1.

Capitalism, a term of disparagement coined by socialists in the midnineteenth century, is a misnomer for economic individualism, which ADAM SMI ! earlier called the obvious and simple system of natural liberty "Wealth of Nations#$ %conomic individualism&s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate$ Its ma'or corollary is that the state e(ists to protect individual rights$ Sub'ect to certain restrictions, individuals "alone or with others# are free to decide where to invest, what to produce or sell, and what prices to charge$ here is no natural limit to the range of their efforts in terms of assets, sales, and )*+,I S- or the number of customers, employees, and investors- or whether they operate in local, regional, national, or international mar.ets$ 2. Feudalism /hen was ,eudalism established in %ngland0 /hen was ,eudalism established in %ngland0 ,eudalism in %ngland was established by /illiam the 1on2ueror and the 3ormans following the defeat of the %nglish Anglo Sa(ons at the 4attle of !astings in 5677$ he system and structure of feudalism had been well established in %urope for some time and the 3ormans imposed feudalism in %ngland$ /hat was ,eudalism0 ,eudalism was based on the e(change of land for military service$ 8ing /illiam the 1on2ueror used the concept of feudalism to reward his 3orman supporters for their help in the con2uest of %ngland$ 9ife lived under the Medieval ,eudal System, or ,eudalism, demanded that everyone owed allegiance to the 8ing and their immediate superior$ ,eudalism ,eudalism had a dramatic effect on %ngland and %urope during the Middle Ages$ he pyramid of power which was the ,eudal system ran to a strict :pec.ing: order - during the Medieval period of the Middle Ages everyone .new their place$ he emergence of the Medieval ,eudal System of the Middle Ages affected all spheres of Medieval society; a land-based economy, the 'udicial system and the rights of the feudal lords under the feudal system and the lac. of rights for the serfs and peasants$ he events which led to the decline of the feudal system$ he most important and interesting aspects and facts about feudalism have been comprehensively detailed in the pages which can be accessed from this section$ 3. Mercantilism

Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state$ ADAM SMI ! coined the term mercantile system to describe the system of political economy that sought to enrich the country by restraining imports and encouraging e(ports$ his system dominated /estern %uropean economic thought and policies from the si(teenth to the late eighteenth centuries$ he goal of these policies was, supposedly, to achieve a favorable balance of trade that would bring gold and silver into the country and also to maintain domestic employment$ In contrast to the agricultural system of the physiocrats or the laisse<-faire of the nineteenth and early twentieth centuries, the mercantile system served the interests of merchants and producers such as the 4ritish %ast India 1ompany, whose activities were protected or encouraged by the state$ he most important economic rationale for mercantilism in the si(teenth century was the consolidation of the regional power centers of the feudal era by large, competitive nation-states$ +ther contributing factors were the establishment of colonies outside %urope- the growth of %uropean commerce and industry relative to agriculture- the increase in the volume and breadth of trade- and the increase in the use of metallic monetary systems, particularly gold and silver, relative to barter transactions$ 4. Industrial Revolution he era .nown as the Industrial *evolution was a period in which fundamental changes occurred in agriculture, te(tile and metal manufacture, transportation, economic policies and the social structure in %ngland$ his period is appropriately labeled revolution, for it thoroughly destroyed the old manner of doing things- yet the term is simultaneously inappropriate, for it connotes abrupt change$ he changes that occurred during this period "5=76-5>?6#, in fact, occurred gradually$ he year 5=76 is generally accepted as the eve of the Industrial *evolution$ In reality, this eve began more than two centuries before this date$ he late 5>th century and the early l@th century brought to fruition the ideas and discoveries of those who had long passed on, such as, Aalileo, 4acon, Descartes and others$ Advances in agricultural techni2ues and practices resulted in an increased supply of food and raw materials, changes in industrial organi<ation and new technology resulted in increased production, efficiency and profits, and the increase in commerce, foreign and domestic, were all conditions which promoted the advent of the Industrial *evolution$ Many of these conditions were so closely interrelated that increased activity in one spurred an increase in activity in another$ ,urther, this interdependence of conditions

creates a problem when one attempts to delineate them for the purpose of analysis in the classroom$ herefore, it is imperative that the reader be acutely aware of this when reading the following material$ he narrative portion of this unit is intended for the teachers use as a guide to teaching about this sub'ect$ It does not purport to include all that is needed to teach about the Industrial *evolution$ It does provide a basis for teaching about the sub'ect, leaving room for the teacher to maneuver as hisBher style of teaching permits$ +ne manner of capitali<ing on any shortcomings in this material is to design individual or small group student activities which will enhance their study s.ills "reference materials, library use, research reports, etc$#, while at the same time locating specific information$ Also included are suggestions for utili<ing this material in class$ In the final analysis it is the teacher who will determine the manner in which this material is used, so it is hisBhers to modify as deemed necessary$

