Economic Systems of Industrialization

ROUND 1

Capitalism GOAL: FREEDOM Economic system run by a free market Based on private ownership & individual economic freedom. Most means of production, such as factories and businesses, are owned by private individuals. Private owners make decisions about what & when to produce and how much products should cost. 

How does this fit our game? Private ownership (students owned their candy) Freedom of competition (all played rock, paper, scissors) Results in unequal economic classes (some students won, most lost)

Capitalism Major principle of Capitalism: “Laissez faire” (leave alone) Government does not regulate businesses People compete to get money, property People get freedom, but less equality

Foundations of Capitalism Adam Smith - called “the father of Capitalism” Wrote “The Wealth of Nations” The Law of self-interest – people work for their own good The Law of competition – competition forces people to make a better product The Law of supply and demand – in a free market, enough goods would be created to meet demand

ROUND 2

Socialism GOAL: FAIRNESS Economic system based on governmental central planning & collective ownership. Wealth & income should be shared more equally to meet the basic needs of all citizens. Government has a responsibility to redistribute wealth to make society more fair & just. Government provides a wide range of basic services to citizens free of charge or at a discount - typically including university education, health care, child care, housing, telecommunications, energy & more in some countries.  Higher taxes provide these services

How does this fit our game? Government ownership of industry (I collected candy) Goal is for economic equality (I redistributed evenly) Aims for an equal society (everyone has the same amount of candy)

Socialism There are many kinds of socialism, so no one definition can apply to all of them. Socialists are different from Communists as they do not believe that all private property should be eliminated.

ROUND 3

Communism GOAL: EQUALITY Economic system where no private ownership of property is allowed. Property should be shared - the people would ultimately control the economy Businesses are owned by the community People all get equal pay The government exercises the control in the name of the people, at least in the transition between capitalism & communism. The goals -to eliminate the gap between the rich & poor & bring about economic equality.

How does this fit our game? Goal of classless society achieved (students refuse to play the game and opt to share candy) No government needed (I don’t need to supervise)

Marxism – a political idea Karl Marx – economist & philosopher 1818-1883 The Industrial Revolution had made rich richer, poor poorer Believed that private ownership encouraged greed Believed that workers would eventually rise up & create a system in which people shared all goods and services

Important Note! There is no purely capitalist or communist economy in the world today. The capitalist United States has a Social Security system and a government-owned postal service. Communist China now allows its citizens to keep some of the profits they earn.

Differences between the economic systems Capitalism? Socialism? Communism?

Hold up a C for Capitalism, an S for Socialism and a COM for Communism….

Choose the economic system that fits Franz works all day in a factory making car tires. He would like to do something else, but this is the job he was assigned by the government. He doesn’t get paid much, but the government promises that he will always have a job and will provide the things he needs.

Choose the economic system that fits Erika was born in a poor family, raised by a single mother without a steady job. Through hard work in school, she was able to attend college and become a lawyer. She is now one of the most successful lawyers in New York, where she owns a fancy apartment and makes over $1 million a year.

Choose the economic system that fits Susan and John run a very successful store in their town but most of the money they make goes to the government in taxes. John was in a car accident, he was badly hurt and can’t work for awhile. He was able to get good medical care at a hospital without paying for medical bills, and a nurse comes to check on him once a week, free of charge.