1. Capitalism vs Socialism
Unit Objectives
Learning about the new ideas that resulted from dissatisfaction with industrialization or advances caused by it
Understanding the development and impact of socialism and how it compares to capitalism

2. What is capitalism?

3. Capitalism
AN ECONOMIC SYSTEM IN WHICH THE MAIN MEANS OF PRODUCTION (FACTORIES, RESOURCES, ETC.) ARE OWNED BY PRIVATE PEOPLE OR BUSINESSES
What drives capitalism?

4. Capitalism
PROFIT DRIVES CAPITALISM—MONEY IS INVESTED BY PRIVATE OWNERS WITH THE GOAL OF MAKING PROFIT

5. Problems with Capitalism
Some have argued that government should leave business alone (“Laissez Faire” or “Free Market” capitalism) because anything the government does to regulate businesses (like minimum wage laws or health and safety laws) costs businesses money and is bad for the economy
What problems can develop if capitalism is left unregulated?

6. Problems with Capitalism
Can lead to:
CORRUPTION
LARGE COMPANIES THAT MONOPOLIZE A BUSINESS (BAD FOR THE CONSUMER AND SMALL BUSINESSES THAT CANNOT COMPETE)
FACTORIES THAT TAKE ADVANTAGE OF WORKERS

7. How did that result in the rise of Socialism?
MANY FELT NO MEANINGFUL CHANGE WAS COMING TO CAPITALISM BECAUSE GOVERNMENTS AND THE COURTS SUPPORTED THE BUSINESS OWNERS, THEREFORE A SOCIALIST REVOLUTION WOULD BE NECESSARY

8. What is Socialism?
A GOVERNMENTAL AND ECONOMIC SYSTEM IN WHICH THE MAIN MEANS OF PRODUCTION ARE OWNED BY THE GOVERNMENT AND OPERATED FOR THE GOOD OF ALL
THERE IS LITTLE OR NO PRIVATE OWNERSHIP OF BUSINESSES

9. Comparing Capitalism and Socialism: Equity
NOT CONCERNED ABOUT EQUITY
INEQUITY IS ESSENTIAL TO FUEL COMPETITION, INNOVATION, AND ECONOMIC DEVELOPMENT
Strives for equity
Wants one equal social class in an effort to eliminate poverty
Will redistribute resources from rich to poor
Wants equal opportunities and outcomes

10. Business Ownership
Capitalism
Socialism
Private people own the means of production; Government guides the economy
Progress results when people follow their own self-interest
THE GOVERNMENT OWNS THE MEANS OF PRODUCTION AND DIRECTS THE ECONOMY
PROGRESS RESULTS WHEN EVERYONE COOPERATES FOR THE GOOD OF ALL

11. Efficiency
Capitalism
Socialism
PROFIT MOTIVATES PRIVATE BUSINESSES TO BE EFFICIENT, CUT COSTS, AND INVENT NEW PRODUCTS
Capitalists argue government ownership of businesses leads to inefficiency because the workers and management lack motivation to work hard, cut costs, or be innovative

12. Unemployment
Capitalism
Socialism
Socialists argue that unemployment can rise because the government is not in charge and does not directly provide jobs, so in times of recession, unemployment rises
EMPLOYMENT IS DIRECTED BY THE GOVERNMENT AND CAN BE CONTROLLED EVEN IN TIMES OF RECESSION

13. Price Controls PRICES DETERMINED BY MARKET FORCES
Capitalism
Socialism
PRICES DETERMINED BY MARKET FORCES
BUSINESSES WITH A MONOPOLY CAN CHARGE WHATEVER THEY WANT
No monopolies, but when prices are set by the government there can be shortages and surpluses of products because the market is not establishing the need for them, the government is (supply and demand)

14. Where do Consumers fit in?
Capitalism
Socialism
Consumers compete to buy the best products at the lowest prices forcing business owners to compete with each other for their business
SOCIALISTS BELIEVE CAPITALISTS TAKE ADVANTAGE OF WORKERS AND CAPITALISM CREATES UNEQUAL DISTRIBUTION OF WEALTH THAT LEADS TO POVERTY

15. The role of the government
Capitalism
Socialism
GOVERNMENT SHOULD REGULATE BUT NOT INTERFERE IN THE ECONOMY
Government should act to protect workers and equally distribute wealth

16. What is the biggest difference between Capitalism and Socialism?

17. THE AMOUNT OF GOVERNMENT INTERVENTION IN THE ECONOMY

18. What do you think? What sounds good about Capitalism?
What are its drawbacks?
What sounds good about Socialism?
Which would you choose and why?

19. Socialism vs Communism
What is the main difference between Socialism and Communism?

20. Socialism vs Communism
A MATTER OF DEGREE—COMMUNISM MORE EXTREME WITH LESS PRIVATE OWNERSHIP OF BUSINESSES AND PROPERTY, MORE GOVERNMENT CONTROL