Economic Systems

1
Economic Systems

• Capitalism
• Socialism
• Communism

2
Definition

• A system for producing, selling, and distributing
  goods and services.

3
Capitalism (Free Market)

• Economic system in which private individuals or
  groups use private capital (money) and labor to
  produce goods and services.

4
Capitalism Features

• People control economic production and output.
• People decide what, where, and how to produce
  what consumers buy.
• Owners decide how much to pay workers and use
  profits.
• Prices are determined by supply and demand and
  competition.
• The role of government is to support businesses
  with minimal government involvement.
• Higher education and health care is paid for by
  the consumer.

5
Effects of Capitalism

• People can own land and business.
• Unequal distribution of wealth
• Low unemployment rate 3-5.
• Favors a democratic or free government.
• Creates the wealthiest nations.
• Creates economic classes poor, working poor,
  middle class, and rich.

6
Examples

• USA
• South Africa
• Japan
• Mexico

7
Socialism

• An economic system in which the government owns
  most basic industries, such as transportation,
  communication, and banking non basic industries
  are privately owned such as restaurants, hair
  salons, and factories.

8
Socialism Characteristics/Basic Industries

• Basic industries are essential for a nation to
  function. Ex transportation, communication
• Basic industries are ran for the good of society,
  not for profit.
• The government decides how much to pay for goods
  and how much to pay workers.
• Profits made from basic industry allow for
  nations to pay for health care and higher
  education.

9
Socialism Characteristics/Non Basic Industries

• Non basic industries are nice, but not necessary.
  Ex Internet Business
• Non basic industries and services follow a
  capitalist model.
• Non basic industries are privately owned and
  consumers decide what products to buy.

10
Effects of Socialism

• Lessens gap between the poor and rich
• Gives citizens equal availability to healthcare
  and education.
• Welfare and insurance for unemployed are
  distributed.
• People live comfortable lives, but have less than
  those living in capitalistic countries.

11
Examples of Socialist Countries

• Socialism is the ½ point between communism and
  capitalism.
• Spain, Portugal, Sweden, and Italy

12
Communism

• Economic system in which the government owns all
  property such as farms and factories, for the
  benefit of the citizens.

13
Communism Characteristics

• The government usually controls all aspects of
  citizens lives.
• The government controls the price of goods and
  services how much is produced, and how much
  workers are paid.
• People do not own businesses or factories, all
  means of production are owned by the government.

14
Effects of Communism

• The governments of communist countries are
  usually violent in nature and do not support
  freedom.
• Communism is aimed to create a classless society.
  
• Unemployment and poverty are common.
• People are not able to make their own economic
  decisions or to earn their own fortune.
• The USA fought the Cold War to stop the spread of
  communism.

15
Examples of Communism

• Cuba
• China
• North Korea