1. Different Economic Systems

2. Traditional Economies
Based on custom

3. Little innovation or change Subsistence standard of living

4. Command (Socialism, Communism)
Public (govt) ownership of land, capital
Central economic planning
Distribution of resources
Output decisions
Wage and price controls

8. Market (capitalism, free enterprise)
Economic incentives – profit motive
Voluntary exchange
Economic freedom
Private property rights (including intellectual property)—protected by legal contracts
Self-interest – see Adam Smith profile, p. 33
Wealth of Nations, 1776
Father of modern economics
Self-interest
Laissez-faire

9. Competition, including the right to fail
The “invisible hand”
Creative destruction (Joseph Schumpeter) – new products and production methods destroy old products, firms
Limited government role—protection, courts, public goods and services

10. Mixed economies Market system dominates: Hong Kong US Australia
Switzerland

11. Market systems with extensive social welfare programs:
Sweden
Norway
Germany
Netherlands

12. Extensive government intervention in the market:
North Korea
Cuba