1. The Three Economic “Isms”
Capitalism
Communism
Socialism

2. Industrialization Leads to New Economic Philosophies.

3. Industry

4. Industry-- Factories

5. Railroads

6. Capitalism Capitalism– ex. U.S.A. Laissez-faire
Individual choice/ freedom of choice
Individuals run the business
Economic Classes: Rich and poor and middle-class
Competition makes goods better and cheaper
Government: Democracy

8. History of Capitalism Result of absolutism and mercantilism
Adam Smith (Enlightened economist)
Industrialization
Britain, U.S. “laissez-faire”

9. Socialism
Government and Economy of the people

10. Socialism– doesn’t really exist
Everyone agrees to share economy
Everyone is equal in terms of money
Each person will receive money according to how much they need
No competition
Social Classes: NONE
Government: Should be democracy, but dictator never stepped down

11. Why no Socialism? In history, the dictator had NEVER stepped down!
Problem with Marx’s theory, he didn’t take in to account the nature of man

12. Communism Communism-- ex. N. Korea & Cuba
Government controlled Economy
Government controls all business decisions
No competition
Economic Classes: Rich government and Poor citizens (proletariat)
Government: Dictator

13. History of Communism Industrialization led to 2 social classes
Proletariat (working poor)
Bourgeoisie (wealthy Industry owners)

14. Proletariat– Factory Workers

15. Chinese Proletariat

16. Bourgeoisie-- Educated

17. Bourgeoisie– Stick Together

18. Bourgeoisie– Wealthy Industrialists

19. The 2 classes Clash
Karl Marx theorized that the Proletariat would rise up against the Bourgeoisie in a civil war– Have’s vs. Have Not’s
Bourgeoisie would lose because they are much smaller
Proletariat would require a dictator to control the chaos that follows a civil war
Dictator would step down
Socialism would ensue
The end of social classes

20. Russian Revolution
'Working people arise!'

21. Photos of the Russian Revolution

22. Marxist Theory

23. The Communist Manifesto
Seven Stages to the Establishment of Communism/ Socialism
Historical Materialism
Theory of Surplus
Stages in Economic Development
Class Struggle
Use of Force
Dictatorship of the Proletariat
Establishment of Communism/ Socialism

24. Historical Materialism
Marx Theory: Events and Institutions are based on economic forces. The dominant economic class determines the rules and moral of Society.
Objections to Marx: Too simple an explanation. Many other factors determine laws and morals; i.e. Catholic Church

25. Theory of Surplus
Marx Theory: Value of goods is based only on the labor of the workers. What they produce is sold for far more than they can make; the result= rich gets richer, poor gets poorer.
Objections to Marx: Other factors add to the value of a product; materials, factories, ideas to help produce goods. In U.S. and Europe the poor is not getting poorer because of unions and labor laws.

26. Stages in Economic Development
Marx Theory: There are 5 stages, each superseding the previous stage. Therefore, eventually, Socialism will override Capitalism.
Five Stages:
Communal, Slave, Feudalist, Capitalist, Socialist
Objections to Marx: The stages did not go in order in every culture, ex. China and Japan. There is no proof that Capitalism must fail, or that the next stage would be Socialism.

27. Class Struggle
Marx Theory: Historically, there are opressors and oppressed; bourgeoisie and proletariat. As bourgeoisie grow smaller and powerful, proletariat are treated worse causing them to rise-up.
Objections to Marx: Marx did not consider the middle class when developing his theory. He made the assumption the middle class would be with the proletariat.

28. Use of Force
Marx Theory: With the exception of some highly advanced democracies; i.e. the U.S. and G.B., force would be necessary to achieve socialism.
Objections to Marx: Changes can be made peacefully.

29. Dictatorship of the Proletariat
Marx Theory: After the force (civil war/ revolution) a dictator will arise briefly until opposition is ended. Then classes will be abolished and a class-less society will emerge.
Objections to Marx: Dictatorships do NOT end! This results in a “new” class that is similar to the bourgeoisie, and again proletariat are treated poorly. Ex. U.S.S.R., 50 + Years with a dictator.

30. Establishment of Communism/ Socialism
Marx Theory: During the Dictatorship, communism is established.
Public ownership of production, distribution and consumption; eliminating competition and classes, No more class struggle.
Work to ability and receive according to NEED.
Objections to Marx: How do you determine need? Communists governments are strengthening with more regulations, not becoming socialist.