Presentation on theme: "Who’s the man with the economic plan?"— Presentation transcript:
1 Who’s the man with the economic plan? Adam Smith vs Karl MarxWho’s the man with the economic plan?
2 Adam Smithindividuals own the means of production (factories, machines, land) and reinvest profits as capital to expand businessCapital – wealth that is invested in order to create more wealth
3 Adam Smith- The Wealth of Nations Laissez-faire- (let do) non-interference of the government in business THE INVISIBLE HAND….HANDS OFF!
4 The Invisible Hand and… Minimum WagePrice ControlsEnvironmental ProtectionChild LaborDiscriminationThere would be no laws! Hands off!
5 CapitalismFree Market Economy – One in which consumer choice, the law of supply and demand and competition drives companies decisions regarding what products to produce and the prices of those products.
9 Socialism: (R. Owen)A theory or system of social organization that promotes:that the community as a whole should own and control of the means of production (factories / land)profits from production should be divided amongst the community as a whole
10 Socialism Continued: Believe capitalist take advantage of workers Community or state (gov’t) must act to protect workersUnequal distribution of wealth is unfair (caused by capitalism)Goods should be divided according to each person’s needs
11 Karl Marx The Communist Manifesto Radical Socialism or MarxismWorkers will seize control of the government and businesses
12 Then what… Redistribute profits equally (share the wealth equally) Own all property in common (no private property)
13 Socialism Communism“From each according to his ability, to each according to his need” (all must work, all share in profits)Economic equality (no more classes)No government or police would be needed in a community of equals where all is shared government would fade away Communism
14 “Communist” Countries Today “Communism” = Dictatorshipnever moved passed Marx’s Dictatorship of the Proletariat stageExamplesFormer USSR (Soviet Union)ChinaCubaNorth Korea
15 Socialist Countries Today Tend to be democraciesMajor Industries owned by the people (Railways, Telephones, TV stations etc.)Government taxes provide benefits to all citizens (healthcare, free higher education, pensions (retirement), Social securityExamples:France, Canada, England
16 Review…Radical Socialists (Communism) - All means of production and all profits are owned by the community together (Owen, Marx)Laissez-Faire Capitalism - Government should keep its hands off business and allow owners to act in their own self interest to seek profit (Smith, Malthus and Ricardo)
17 The United State GOALS ECONOMIC GOALS: (About the Numbers!!!) EfficiencyGrowth (2%)Price Stability (3%)Full Employment (5-6%)SOCIO-ECONOMIC GOALS: (About the People!!!)Environmental ProtectionSecurityEquityJustice TRADEOFFS???Freedom
18 So what do we do? U.S. Roles Providing goods and services. Examples? Safeguarding the market system. Competition!Dealing with externalities. Positive & NegativeHelping people in need. Examples?Helping specific groups. Examples?Stabilizing the economy. Draw a graph!