1. Economic Systems in Government Lecture #11

2. I. Reviewing the Philosophers A.The philosophers of the Industrial Revolution had ideas about how society should be governed B.There were 3 major economic systems that they came up with 1.Capitalism 2.Socialism 3.Communism

3. II. What is an economic system? A.Economy can be defined as the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services. 1.More simply put, how does a government keep track of money made by business in their nation and how do they help their citizens with it

4. III. Capitalism A.An economic system in which the factors production (land, labor, capital) are privately owned. B.There is little to no government involvement (laissez faire) C.Money is invested in business ventures to make a profit for the owner D.Is all about increasing capital, or money! E.Supported by Adam Smith, Thomas Malthus, David Ricardo and The Wealth of Nations, 1776 F.Example Nations: United States

5. III. Capitalism G.Problems with Capitalism 1.It may allow for some poor workers to work up the corporate ladder and make money, but ultimately a lot more workers are left poor and working in terrible conditions 2.Unions form to fight for the workers and their rights, but may not really fight for the workers fairly or to the best of their ability. This could lead to strikes, where workers lose money because they refuse to work

6. IV. Socialism A.An economic system in which the factors of production (land, labor, capital) are owned and operated by the public government and operate for the welfare of all B.Social = Society, government taking care of its society C.Ownership of factories, mines, railroads by the government would end poverty and promote equality D.Government provides services for minimal or no cost to its citizens 1.Education, health care, job security, E.Example Nations: England (United Kingdom), Canada, Australia, Israel, France F.Supported by Henri de Saint Simon in France after the French Revolution and Industrial Revolution

7. IV. Socialism G.Problems with Socialism 1.The government may not have the interests of their people at heart when making decisions for everyone 2.There may be more people in a society than a government can take care of- which leads to poorer quality medical treatment, education, jobs available

8. V. Communism A.Economic system in which the factors of production (land, labor, capital) are owned and managed by the people B.Private property ceases to exist C.Communism is supposed to end the struggle between the bourgeoisie and the proletariat to make everyone equal D.All goods and services are shared equally by the people. There are no longer bourgeoisie and proletariat E.Example Nations: Russia, Cuba, North Korea, China F.Supported by Karl Marx and his Communist Manifesto, 1848

9. V. Communism G.Problems with Communism 1.People like owning things- especially land and luxury items that make them different or special 2.When people own and operate the resources it can allow for a.Lazy people to take advantage of the work of others b.Controlling people to take advantage of and bully those who don’t desire power 3.Allows for dictatorships (one person who claimed to have everyone else’s interest at heart)

10. Checking For Understanding Beneath your lecture notes, please write down and answer the following questions. 1)What are the 3 major economic systems that we discussed today in lecture? 2)What are the 3 factors of production? Which economic systems use them? 3)In a Capitalist society, what is the goal of both the business owners and the workers? 4)In a Socialist nation, who owns and operates the factors of production? 5)Even though in a Communist nation the people own and operate the factors of production, what is a problem seen in Communism?