World Economic Systems

Capitalism-“A free market system in which the factors of production are controlled by individuals in the effort to accumulate wealth. There is little government intrusion. Socialism- A economic system in which the Factors of Production are controlled by the government.

Factors of Production Labor Management Capital Raw Materials

Types of Economic Systems Capitalism A definition…… “A free market system in which the factors of production are controlled by individuals in the effort to accumulate wealth. There is little government intrusion.

Capitalism Some Negatives…… There will be people who are poor Left unchecked business will abuse their power. Some Positives……. Opportunity to build wealth Tends to favor the individual and democratic government

Socialism Based on the ideas of Karl Marx Definition… A economic system in which the Factors of Production are controlled by the government. Evolves as a reaction to the excesses of capitalism. (Marx said all history was about the rich exploiting the poor.) Two subtypes: Democratic Socialism-government controls the main aspects of the economy but with much private ownership (this is the most common type of economic system) Communism-government controls all aspects of the economy

Socialism Some Positives…… Promotes equality for all Promotes the idea of society being responsible for all its members (health,education,treatment of labor) Some Negatives…… Necessitates large government with high cost to operate and extensive intrusion into your life. Governments have not proven that they are the most efficient at running industry. High taxes. Why?

Political Systems and Economic Systems 0ften Correlate With One Another There are really only two basic types of political systems… Democracy and Dictatorship (they can be divided into numerous subtypes)

Communist Nations in 1980 * The Soviet Union: (Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.) * Asian countries: China, North Korea, Laos, Vietnam, Afghanistan, Cambodia, Mongolia, and Yemen. * Soviet-controlled Eastern bloc countries: Bulgaria, Czech Republic, East Germany, Hungary, Poland, Romania, Slovakia. * The Balkans: Albania, Yugoslavia, Bulgaria. * Africa: Angola, Benin, Zaire (Dem. Rep. of Congo), Ethiopia, Somalia, Eritrea, and Mozambique.

Communist States Today

Levels of Economic Development

Least Developed Nations: 30 nations Of these 30 nations, 10 to 15 are one- crop economies Developed Nations: nations Developing Nations: 170+ nations

DevelopED Nations Per Capita GNP- 20 Most Developed Nations For example: the United States has only 6% of the world’s population BUT 35% of the world’s income.

DevelopING Nations

Least Developed Nations

Characteristics of Developing Nations Many people still live in rural areas Subsistence Agriculture as opposed to Commercial Agriculture

Characteristics of Developing Nations –1 or a few large cities (primate/megacities ) that draw population- few small regional cities with available economic opportunities. However, remember that cities in developing nations are still experiencing the most rapid growth

Characteristics of Developing Nations High levels of poverty (absolute poverty existing on less than $1 a day)

Characteristics of Developing Nations Lack of a tax base Poor Infrastructure Poor education systems

Characteristics of Developing Nations Low life expectancy and high infant mortality rates (poor access to health care)

Characteristics of Developing Nations Extreme regionalism Prohibitive value systems pitting one group against another Very little national cohesion Traditional female roles

Characteristics of Developing Nations Long period of colonialism (independence only came in the late 20th Century) Still maintain their dependence on former colonial powers