Capitalism

Characteristics of Capitalism Land and capital are privately owned. (They are not owned by the government.) Land and capital are privately owned. (They are not owned by the government.)

Buyers and sellers interact in markets. Buyers and sellers interact in markets. Everyone is free to pursue their own self- interests. Everyone is free to pursue their own self- interests.

The Individual People Answer the basic economic questions Answer the basic economic questions Products are made and prices are determined based on SUPPLY AND DEMAND. Products are made and prices are determined based on SUPPLY AND DEMAND.

Laissez-Faire Hands off government The government should not be involved regulating the economy

THEORY: THEORY: Minimal government involvement is required. Competition will regulate the economy.

Practice: Government regulation does exist in most capitalist economies today. Government regulation does exist in most capitalist economies today. US example: Bailout Bill US example: Bailout Bill

The Industrial Revolution

Adam Smith Scottish Philosopher Scottish Philosopher Wrote Wealth of Nations Wrote Wealth of Nations

Examined how a market system worked Examined how a market system worked How producers decide what to make How producers decide what to make How consumers decide what to purchase How consumers decide what to purchase

Thought that a combination of self- interest, private property, and competition was best for society. Thought that a combination of self- interest, private property, and competition was best for society.

Karl Marx German Philosopher Promoted scientific socialism

Marx and others…. Thought that capitalism was divided between the haves and the have-nots Thought that capitalism was divided between the haves and the have-nots The have-nots were the proletariat (working class. The have-nots were the proletariat (working class. Marx felt the proletariat would lead a revolution against Capitalism Marx felt the proletariat would lead a revolution against Capitalism Marx and Engles wrote a pamphlet called the Communist Manifesto Marx and Engles wrote a pamphlet called the Communist Manifesto