Economic Systems of Industrialization

Capitalism GOAL: FREEDOM Economic system run by a free market All production (businesses) is privately owned Government does not regulate businesses People compete to get money, property People get freedom, but less equality

Capitalism Major principle of Capitalism: “Laissez faire” (leave alone) Economic policy of letting private businesses set working conditions and policies Government does not interfere

Capitalism Adam Smith - called “the father of Capitalism” Wrote “The Wealth of Nations” Law of self-interest – people work for their own good Law of competition – competition forces people to make a better product Law of supply and demand – in a free market, enough goods would be created to meet demand

Socialism GOAL: FAIRNESS Economic system in which goods are regulated by the government Higher taxes than Capitalism More public services for the people Concerned with fairness, ending poverty

Communism GOAL: EQUALITY Economic system run by the people, where everything is shared equally Property shared by the community Businesses owned by the community People all get equal pay

Communism Karl Marx Industrial Revolution made rich richer, poor poorer Classes would eventually go to war People would rise up and create a system in which people shared all goods and services

Differences between the economic systems Capitalism? Socialism? Communism?