1. Economic Systems “The ISMS”
What are Economic Systems?
Capitalism
Utilitarianism
Socialism
Communism

2. A. What are Economic Systems?
Different beliefs about how the wealth (money) of a society should be divided
These beliefs will develop because of the horrible working conditions of the IR
As the workers form unions (to push for better working conditions), they will have different ideas about how wealth should be divided by ALL of the people

3. B. Capitalism “Winners Take All”
Laissez-Faire Capitalism: an economic system in which money is invested in business in order to make a profit without government interference
Also called a “Free Market”
Adam Smith wrote about the benefits of capitalism in The Wealth of Nations
Individuals will play a key role in this system because they make the decisions

4. C. Utilitarianism “Government should get involved”
Belief that the government should interfere in business (the economy) if it promotes the greatest good for the greatest number of people
Did not believe that governments should run the economy, just step in if needed
Ex: Child Labor – government steps in to stop abuse

5. D. Socialism “Government Run”
The factors of production are owned by the government and operated (used) for the welfare of all.
Everyone would benefit the same from the production of goods.
Believed that the government should actively plan the economy and decide how to divide the wealth.

6. E. Communism “Everyone is EQUAL”
A form of complete socialism in which the means of production are owned by the people and private property, social classes, and government no longer exist.
Karl Marx wrote about communism in The Communist Manifesto

7. He believed that a socialist revolution would eliminate the need for government
That people would own businesses and industries collectively (together)
He said that all goods and services would be shared equally by the people