1. Mercantilism to Capitalism
Economic Systems:
Mercantilism to Capitalism

2. Economic Systems
Economics is the study of the production, distribution, and consumption of goods and services
An economic system is an organized model for making decisions about the distribution of resources.

3. What values underlie capitalism?
Salve lucrum! Lucrum gaudium!
“Hail profit! Profit is joy!”

4. Capitalism
Capitalism is the foundation of modern economic globalization
Values:
- Competition
- economic freedom
- personal responsibility
- consumerism
- individualism

5. Capitalism
Capitalism refers to an economic system in which the means of production are privately owned and operated for profit, and are determined through the operation of a market economy.

6. Adam Smith ( )
The Wealth of Nations, provided one of the best-known intellectual rationales for free trade and capitalism.
Self-interest alone can lead to socially beneficial results.
Ie. The invisible hand.

7. Adam Smith – Father of Capitalism
Laissez Faire “hands-off”
Survival of the fittest
Wealth of Nations
Critic of mercantilism. Why?
Individualism and Competition should be embraced.

8. Key Ideas Behind Capitalism
Individual initiative and the desire for profit motivate people to work.
People compete for their own self interest.
Individuals have the right to own property and to accumulate wealth.
Production and ownership of the goods of a country should be in the hands of private individuals and companies.

9. Four Keys to Capitalism
Profit motive – should be the desire for people to work hard
Competition promotes self interest
Private ownership of property and development
Production and distribution of goods should lay in the hands of individual not government

10. Flaws in Capitalism Who pushed for laws supporting capitalism?
What are some alternative economic system to capitalism?
What countries or figures are linked to these systems?

11. Canada USA North Korea Planned Economy Mixed Economy Market Economy
Resources owned by the government
Government decides what to produce and how to use resources
Consumer has little influence on economic decision making
No private ownership of businesses or property
Mixed Economy
Some resources publically owned and some are privately owned
Both government and individuals make economic decisions
Government may own some businesses and property
Individuals can own businesses and property
Market Economy
Resources privately owned
Businesses privately owned
Property privately owned
Consumers decided what is to be produced
No government involvement

12. The Factors of Production
Factors of production are important to a country and an economy because all three combined show how rich or poor a country may be. The Industrial Revolution started in Great Britain because they had the availability of land, labour and capital in great numbers
The basic resources of an economy are:
Land
Labour
Capital

13. Land – is defined as the usual gifts of nature, such as farmland, mines, forests, rivers, lakes, natural resources and space to develop
Labour – the workers, especially manual workers, in a country, company, or industry considered as a group
Capital – material wealth in the form of money or property

14. Alternative Economic Systems
Communism: an economic system in which all people work for government-owned and run enterprises.
Communistic theory suggests that the government should act as a protector to its citizens to avoid exploitation (the use of a person or group for selfish purposes).

15. Karl Marx
Marx believed that capitalism would be displaced by radical socialism which in turn would develop into a communism - a classless society.
The Communist Manifesto

16. John Stuart Mill ( )
Although Mill believed in free markets, he also believed that government should enact laws to protect workers.

17. Communism in Practice Communist countries: Russia China Cuba
For the Chinese “Jumping into the sea” is an expression that means leaving a safe, government job for high-paying but risky one.
Many experts believe communism has failed, why do you think this is so?