Sie sind auf Seite 1von 38

COMPARING ECONOMIC

SYSTEMS
• Socialism …
• Both an economic system and a political
way of thinking
• What does it say or preach?
• A nation’s wealth should be distributed to
everyone in a fair way. How can this be
done?
• Ownership in Socialism –
• Ownership of most of the means of
production is public rather than private.
The government, not the individual is the
center of the economy
Gov’t Econ
“ You have two cows. The government takes them and puts them in a barn
with everyone else’s cows, then gives you as much milk as it thinks you need.”
• Based on the idea of cooperation and
social responsibility
Socialism
• Equality
• The ideas is not just political equality
but social and economic as well.

Which of the above do we have in the


U.S.? Why?
Democratic Socialism
Under this system, people have basic
human rights and have some control over
the government officials through free
election.

- however, the government does own the basic means of


production and makes most economic decisions.
Socialism Strengths
• Guarantee minimum standard of living
“cradle to grave”
• Evens out differences - makes people more
equal
• Workers enjoy full “fruit of labor”
• Full employment
• End of poverty
• Production is geared toward use not profit
• People have more control over their lives?
Socialism Weaknesses
• Complicates government (bureaucracy)
• Robs human incentive
• Too much government control
• Individual freedom is secondary to
state needs
• High taxation and redistribution of
wealth
History

• Came about after the Industrial


Revolution
• The Rich got richer and the poor…….
• Great suffering by the workers
In industrialized nations…
Population is divided between the:

•Bourgeoisie – capitalist who own the


means of production

•Proletariat- workers who produce the goods


• Karl Marx began to criticize capitalism
• Two thoughts
– Change would come through a violent and
bloody revolution
– Change would come through peaceful
means
• Socialist Changes

Und capitalist society


vill have to go
through a series of
changes
• Nationalization
• The Welfare State (Social Programs)
• High Taxation
• Command Economy
Socialists Countries
• Northern Europe
– Sweden
– Finland
• France

• Some south American Countries


– Venezuela
Communism

• A political system in which the government


owns all property and is ruled by one party
with complete control over the economy.

• No private property will exist


• Every person will work for the welfare of all

• “From each according to his ability, to each


according to his need”
Economy

Government

Communism
“You have two cows. Your neighbors help you take care of
them, and everyone shares the milk.”
Imagine – John Lennon
Imagine
Cartoon Ronald Reagan implements Socialism - YouTube

cap vs soc vs comm


Time for the Quiz
Ownership of Property?
- PUBLIC/GOV’T
- PRIVATE/INDIVIDUAL
- BOTH

• Capitalism-

• Socialism-

• Communism-
Principle of Operation?
• FREE ENTERPRISE/COMPETITON
• FAIR DISTRIBUTION OF WEALTH
• CENTRAL/GOV’T CONTROL

• Capitalism-

• Socialism –

• Communism-
Choice of Work?
– OPEN/FREE CHOICE
– REGULATED

• Capitalism-

• Socialism –

• Communism-
Government Involvement?
• GOV’T OWNS BASIC INDUSTRIES/PROVIDES SOCIALSERVICES
• GOV’T OWNS ALL INSUSTRIES
• GOV’T INVOLVEMENT KEPT TO A MINIMUM

• Capitalism-

• Socialism –

• Communism-
Amount of Competition?
– COMPETITON IS LIMITED
– COMPETTITON IS PROMOTED
– THERE IS NO COMPETTITON

• Capitalism-

• Socialism –

• Communism-
Promoters of Economic System?
• Karl Marx
• Adam Smith

• Capitalism

• Socialism & Communism


Capitalism
• Pro
– Rewards individual success
– Individual success leads to common good

• Con
– Competition leads to winners and losers
– Not all succeed
Socialism
• Pro
– All share equally the benefits of production
– No winners and losers

• Con
– No competition - efficiency goes down
– High taxes
Communism
• Pro
– Full employment
– citizens get what they need

• Con
– Gov’t decides rewards
– Few luxuries
Article
• Cuba Pins Hopes on New Farms Run For Profit,
Washington post, 2009
Article
• Cuba To Cut State Workers in Tilt
Towards Free Market, Sept, 2010

– Market-oriented, subsides, privatization,


private sector
– % of gov’t workers in Cuba?

– What obstacles do Cubans who go in to


business face?