Social - Pertaining to the interaction of people.

Cultural - Pertaining to social customs of a given group of people.

Commodity - Valued resource: workforce, space, raw materials, information, energy.

Economics - A system of acquiring and transferring commodities.

Capitalism - An economic system based on "survival of the fittest".

Communism - An economic system based on "you put in your fair share; you get your fair
share"
.
Socialism - An economic system based on "you get a share regardless of your contribution".
Capitalism

Capitalism is based on the Darwenian concept of survival of the fittest. several Western countries
use a form of capitalism at the core of their economies. Scaled-down examples of capitalism are
flea markets, bazzars and black market trading.
Properties of Capitalism

Social/cultural rules and political laws define the environment.

Supply and demand provide environmental pressures.

Those that best "fit" that environment survive and maintain the rules/laws.

Those that can't/don't thrive in the system, and otherwise lack participation, are
culled.
Successful capitalistic systems tend to be open and competitive.

A healthy capitalistic system results in economic incentives.

Advantages of Capitalism

●Capitalism is an internally stable economic system, in that it is consistent with human behavior.
People understand that life is not fair - there's no "free lunch". You have to work to survive, and only
the lucky who manage to thrive within the socio-economic matrix make it to the top. As long as
there is a belief/hope that one can advance in the system, there is an incentive to participate.

●Capitalism is also externally stable, in that survival in a capitalistic system requires innovation and
flexibilty to keep up with the changes in supply and demand. Such a system is generally prepared
to deal with the influx of competition from external sources.

Large populations are likely to be diverse, which is beneficial to healthy capitalistic systems.
●

●Large, diversified societies tend to gravitate towards heirarchical social systems; capitalism easily
adapts to such structures.
Disadvantages of Capitalism

●It is not acceptable in most modern societies to allow portions of their population to be "culled".
●Those in power tend to construct rules that limit diversity and competition, thereby weakening

the flexibility and strength of the system as a whole.

●Vast imbalances in opportunity encourages revolt, which disrupts and destablizes the system.
Remedies for Capitalism

Create secondary social mechanisms to support those that do not "fit" in the socio-economic
system.
Encourage the inclusion of all members of the population to compete, and open up competition to
external markets, in order to maximize diversity and flexibility.
Educate the elite to the systemic benefits of resource distribution, and encourage incentives for
such distribution.
Communism

Communism is based on the concept of shared effort and shared resources. No existent nation
practices pure communism, and I know of no self-sustaining country that uses communism as a
basis for their economy. Successful, scaled-down examples of communism include early Christian
congregations, kibbutzes and cooperatives.
Properties of Communism

All members of the economy share both work and benefits.

Those that do not provide their share of effort and resources to the system are culled.
Successful communistic systems tend to be small and homogeneous.
A healthy communistic system results in a cooperative society.
Advantages of Communism

Communism is an internally stable economic system, in that those that participate benefit and
those that don't are culled - creating an incentive to participate.
Communism requires common goals and agreed upon rules/laws to allocate responsibilities and
resources. If successful, this leads to a spirit of sharing - which builds stronger social communities,
creating a stabler economy.
Due to their sense of cooperation, healthy communistic systems are very efficient at distributing
resources within their localized areas - particularly in times of need.
Disadvantages of Communism

Large or geographically broad populations tend to be diverse, making it difficult to maintain a

common goal or set of rules for shared effort and resources.
Large, diversified societies tend to gravitate towards systems of heirarchy, reducing the
perception of fair distribution of work and resources - which can destablize a communistic society.
Allowing an influx external culture increases the likelyhood of destablizing the homogeneity of the
society. As such, communistic systems tend to block out external cultures and exclude outside
competition, weakening the system's ability to learn from, or compete with, external economies.
Remedies for Communism

Keep the society small and homogeneous, and minimize hierarchies.

Block out external cultural influences and control external trade.
Socialism

Socialism is based on the concept of everyone gets their share. This economic system exists in those environments
where resources are plentiful, or populations are extremely small (such as family units).
Properties of Socialism

All members of the economy share benefits, regardless of their economic value to the system.
Succesful socialistic systems depend on sufficient resources for the entire population.
A healthy socialistic system results in non-economic productivity.
Advantages of Socialism

In environments with plentiful resources, socialism provides all members with their survival needs, creating a stable
social environment.
Members that cannot participate economically - due to disabilities, age, or periods of poor health - can still impart
wisdom, emotional support and continuity of experience to the system.
Freedom from work provides opportunity for some societal members to explore non-economically-productive
pursuits, such as pure science, math and non-popular arts.
Disadvantages of Socialism

Since there is no culling and no economic advantage to working harder, socialistic systems provide no inherent
incentive to participate. This makes socialism internally unstable.
Due to a lack of incentives, socialistic systems tend not to be competitive, making them externally unstable.
In times of plenty, immigrants are drawn to the free resources offered by socialistic systems, while potentially adding
nothing economically productive.
In times of scarcity, resentment of non-economically-productive members of society increases, causing a
destabilizing effect on the society and economy.
Remedies for Socialism

Avoid scarcity of resources.

Keep out immigrants.
Economic System Capitalism Socialism

Equity Capitalism is Socialism is concerned with redistributing

unconcerned resources from the rich to the poor. This is to
about equity. It is ensure everyone has both equal opportunities
argued that and equal outcomes.
inequality is
essential to
encourage
innovation and
economic
development

Ownership Private The State will own and control the main means of
businesses will be production. In some models of socialism,
owned by private ownership would not be by the government but
individuals worker cooperatives.
Efficiency It is argued that the profit
incentive encourages
firms to be more
efficient, cut costs and
innovate new products
that people want
Unemployment In capitalist economic
systems, the state
doesn't directly provide
jobs. Therefore in times
of recession,
unemployment in
capitalist economic
systems can rise to very
high levels
Price Controls Prices are determined by
market forces. Firms with
monopoly power may be
able to exploit their
position and charge
much higher prices.
It is argued that state
ownership often leads to
inefficiency because
workers and managers
lack any incentive to cut
costs
Employment is often
directed by the state.
therefore, the state can
provide full employment
even if workers are not
doing anything particularly
essential.
In a state managed
economy prices are
usually set by the
government this can lead
to shortages and surpluses