1. Karl Marx-History is a record of class struggle between the “haves” and “have nots”. The haves control the means of production (key industries). The have- nots work themselves to death for low wages Have get all the benefits. Communism-political and economic system where all property is collectively owned. Labor is organized for the common advantage of the community and everyone consumes according to needs Advantages –Equality of all –Government provide free services –No uncertainty about careers/job security –Command economy allows rapid shift in direction of economy 1. Religion is the opiate of the masses. 2. War is inevitable 3. From each according to his ability to each according to his needs

2. Adam Smith-Father of capitalism. Wrote “the Wealth of Nations”. Idea that competition acts as an “invisible hand” that guides resource to their most productive uses. Capitalism defined- Means of production are privately owned. Supply and demand determine prices, and businesses are free to direct resource into activities that promise the greatest profits. Laissez Faire-If the economy is free of government regulations, the economy will prosper.

3. Adam Smith’s 3 laws –The law of self interest=people work for their own good, not the good of others –The law of competition=competition forces people to make a better product –The law of supply and demand=too many producers, the bad ones will be driven out of business

4. Communism Socialism Capitalism Resources owned All productive resources are government owned and operated Basic productive resources are government owned and operated. Rest are private Productive resources are privately owned and operated Resources Allocated Centralized planning directs all resources Govt. plans ways to allocate resources in key industries Capital for production is obtained through the lure of profits in the market Role of Government Govt. makes all decisionsGovt. directs the completion of its’ economic plans in key industries Govt. may promote competition and provide public goods