Capitalism Socialism Communism

Capitalism “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Adam Smith, The Wealth of Nations

Capitalism an economic system based on private ownership and investment of money to make a profit.

Capitalism Positive Effects: Competition leads to progress New and better products, innovation best goods are produced at the lowest prices Law of supply and demand regulate prices -- “invisible hand”

Competition As businesses compete, one against the other, for the consumer’s money, products improve

Laissez-faire Capitalism “let do” or “let alone” No government interference No government regulation (minimum wage laws, safe working conditions, etc…)

Capitalism Negative Effects: As industry grew in the 1700s and 1800s, the gap between the “haves”, and the “haves-not” grew. Unequal distribution of wealth led to social unrest

Industrial Revolution Living and working conditions continued to get worse for the working class… Some people thought that ending workers’ misery required eliminating capitalism completely! Some people started calling for reform…

Socialism Socialism: The belief that the means of production, capital, land, raw materials, and factories, should be owned or controlled by the society either directly or through the government. This way, wealth could be distributed equally!

Socialism An economic system in which the factors of production are owned by the public and operate for the welfare of all

Socialism Government actively regulates the economy Government controls major industries and resources.

In many ways, Socialism was a reaction to the Industrial Revolution and Capitalism Communism was a radical reaction to Socialism

Engels and Marx Radical Socialists wrote The Communist Manifesto, 1848 wanted to appeal to the workers of the world

“From each according to his ability, to each according to his need." Communism an economic system in which all means of production are owned by the people, private property does not exist, and all goods and services are shared equally. “From each according to his ability, to each according to his need."

Karl Marx German journalist, philosopher, economist Dismissed the ideas of early socialists as impractical Wanted to provide a scientific basis for socialism Father of communism

Communism Marx and Engels called for workers of the world to unite and overthrow the rule of the rich. Wealth would be redistributed Classes and private property would cease to exist

Communism All people are treated equally the government owns and controls everything Property (no private property or inheritance rights) Central bank Means of production (factories and farms) Education (no private schools) Communication Transportation Labor Income tax (the more you made, the more you paid)

“Let the ruling classes tremble at the Communist revolution “Let the ruling classes tremble at the Communist revolution. The proletarians (working class) have nothing to lose but their chains. They have a world to win. Working men of all countries unite!” Karl Marx

Marx and Engels stages of history: Primal No private property No freedom or time for anything except basic needs Feudal Private property = wealth & power Aristocracy oppress the serfs No freedom or time for self-fulfillment

Marx and Engels stages of history: Capitalism Means of production = wealth & power Individual freedom is withheld from the working class who remain oppressed by wage labor

Marx and Engels 4 stages of government: Socialism/Communism No Private property the state controls all property to distribute it equally Freedom and self-fulfillment