1. ECONOMIC SYSTEMS

2. TRADITIONAL
Families, clans, or tribes make economic decisions based on customs and beliefs
Ex.) Kavango people of Namibia in southern Africa
Ex.) Amish people living in America

3. COMMAND
A system where society’s leaders, usually central government make all economic decisions; called a CENTRALLY PLANNED ECONOMY
Ex.) North Korea
Kim Jong II
Ex.) Cuba
Fidel Castro; Raul Castro

4. MARKET
Based on individual choice not government directives; consumers vote with their dollars and producers make decisions based on what can make them the most money;
In a market economy, people make decisions based on their own self-interest
Ex.) UK
Ex.) US

5. What economic system does the US have? How do you know?
We have a Market-Command system
The government controls certain aspects of our society known as the public sector; things like schools, postal service, etc.
For the most part, producers decide what they’ll produce and consumers are allowed to spend their money how they would like

6. What are the advantages and disadvantages of a traditional economic system?
The three economic questions are clearly answered by custom and tradition
There is little disagreement over economic goals
DISADVANTAGES:
They resist change
They are less productive because of this
Everything is based on tradition so people aren’t always using their strengths
They have a lower standard of living

7. Why are traditional economies being forced to change?
Modern telecommunications have bombarded these societies with images of what the rest of the world is like; the young people see these things and want them
Many are leaving their societies to find a different life for themselves

8. All resources are privately owned
COMMUNISM
SOCIALISM
MARKET SYSTEM
WHO OWNS RESOURCES?
HOW ARE RESOURCES ALLOCATED?
WHAT ROLE DOES GOVERNMENT PLAY?
Government
Government owns basic resources; the rest are privately owned
All resources are privately owned
Market forces allocate resources
Government planners decide how resources are used
Government planners allocate basic resources; market forces allocate privately-owned resources
Government makes all economic decisions
Government makes decisions in the basic industries
Government’s role limited-mostly to ensure market forces are free to work

9. What effect do command economies have on people?
ADVANTAGES
DISADVANTAGES
They try to provide for everyone: sick, elderly
Central planners usually have very little understanding of local conditions
Leaders can choose to produce items that do not make money
Ex.) medicines
Workers have very little incentive to improve their productivity
They face shortages
Individual rights are subordinate to the needs of the state

10. Why are consumer goods often in short supply in a command economy?
Because they often set prices well below that of a market economy.

11. Why do these economies often fail?
Because of the human suffering that often goes hand in hand with command economies.

12. The Communist Manifesto
Karl Marx
MAJOR WORKS:
Das Kapital
The Communist Manifesto

13. Karl Marx FAMOUS QUOTE:
“Workers of the world unite; you have nothing to lose but your chains.”
The whole industrial system relied on the exploitation of workers. He was telling them to unionize and fight back.

14. BELIEF ABOUT WORKERS & BOSSES:
Karl Marx
BELIEF ABOUT WORKERS & BOSSES:
He believed that once the wealth was so concentrated in so few hands, that workers would revolt and create a new society without economic class.

15. Karl Marx HIS INFLUENCE: Russian Revolution – 1917
Chinese Revolution – 1949

16. Karl Marx Video

17. BIBLIOGRAPHY: