1. Capitalism, Socialism, and Communism

2. Capitalism “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Adam Smith Adam Smith

3. Capitalism an economic system based on private ownership and investment of money to make a profit.

4. Capitalism Adam Smith  University professor in Scotland  Wrote “The Wealth of Nations”

5. Capitalism Businesses compete with each other for the consumer’s money.

6. Capitalism  Each business tries to provide goods and services that are better and less expensive than their competition.

7. Capitalism  A market economy aims to produce the best goods at the lowest prices.

8. Supply and Demand

9. Capitalism Leaders of the Industrial Revolution (owners of railroads, factories, and mines), did not agree with those who were calling for reform at the time. They believed in Laissez-faire (“let do” or “let them alone”) economics… People should be free to buy and sell, hire and fire, free from government Interference.

10. Laissez faire Capitalism Government does not interfere in the economy. No government regulations, such as minimum wage laws

11. Laissez faire Capitalism  owners of industry and business set working conditions without interference

13. Capitalism Positive Effects:  Competition leads to progress Negative Effects:  Unequal distribution of wealth leads to social unrest

15. Industrial Revolution ► As industry grew in the 1700s and 1800s, the gap between the “haves”, and the “haves-not” was widening. ► Living and working conditions continued to get worse for the working class… Some people started calling for reform…

16. Socialism Some people thought that ending workers’ misery required eliminating Capitalism completely! Socialism: The belief that the means of production, capital, land, raw materials, and factories, should be owned or controlled by the society either directly or through the government. This way, wealth could be distributed equally!

17. Socialism

18. Socialism an economic system in which the factors of production are owned by the public and operate for the welfare of all.

20. Socialism Government actively regulates the economy  Controls major industries and resources.

21. Marxism One man dismissed the ideas of early socialists as impractical, he set out to provide a scientific basis for socialism… Karl Marx, working with Friedrich Engels, wrote The Communist Manifesto, where they tried to appeal to the world’s workers… Karl Mark - Believed that to get to the best government you had to go through 4 stages: 1) Feudalism - Depended on ownership of land. Land = Wealth/power It ended because the lower classes rose up. 2) Capitalism - The rise of the industry. Industry = Wealth/power The working class would rise up to crush the middle class. 3) Socialism - Private property is banned, and the state MUST control all property to distribute it equally. ANYTHING that produces wealth should be government controlled… 4) Communism - THE END OF HUMAN EVOLUTION! - People would be so use to following rules that there would no longer be the need for a government! - Government would slowly go away and people would live in harmony. This would be the perfect society…

22. ► “Let the ruling classes tremble at the Communist revolution. The proletarians (working class) have nothing to lose but their chains. They have a world to win. Working men of all countries unite!”

23. Communism “The worker of the world has nothing to lose, but their chains, workers of the world unite.” - Marx “From each according to his ability, to each according to his need."

24. Communism ► Communism – an economic system in which all means of production are owned by the people, private property does not exist, and all goods and services are shared equally.

25. Communism ► Karl Marx  German journalist  Radical Socialist  Wrote “The Communist Manifesto”

26. Communism ► Friedrich Engels  Son of a wealthy German textile entrepreneur  Radical Socialist  Co-Wrote “The Communist Manifesto” and “Das Capital”

28. Communism ► In many ways, Communism was a reaction to the Industrial Revolution and Capitalism

29. Communism ► The Industrial Revolution intensified class struggle (rich vs. poor)  “Haves” take advantage of “Have-Nots” (proletariat)

30. Communism  Workers are exploited by employers  The labor of workers profits employers

31. Communism ► Marx and Engels called for workers of the world to unite and overthrow the rule of the rich.  Wealth would be redistributed  Classes and private property would cease to exist