Economic Systems Peoples and World Cultures

Capitalism Capitalism is based on private ownership of the means of production and on individual economic freedom. Most of the means of production, such as factories and businesses, are owned by private individuals and not by the government. Free Competition is the basic rule of capitalism. People should compete freely without interference from government or any other outside force. In theory, prices are kept low because the consumer will seek out the best product for the cheapest price. Supply and Demand: prices are determined by how many products are on the market, and how many people want that product. When supply is increased the prices tend to decrease.

Communism Karl Marx and Friedrich Engels turned the world upside down in 1848 with the Communist Manifesto, which emphasized how wealth should be evenly distributed. According to Marx, capitalism exploited workers and favored the wealthy elite. Communism emphasizes shared property and the people should ultimately control the economy. The government should exercise control in the name of the people during this transition.

Socialism Similar to communism. It calls for the major means of production to be in the hands of the people, either directly or through the government. Wealth and income should be shared more equally among people. Socialists differ from communists because they don’t believe private property should be completely eliminated. The government should in turn redistribute wealth to make society more fair and just.

Communism and Democracy Click the link below for an economic and political comparison chart mocracy