1. Ideology II: World Economies An economy is a system by which a nation produces and distributes goods and services. An economy is a system by which a nation produces and distributes goods and services. Must answer “The Three Questions” Must answer “The Three Questions”  What shall we produce?  How shall we produce it?  Who will receive what we produce?

2. Capitalism The Three Questions are answered by consumers (a.k.a. the “market”) The Three Questions are answered by consumers (a.k.a. the “market”) Here’s the process: Here’s the process:  A product or service is wanted (demand)  An entrepreneur produces it for the market  The entrepreneur hopes to make a profit Capitalist: Person who invests in companies (stockholder) who also wants to make a profit. Capitalist: Person who invests in companies (stockholder) who also wants to make a profit.

3. Competition: The Regulator of Capitalism Competition is supposed to regulate price and quality of goods and services Competition is supposed to regulate price and quality of goods and services If an entrepreneur is selling something that is shoddy or too expensive then someone else will produce a better product at a cheaper price. If an entrepreneur is selling something that is shoddy or too expensive then someone else will produce a better product at a cheaper price. Market Share: The percentage of the market that a producer serves. Market Share: The percentage of the market that a producer serves.

4. Pure Capitalism Role of Government Role of Government  since The Three Questions are answered by the market the government is supposed to stay out of it  Military?, Police?, Fire?, Schools?, Roads? Only private ownership of property Only private ownership of property No public (government-owned) property No public (government-owned) property A.K.A.-Free Enterprise and Free Market A.K.A.-Free Enterprise and Free Market

5. Problems With Capitalism Little or no competition Little or no competition  Monopolies: One company controls an entire market (“cornering the market)  Consumers can accept their price and quality or go without No Entrepreneurs for a particular good or service if the market is very small No Entrepreneurs for a particular good or service if the market is very small  Certain drugs  Very expensive things  Outdated goods or services (typewriters)

6. Problems With Capitalism No government regulation (minimum wage, working conditions, etc…) No government regulation (minimum wage, working conditions, etc…) Environmental Issues (ex. pollution, logging, endangered species) Environmental Issues (ex. pollution, logging, endangered species) No “safety net” for the poor No “safety net” for the poor A small, very wealthy upper class and a very large, very poor lower class A small, very wealthy upper class and a very large, very poor lower class

7. Life in a Purely Capitalist Economy School? School?  Stufflebeam Academy: Very expensive but an outstanding education  Who gets to go to school? Police? Police? Military? Military? Obviously, a purely capitalist economy is not possible Obviously, a purely capitalist economy is not possible

8. Communism Government answers The Three Questions (planned economy) Government answers The Three Questions (planned economy) Everyone works for and is paid by the government Everyone works for and is paid by the government Only Public Property Only Public Property Equal Distribution of Wealth Equal Distribution of Wealth No Social Classes or Poverty? No Social Classes or Poverty? No Crime? No Crime?

9. Life in a Communist Nation Your Jeans Your Jeans Your Housing Your Housing Long lines due to scarcity of goods and services Long lines due to scarcity of goods and services Little choice of goods and services Little choice of goods and services Communist Countries: Vietnam, North Korea, China, Cuba Communist Countries: Vietnam, North Korea, China, Cuba

10. Problems With Communism Who gets what? Not everyone needs the same things. Who gets what? Not everyone needs the same things. You can’t get ahead. There is no incentive to work hard. Are you ready to do your best for the benefit of everyone else? You can’t get ahead. There is no incentive to work hard. Are you ready to do your best for the benefit of everyone else? Ex. Huge State Farms: Alcoholism, Absenteeism, Suicide Ex. Huge State Farms: Alcoholism, Absenteeism, Suicide Tends to be dictatorial (you’ll learn why later) Tends to be dictatorial (you’ll learn why later)

11. More on Communism Karl Marx Karl Marx  Das Kapital  The Communist Manifesto Miscellaneous Marx Miscellaneous Marx  Proletariat-Working Class  Communist Revolution Marx: Organized religion is a lie meant to keep the proletariat obedient. Marx: Organized religion is a lie meant to keep the proletariat obedient.

12. Socialism/Mixed Economy The government answers some of The Three Questions and the market answers some The government answers some of The Three Questions and the market answers some Heavy Regulation of Business Heavy Regulation of Business Income Redistribution Income Redistribution  Tax the Rich  Welfare Programs  High Minimum Wage

13. Socialism/Mixed Economy U.S. Socialism U.S. Socialism  Police, public ed., fire, etc…  Minimum wage, labor laws, social security, medicare/medicaid, regulations on business  Post Office, Amtrak, Utilities, Taxes, Area 51 “Socialized” Health Care? “Socialized” Health Care?

14. Fascism: An Ideology but not an Economy Extremely Right-Wing Ideology Extremely Right-Wing Ideology Racism Racism Militarism Militarism Extreme Nationalism Extreme Nationalism

15. Comparing Economic Ideology and Political Ideology

16. Are All People Equal? Capitalism: No. It’s a dog-eat-dog world Capitalism: No. It’s a dog-eat-dog world Communism: Yes. Everybody gets the same stuff Communism: Yes. Everybody gets the same stuff Socialism: Not quite equal but not too far away from each other in regard to material wealth Socialism: Not quite equal but not too far away from each other in regard to material wealth Facism: No. Kill the inferior races. (Genocide or ethnic cleansing) Facism: No. Kill the inferior races. (Genocide or ethnic cleansing)

17. Should Government Be Big? Capitalism: No. Government should only exist to protect the nation and its citizens Capitalism: No. Government should only exist to protect the nation and its citizens Communism: Yes. Government should own and control all property and equally distribute goods and services. Communism: Yes. Government should own and control all property and equally distribute goods and services. Socialism: Sort of. Heavy taxes, social programs, government regulation of the economy. Socialism: Sort of. Heavy taxes, social programs, government regulation of the economy.

18. Is Change Good? Capitalism: No. The market will decide what change, if any, takes place. Government will not institute social change. Capitalism: No. The market will decide what change, if any, takes place. Government will not institute social change. Communism: Yes. A revolution must overthrow the capitalists Communism: Yes. A revolution must overthrow the capitalists Socialism: Slow but steady change Socialism: Slow but steady change

19. The Two Cow Analogy If you have two cows in a capitalist country you sell the milk for a profit and buy more cows. If you have two cows in a capitalist country you sell the milk for a profit and buy more cows. If you have two cows in a communist country the government takes them and equally distributes the milk. If you have two cows in a communist country the government takes them and equally distributes the milk. If you have two cows in a socialist country the government takes one cow and gives it to someone who doesn’t have any cows. If you have two cows in a socialist country the government takes one cow and gives it to someone who doesn’t have any cows. If you have two cows in a fascist country the government doesn’t care but will kill or imprison you if you are a racial minority. If you have two cows in a fascist country the government doesn’t care but will kill or imprison you if you are a racial minority.