1. THE 5 “ISMs” Economic Systems

2. CAPITALISM A country’s farms, factories, and businesses are owned and controlled by individuals and private businesses. A country’s farms, factories, and businesses are owned and controlled by individuals and private businesses. Adam Smith – Father of Capitalism Wealth of Nations - 1776 Laissez -faire

3. Capitalism - Upside Based on competition, profits, and self- interest Based on competition, profits, and self- interest An individual can start a business and make a profit An individual can start a business and make a profit “Private Enterprise” “Private Enterprise” “Free Enterprise” “Free Enterprise” “Free Market” “Free Market”

4. Capitalism - Downside Unbridled (unchecked) capitalism produced major problems Unbridled (unchecked) capitalism produced major problems Unemployment, poverty, class conflict, and economic depressions Unemployment, poverty, class conflict, and economic depressions Eventually solved by “Social Democracy” Eventually solved by “Social Democracy”

5. COMMUNISM The country’s farms, factories, and businesses are totally owned and controlled by the government. The country’s farms, factories, and businesses are totally owned and controlled by the government. Karl Marx and Frederick Engels Communist Manifesto – 1848 All history was a history of class conflict!

6. Communism Feudalism gave rise to the bourgeoisie (business class) which overthrew the feudal lords. Feudalism gave rise to the bourgeoisie (business class) which overthrew the feudal lords. Captialism gave rise to the proletariat (working class), which would overthrow the capitalists. Captialism gave rise to the proletariat (working class), which would overthrow the capitalists. Capitalism was doomed Capitalism was doomed As capitalists grew richer, they spread misery among the poor As capitalists grew richer, they spread misery among the poor

7. Communism One day, workers would become aware of their political and economic power. One day, workers would become aware of their political and economic power. They would overthrow the system and become the ruling class. They would overthrow the system and become the ruling class. Private property is the root of all evil. Private property is the root of all evil. Workers would abolish all classes and there would be a classless society. Workers would abolish all classes and there would be a classless society.

8. Marx love the French Revolution Envisioned a bloody revolution (1789) Envisioned a bloody revolution (1789) Begins with a class struggle (the Bastille) Begins with a class struggle (the Bastille) Run by a handful of men (Robespierre and CoPS) Run by a handful of men (Robespierre and CoPS) Annihilate the capitalist class (guillotine) Annihilate the capitalist class (guillotine) End all private property (Rousseau) End all private property (Rousseau)

9. UTOPIANISM Greek – “no place” Greek – “no place” An imaginary place with an ideal government and economic system. An imaginary place with an ideal government and economic system. Robert Owen New Lanark – textile mill village Improved living conditions Experiment Failed Believes in impossibly idealistic schemes of social perfection

10. SOCIALISM There is public ownership of basic industries…community or the state = ownership There is public ownership of basic industries…community or the state = ownership Factors of production operate for the welfare of all. Factors of production operate for the welfare of all. Capitalism creates unequal distribution of wealth Capitalism creates unequal distribution of wealth Better to distribute goods according to each person’s need Better to distribute goods according to each person’s need