1. And How They Affect Governments
Economic Theories
And How They Affect Governments
Socialism
Capitalism
Communism

2. Economic Systems Feudalism Imperialism Colonialism Mercantilism
Historic Systems

3. Modern Economic Systems

4. Capitalism

5. Capitalism Characteristics Private ownership Free enterprise
Competition among businesses
Freedom of choice
Possibility of profits
Characteristics

6. Capitalism
The Wealth Of
Nations
Adam Smith

7. Capitalism The Invisible Hand
Adam Smith said an invisible hand guides everyone in their personal decision making about their businesses. If we just leave them alone they will usually do what is best for themselves. Often that is also best for the nation.

8. Capitalism
Free Market – Buyers and sellers are free to make economic decisions.
Laissez-faire – “To let alone”
No nation has “pure” capitalism
Mixed Market Economy – Free market is supported by government decisions

9. Capitalism
So . . .
How does Capitalism affect the government of a nation?

10. Socialism

11. Socialism Why it developed
Industrial revolution in 1700’s and 1800’s left many people in Europe in terrible poverty.
Working conditions were horrible and dangerous.
Why it developed

12. Terrible living conditions

13. Socialism
More equal distribution of wealth and opportunity.
Government control of all major decisions about production.
Government ownership of most land, factories and major means of production.
The Concept

14. Socialism Democratic Socialism Most countries of western Europe
Great Britain
Denmark
Norway
Sweden
Germany
Democratic Socialism

15. Socialism How does Socialism affect the government of a nation?

16. Communism

17. Communism
The
Communist
Manifesto
Karl Marx

18. Communism Bourgeoisie Proletariat
Capitalists who own the means of production.
Workers
Bourgeoisie
Proletariat

19. Communism The goal is government ownership of all means of production.
Concept:
Struggle between workers and owners.
Workers want more pay.
Workers do not get full compensation.
Owners want more profit.
This struggle will result in revolution.
The goal is government ownership of all means of production.

21. Communism Command Economy
All decisions are made at the upper levels of government and handed down to managers.
The government owns the land, natural resources, industry, banks, transportation, mass communication, newspapers, etc.
Command Economy

22. Communism How would Communism affect the government of a nation?
So . . .
How would Communism affect the government of a nation?

23. Your Assignment Tonight . . .
Ask your parents/guardians/etc. how they view the differences between Capitalism, Socialism, and Communism.
Do they know the difference?
Do they have an opinion about which is best?
Have they ever lived under another system?