, health care, child care 5 years unemployment benefits 25% of businesses owned by government Housing for those in need. What kind of economy is this?

North Korea What kind of economy is this? Kim Jong-Il has restricted foreign exports 92% coal & iron is used in manufacturing of military hardware A shortage of grain in from 1994-1997 led to the deaths of 800,000 North Koreans

Japan What kind of economy is this? Dozens of Railway companies compete for commuters Japan’s consumer electronics companies include Sony, Casio, Toshiba, Epson, Sanyo, Nikon Consumer demand for tuna, crab, & whale meat has led to overfishing and criticism by world wildlife organizations What kind of economy is this?