1. The World’s Economic Systems

2. Various economic systems attempt solutions to the problem of scarcity
Traditional Undeveloped nations/ regions
Market Industrialized, capitalist, some socialist
nations
Command Communist, some socialist nations or
dictatorships
Mixed Most modern economies are now
mixed economies

3. $

4. Capitalism Advantages
Efficiency is the main advantage of Capitalism.
- Efficiency created by freedom of choice, guided by price
- Price directs purchases…purchases direct production
- Resources used efficiently to make what people want
Flexibility – capitalism accommodates change easily
- Self-adjusting – responsive to consumer demand.
- Changes can occur in many places at once.
Encourages Excellence – Rewards ambition

5. Capitalism Disadvantages
Doesn’t always satisfy everyone’s needs – only those willing and able to buy goods – ignores poor and those who can’t compete.
Focus is private sector – ignores public such as roads, the environment, unless there is profit in it.
Pure Capitalism ultimately erodes itself - reaches a point where competition is eliminated & price becomes irrelevant.
Why is this so?

7. Why Capitalism?
THE THIRD WORLD IS VERY MUCH LIKE THE FIRST WORLD - JUST POORER: WHAT WORKS FOR THE WEST WILL WORK FOR THE REST AS WELL" Margaret Thatcher, Former Prime Minister of England

8. Socialism Advantages Fairness -main advantage of Socialism
- tries to distribute resources evenly across society
- allows some private property and investment
Balance attempted between government allocation of resources and private allocation.
Basic social services (healthcare) are centrally planned and distributed throughout society.

9. Socialism Disadvantages
Incentive to succeed lessened - Why?
When scarcity causes cutbacks – everyone suffers equally, regardless of how hard one works.
Economy is slower to respond to economic difficulties – government bureaucracy.

10. Communism Extreme Socialism - Authoritarian
Government owns all resources – NO private property. Plans for all uses of them.
Little or no political freedom
Russian vs. Chinese
Industrial vs. Agrarian

11. Communism Advantages
Central Planning – one specific direction for each department
All standards (sizes…choices, etc…) are known.
Everyone knows the role they play in the job they do.

12. Communism Disadvantages
No incentive to work hard – no one gets any more when they do. WHY NOT?
When government stalls – economy stalls.
Difficult to react to change. WHY IS THIS?
Top down direction leaves no room for correction at the operations level.
People become frustrated and system breeds mediocrity.

13. What’s Good?
How is a system that lasted for over 70 years is losing its appeal?
Is there any way for systems of Socialism/Communism to succeed in today’s World?
Is the equality they offer worth trying?