1. Capitalism vs. Socialism
A Love Story

2. Quickwrite
The Industrial Revolution not only changed the way people lived, but also change how people viewed the relationship between business and government. Adam Smith, a professor at the University of Scotland, strongly believed that government had no business in business and if government allowed free trade, the economy would prosper. He defended the idea of a free economy, or free markers, and supported the economic policy known as laissez faire, or “let do,” and by extension, “let people do as they pleased.”
In your opinion, does the United States exercise the economic policy of laissez faire? Why or why not? Give three (3) specific examples.

3. Adam Smith’s Three Natural Laws
The law of self-interest- People work for their own good.
The law of competition- Competition forces people to make a better product.
The law of supply and demand- Enough goods would be produced at the lowest possible price to meet demand in a market economy.
How do these three laws reflect economic liberty? How would they guarantee economic progress?

4. Capitalism
Smith’s ideas were the foundation of laissez faire CAPITALISM.
An economic system in which the factors of production are privately owned and money is invested in business ventures to make a profit.

5. Socialism
Theorists believed that wealthy people or governments should intervene in business and must take action to improve people’s lives.
They sought to offset the ill effects of industrialization with a new economic system called SOCIALISM.
The factors of production are owned by the public and operate for the welfare of all.
CHART in BOOK

6. Table Talk
Imagine you are sitting down with a factory worker, shop owner, factory owner, and an unemployed artisan around a table.
You start discussing capitalism and socialism.
In groups of four, (you may add a fifth person and assume a different role) act a scene that answers the following question:
Based on your role, which economic idea would you prefer, capitalism or socialism? Explain why? Give two reasons and cite your reasoning.