1. Communism Socialism Laissez Faire Capitalism How the Economy Works
All businesses are owned by the government.
Govt. owned businesses produce goods for consumers.
Command economy
Private companies, owned by individual citizens, make stuff and sell it for all they can.
However, the govt. limits how much they can make each year.
Private individuals open businesses and sell their products or services for as much as they can.
Buy low, sell high
Free Market / Free Enterprise
How the Economy Works
Role of Govt. in the Economy
The govt. determines everything:
- What products are made
- Prices for products and services
- Wages
- What jobs people have and where they go to school
- Where workers live
The government owns and operates public utilities (power company, water, transportation)
Laws set a minimum and a maximum profit and wage.
Govt. regulators enforce worker and consumer safety laws.
None! It is not the job of the government to regulate business and industry.
Everyone, regardless of their job, skills, training, etc… shared profits and wages equally.
No unemployment, as everyone has a paying job or a govt. provided retirement income.
Cap on wages and profits is enforced by the govt.
- Excess profits and wages are taken by the govt. in the form of taxes and given to those in need in the form of govt. programs.
- Still a gap between rich and poor
Unlimited profits for business and industry
Workers earn what their skills are worth.
Usually higher education = more $
Profits and Wages
The govt. makes sure that everyone is equal, thus it provides everyone with the necessities of life from birth to death.
Extensive. Every citizen is guaranteed the necessities of life.
- People should try to get them on their own, but if they can’t, the govt. will help.
- Minimum wage, govt. funded health care, free education for all.
- Paid for by taxes on the wealthy.
None. It is not the job of govt. to interfere in people’s lives.
Govt. Help for Those in Need