Alternative Economic Systems

Communism: Theory Karl Marx believed history was a struggle between capitalists (owned means of production) and others (who worked for capitalists).

Communism: Theory Karl Marx believed history was a struggle between capitalists (owned means of production) and others (who worked for capitalists). During the Industrial Revolution, the means of production became too expensive for most people to own

Communism: Theory During the Industrial Revolution, the means of production became too expensive for most people to own This allowed capitalists to make large profits

Communism: Theory During the Industrial Revolution, the means of production became too expensive for most people to own This allowed capitalists to make large profits Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions

Communism: Theory Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions At some point, workers would tire of conditions and revolt

Communism: Theory Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions At some point, workers would tire of conditions and revolt After the revolution, they would share the fruits of their labor equally

Communism: Reality Marx never laid out plans for how a communist economic system would function

Communism: Reality Marx never laid out plans for how a communist economic system would function Thus, there have been numerous failed attempts at communism (Soviet Union)

Communism: Reality Soviet Communism was driven by fear of the government

Communism: Reality Soviet Communism was driven by fear of the government The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products

Communism: Reality Soviet Communism was driven by fear of the government The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products The standard of living was very low, and people lacked incentive to work hard

Communism: Reality The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products The standard of living was very low, and people lacked incentive to work hard This led to its failure when the basic commodities needed for survival were not being adequately produced

Socialism: Reality Socialism traces its roots to Marx, but without the worker’s revolution

Socialism: Reality Socialism traces its roots to Marx, but without the worker’s revolution Socialism can exist on very different levels

Socialism: Reality Socialism traces its roots to Marx, but without the worker’s revolution Socialism can exist on very different levels –In Western Europe, the government may own large industries and utilities while allowing other markets to be capitalistic

Socialism: Reality Socialism traces its roots to Marx, but without the worker’s revolution Socialism can exist on very different levels –In Western Europe, the government may own large industries and utilities while allowing other markets to be capitalistic The current trends in in Western Europe are away from Socialism

Socialism: Reality Socialism can exist on very different levels –In Western Europe, the government may own large industries and utilities while allowing other markets to be capitalistic The current trends in in Western Europe are away from Socialism –Many nations have sold off government owned industry to private business b/c they are more efficient

Capitalism: Reality Private individuals make the decisions of the economy with limited gov’t input

Capitalism: Reality Private individuals make the decisions of the economy with limited gov’t input The government’s role is to set and enforce basic rules for how businesses are organized

Capitalism: Reality Private individuals make the decisions of the economy with limited gov’t input The government’s role is to set and enforce basic rules for how businesses are organized We are far from pure capitalism in the US

Capitalism: Reality Private individuals make the decisions of the economy with limited gov’t input The government’s role is to set and enforce basic rules for how businesses are organized We are far from pure capitalism in the US –Over 1/3 of the money earned in our country goes to the gov’t to support education, welfare, health services and various other gov’t programs

Capitalism: Reality We are far from pure capitalism in the US –Over 1/3 of the money earned in our country goes to the gov’t to support education, welfare, health services and various other gov’t programs However, we are far from other comparative countries like France and Sweeden who are well over 50%