5. Welfare capitalism /elfare capitalism is the economic combination of traditional free mar.et principles mi(ed with laws or practices from a welfare state$ A welfare state helps individuals by offering minimum wage pay, short wor. days, restrictions on wor.ing ages and unemployment benefits$ In some countries, welfare capitalism involves the use of government regulation to force businesses to pay for these items in the form of ta(es$ Aovernments may re2uire businesses to contribute a portion of profits to funds that will help pay for wor.ers who are in'ured on the 'ob or receive termination form the company$ he bottom line is that welfare capitalism provides a safety net for the individuals living and wor.ing in a society$ raditional liberal economic theory states that wor.ers are at a severe disadvantage compared to companies$ /or.ers are unable to pay for the bare minimum lifestyle needs and therefore re2uire help when hard times arise$ hrough the payouts of government programs or transfer payments from corporations, individuals can at least maintain their lifestyle until they can find other sources of income to sustain themselves$ In some ways, this is a form of socialism where common ownership is available for capital generated by organi<ations$ 6. Soviet st!le socialism

an economics system that uses administrative control or central planning to solve the coordination problems; what , how, and for whom$ he Cnion of Soviet Socialist *epublics "CSS*#, occasionally called the Cnited Soviet Socialist *epublic, was a constitutionally socialist state that e(isted in %urasia from 5@DD to 5@@5$ A soviet is a council, the theoretical basis for the socialist society of the CSS*$ %merging from the *ussian %mpire following the *ussian *evolution of 5@5= and the *ussian 1ivil /ar of 5@5>- 5@D5, the CSS* was a union of several Soviet republics, but the synecdoche *ussia - after the *ussian S,S*, its largest and most populous constituent state - continued to be commonly used throughout the country:s e(istence$ he geographic boundaries of the CSS* varied with time, but after the last ma'or territorial anne(ations of the 4altic states, eastern )oland, 4essarabia, and certain other territories during /orld /ar II, from 5@E? until dissolution, the boundaries appro(imately corresponded to those of late Imperial *ussia, with the notable e(clusions of )oland and most of ,inland$ As the largest and oldest constitutionally communist state in e(istence, the Soviet Cnion became the primary model for future communist nations during the 1old /ar- the government and the political organi<ation of the country were defined by the only political party, the 1ommunist )arty of the Soviet Cnion$ ,rom 5@E? until dissolution in 5@@5-a period .nown as the 1old /ar-the Soviet Cnion and the Cnited States of America were the two world superpowers that dominated the global agenda of economic policy, foreign affairs, military operations, cultural e(change, scientific advancements including the pioneering of space e(ploration, and sports "including the +lympic Aames and various world championships#$ Initially established as a union of four Soviet Socialist *epublics, the CSS* grew to contain 5? constituent or Funion republicsF by 5@?7; Armenian SS*, A<erbai'an SS*, 4yelorussian SS*, %stonian SS*, Aeorgian SS*, 8a<a.h SS*, 8irghi< SS*, 9atvian SS*, 9ithuanian SS*, Moldavian SS*, *ussian S,S*, a'i. SS*, ur.men SS*, C.rainian SS* and C<be. SS*$ ",rom anne(ation of the %stonian SS* on August 7,5@E6 up to the reorgani<ation of the 8arelo -,innish SS* into the 8arelian ASS* on Guly 57, 5@?7, the count of Funion republicsF was si(teen$# he *ussian ,ederation is the successor state to the CSS*$ *ussia is the leading member of the 1ommonwealth of Independent States$

". #$eor! of Socialism - " in theory # an economic system based on individuals: good will toward others, not on their own selfinterest- in principle, society decides what, how, and for whom to produce$ , socialism is an economic system that tries to organi<e society in the same way as most families are organi<ed, trying to see that individuals get what they need$ Socialism tries to ta.e other people:s needs into account and ad'ust people:s own wants in accordance with what:s available$ In socialist economies, individuals are urged to loo. out for the other person- if individuals: inherent goodness won:t ma.e them consider the general good, government will ma.e them$ !owever the economic systems based upon people:s goodwill have tended to brea. down$ his is certainly true of the ma'or countries that tried socialism starting in the 5@66s$ In practice socialist governments had to ta.e a strong role in guiding the economy$ Socialism became an economic system based on the government ownership of the means of production, with an economic activity governed by the central planning$

%. Mar&'s anal!sis his article discusses Mar(:s analysis of capitalism, including the concepts of historical materialism, class society, e(ploitation, commodity, value, money, capital, labour-power, value of labourpower, surplus-value, constant and variable capital, commodity law of e(change, capitalist law of e(change, e2uali<ation of the profit rate, prices of production, absolute and relative surplus value, the circuit of capital, simple and e(panded reproduction, capital accumulation, centrali<ation and concentration of capital, technical change, reserve armies of labour, rent, interest, commercial and ban. profit, the falling rate of profit, viable technical change, and cyclical crises$