1. Traditional Economic System Major Features Subsistence Farming - People produce most all of what they need to survive Hunting & Gathering Herding Barter system- trade goods and services for other goods and services Example Most cultures used this method for thousands of years River Valley Civilizations Pre- Industrial societies Underdeveloped Countries today (LDC’s)

2. Feudal Economic System Major Features Political, ECONOMIC, and social system. Manorialism – – –land = wealth and power – –Rigid Social Class system (Peasants= labor; Nobles=protection) LOYALTY and SERVICE Isolated and self-sufficient Little trade Example Europe – –Middle Ages- –500 AD to 1500 AD Feudal Japan – –1200 AD to 1860 AD –Ends with Meiji Era modernization and industrialization

3. Mercantilist Economic System Major Features 16 th & 18 th century Europe Crusades break down feudal system Nation’s wealth = gold & silver Colonies exist to serve the Mother Country Colonies send raw materials Mother Country manufactures goods and sells them to the colonies Monarch controls all trade Favorable balance of trade for the Mother Country Mother Country’s wealth….leads to capitalism!!! Example COMMERCIAL REVOLUTION (1500-1700’S) Spain Portugal France England Holland

4. Capitalist Economic System Major Features FREE MARKET ECONOMY Private ownership of business – –-Free Enterprise Supply and Demand; Consumers determine price, etc. Entrepreneur- starts business on their own Stockholders Competition Examples: Adam Smith (Wealth of Nations, 1776) –Laissez-Faire Capitalism –Gov’t “HANDS OFF” the economy –Britain 1750’s …beginning of the Industrial Rev. USA economy today

5. Communist Economic System (Radical Socialism; Scientific Socialism) Major Features: COMMAND ECONOMY All economic decisions made by gov’t planners Gov’t owns all property Gov’t controls all production and distribution of goods Examples: Karl Marx (Communist Manifesto, 1848) –Workers of the world unite… overthrow capitalists –Share resources… EQUALITY for all! –NEVER BEEN TRIED!!! USSR - Lenin 1917 China – Mao 1949 - 1978 Cuba- Castro 1959 Vietnam 1975 (after the war)…today North Korea 1948…today

6. (DEMOCRATIC) SOCIALISM Major Features: MIXED ECONOMY Some gov’t ownership + Somer private ownership Gov’t gets involved in economy to protect workers’ rights…Gov’t gets involved in economy to protect workers’ rights… National Health Care System, etc.National Health Care System, etc. Examples: CHINA (1978-present) –Deng Xiaoping –4 Modernizations –some capitalist reforms introduced European Nations –Scandinavian countries…Sweden, Norway, etc.

7. MODERN ECONOMIC SYSTEMS = POST INDUSTRIAL REVOLUTION ECONOMIC SYSTEMS