Economic system

Economic systems The method a government uses to ensure the people are able to obtain the things they need and want. Deals with the production and distribution and consumption of goods and services and their management

wrote the Wealth of Nations (1776) supported the concept of laissez-faire which is French for “to let (people) do (what they want)” – government should not interfere with the economy, it only had three purposes: » protect society from invasion (army) » defend citizens from injustice (police) » maintain public works, such as roads and canals Adam Smith (Scottish)

Capitalism Free-enterprise: economy is free from government control – Individuals are allowed to own property – Businesses are privately owned and operated for profit Economy is driven by competition – Businesses compete for profits – Workers compete for wages Pay is usually based on productivity and skill level A market economy – Wages are negotiated at the workplace – Prices are negotiated in the marketplace Society is divided into classes – Rich, middle class, poor

Marx = claims his socialism is scientific Communist Manifesto 1848 Marx feels the church is the opium for the masses Marx 2 class system (Bourgeoisie and Proletariat) Proletariat Revolution = classless society where history stops “heaven on earth”

Socialism The Government to ensure that everyone has access. – Examples are transportation, utilities, and healthcare The government may also offer public housing, healthcare, free public education, and a retirement system – Believes that there are some things that everyone should have. – It is the responsibility of the government to provide these necessities.

Communism Classless society – No rich, middle class, or poor All wealth is distributed evenly among the people – No ownership of private property All property is owned by the government Economy is strictly controlled by the government All farms, factories, mines, etc. are run by the government Individuals cannot earn profit from businesses Prices and wages are set by the government Government decides what and how much to produce