ECONOMY This word is thrown around a lot in very broad ways…what is it? How does it impact nation-states and societies??

Look back at your “New Ways of Thinking” (Ch. 7 Sec. 4) Notes What new ideas came out of the Industrial Revolution? Why do you think these ideas emerged?

Capitalism, Communism, and Socialism

What is capitalism? Economic system. Believes in individual ownership and competition. The theory is that when everyone is selfish, it benefits everyone. Adam Smith is “the” capitalist – Wealth of Nations: capitalism good for society

What’s good about capitalism? Freedom, choice. You can work wherever, buy whatever, and pretty much do whatever. If you’re successful, you can be very successful. Think Bill Gates, Papa John, Mark Zukerburg (is that his real name?). Who would support this idea?

What’s bad about capitalism? No “safety net.” If you’re unsuccessful, you can be very unsuccessful. Think about the poor. Big gap between rich and poor.

What is communism? Economic system. Believes in collective (group) ownership and a planned economy (government makes decisions). The theory is that everybody pools their resources and labor to evenly distribute everything. Karl Marx is “the” communist – The Communist Manifesto: 1848, class struggle, problems of capitalism – Das Kapital: 1867, critique of capitalism – Both written with Engels

Central Idea: Communist Manifesto ‘What I did that was new was to prove (1) that the existence of classes is only bound up with particular, historic phases in the development of production; (2) that the class struggle necessarily leads to the dictatorship of the proletariat; (3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to classless society.’ [Karl Marx, letter to J. Weydemeyer, 5th March 1852 in Karl Marx, Frederick Engels Selected Works Vol.1 (Progress Publishers, Moscow, 1977) p.528.] - See more at: spalding/communist-manifesto#sthash.yyei8xcT.dpuf

What’s good about communism? Security, basic needs met. Everyone would have a job, house, health care, etc. Who would support this idea?

What’s bad about communism? Lack of choice No reward for being a better worker or punishment for being a slacker (incentives and consequences). Everyone expected to be the same (lack of focus on individual growth).

Communist Manifesto 1848 Focus: Class Struggle (bourgeois-middle class & proletariat- lower class) Problems within capitalism Abolition of property Heavy, progressive taxes Abolition of inheritance Confiscation of property of all emigrants and rebels Central banking State-controlled communication and transportation State-controlled education of the children

Marxism Marx and Engels studied the history of the world’s economies Basic Communism Feudalism Capitalism Communism!!! Socialism They believed they discovered an inevitable pattern

Communism/Socialism: What’s the difference? Socialism is the stage between Capitalism and Communism. It builds upon the previous system (Capitalism) by nationalizing the “means of production” (i.e. corporations, resources, banks, etc.), but not by making everyone equal. People are paid wages based on several factors (social need, difficulty, amount of schooling required, etc.), so not everyone will make the same wage.

How’s this related to the Industrial Revolution? Adam Smith’s capitalism dominated the IR- Led to bad working conditions. Karl Marx wrote about communism as solution to capitalism’s problems. – Marx said the workers would get fed up and overthrow their governments and start communism.

Warm-Up Which economic system is better for society…communism or capitalism?