Transcript Economic Systems

Has to do with jobs, money, products, and services
What kind of economic system a country has depends
on who makes the decisions about jobs, money,
products, and services.
Economic_Systems__Regulating_the_Exchange_of_Goods_and_Services.asf
Traditional- Relies on
habit, ritual, & the family.
Market- Individuals own
the factors of production.
Command- Government Capitalism,
Communism,
owns the factors of
Socialism
production.
Mixed- a mixture of 2 or
3 of the above types =
the “isms”
Video Link – 3:00 Min
The government keeps the
prices of foods low so that
children can get food that
will be beneficial to them.
Command
Their parents buy most of the
groceries from the
government stores, but they
may sell other crops or
products they produce in the
market place.
Market
Their parents buy most of the
groceries from the
government stores, but they
may sell other crops or
products they produce in the
market place.
Market
Their parents buy most of the
groceries from the
government stores, but they
may sell other crops or
products they produce in the
market place.
Mixed
For many years the city had a
good automobile industry. The
owners of the company did many
studies to find out what people
wanted. Then they produced
what they believed customers
would buy.
Market
HISTORICAL ORIGINS
OF
ECONOMIC SYSTEMS
Global trade increases due to
Columbian Exchange & Industrial
Revolution
Gap between rich and poor widens
Business leaders want governments to
stay out of economic affairs
Reformers believe governments should
improve conditions for the poor
Unequal distribution of
Wealth
Long Hours
Unsafe Working
Conditions
No Worker’s Compensation
An economic system in which the factors of
production are owned by the public. All major
industries owned by the government.
Basic Ideas:
All major means of
production are owned by
the government and run
for the good of the
people
Small businesses can be
privately owned but major
businesses are owned by
the government
Mixed Economy
Modern Examples: France,
Canada and Britain
Pure Socialism
You have two
cows. The
government
takes them and
puts them in a
barn with
everyone else’s
cows. You have
to take care of
all the cows.
The government
gives you all the
milk you need.
 Free medical care,
but you are not
allowed to pick your
doctor
 Leaders at all levels
of government are
subject to recall and
they are only paid an
average workers
wage
 Prices of products
are low, but you will
have very few
choices of different
products
 Bureaucratic
Socialism
 Your cows are cared
for by ex-chicken
farmers. You have
to take care of the
chickens the
government took
from the chicken
farmers. The
government gives
you as much milk
and eggs the
regulations say you
should need.
An economic system based on
individuals owning the factors of
production and all major industries.
Private property, profit motive
When:During the Age of
Exploration
Reason:Began as a result
of the Columbian Exchange
Who: Adam Smith – first
to describe the basic ideas
in Wealth of Nations
Type: Market Economy
(Mixed)
Modern Examples: USA
and Japan
Pure
Capitalism
You have
two cows.
You sell one
and buy a
bull.
 Basic Ideas
 Law of Supply and Demand-real
price is set by consumers
 Individuals own the factors of
production
 Law of Competition – to sell you
must reduce price or raise
quality when there is competition
 Laissez-faire Capitalism –
 “hands-off” or let the people
do as they choose
 Private ownership of property,
industry, and business. People
not the government answer the
four basic economic questions
 No/Few government regulations
Capitalism
You don’t have
any cows. The
bank will not
lend you
money to buy
cows, because
you don’t have
any cows to
put up as
collateral.
You pay for all of your medical
care, but sometimes you can pick
whatever doctor you want to see
You can open your own business, but
there is no guaranteed that it will
succeed and you must pay for all
marketing costs
You have multiple options of all
types of products but prices may be
a bit higher
An economic system based on all major
industry and factors of production being
owned by the government.
Private property DOES NOT exist, and all goods
and services are shared equally.
 When: Begins in 1800
 Reason: The reforms of the
Industrial Revolution sparked
Socialist Karl Marx to
evaluate the inequalities that
were going on.
COMMUNISM
Pure
Communism
You have two
cows. Your
neighbors
 Who: The Communist
help you take
Manifesto – Marx argued that
care of them,
the “Haves” (people with
money) were taking advantage and you all
of the “Have-nots” (the
share the
working class). He felt that
milk.
eventually the workers would
revolt and take control of the
Basic Ideas
All Factors of production
owned by the people
No private property
All goods and services are
shared by the people
Extreme government
regulations
 Command Economy
Modern Examples: China
and North Korea
Real World
Communism
You share two cows
with your
neighbors. You
and your
neighbors bicker
about who has the
most “ability” and
who has the most
“need”.
Meanwhile, no one
works, no one gets
any milk, and the
cows drop dead of
starvation.
 Russian Communism - You have two cows. You have
to take care of them, but the government takes all the
milk. You steal back as much milk as you can and sell
it on the black market.
 Perestroika - You have two cows. You have to take
care of them, but the Mafia takes all the milk. You
steal back as much milk as you can and sell it on the
“free” market.
 Cambodian Communism - You have two cows. The
government takes both and shoots you.
 You are guaranteed a job by the government
that will pay you enough to provide for your
family
 The house you live in will be provided to you,
however you might not live where you want to
 You don’t have to go to church on Sunday’s or
any other day of the week, as you are not
allowed to have a religion
 In your groups, you will do the
following:
1. Create colored poster of your
economic system that includes:
I.
II.
III.
IV.
V.
VI.
Founder / Person most associated
with the system
Definition of the economic system /
Basic ideas behind it
Type of economy (mixed, market,
command, traditional)
Modern Examples
(country/countries)
Picture/Illustration representing your
economic system
Slogan representing your economic
system
Be
creative
and
appropriate
WORLD IDEOLOGIES AS EXPLAINED BY
REFERENCE TO COWS
Feudalism - You have two cows. Your lord
takes some of the milk.
 Representative Democracy - You have two
cows. Your neighbors pick someone to tell you
who gets the milk.
 British Democracy - You have two cows. You
feed them sheeps’ brains and they go mad.
The government doesn’t do anything.
 Pure Democracy - You have two cows. Your
neighbors decide who gets the milk.

 Bureaucracy - You have two cows. At first the
government regulates what you can feed them
and when you can milk them. Then it pays you
not to milk them. Then it takes both, shoots
one, milks the other and pours the milk down
the drain. Then it requires you to fill out forms
accounting for the missing cows.
 Pure Anarchy-You have two cows. Either you
sell the milk at a fair price or your neighbors
try to take the cows and kill you.
 Militarism -You have two cows. The
government takes both and drafts you.
 Totalitarianism - You have two cows. The
government takes them and denies they ever
existed. Milk is banned.
 Fascism - You have two cows. The
government takes both, hires you to take care
of them, and sells you the milk.
 Political Correctness - You are associated
with (the concept of “ownership” is a symbol
of the male-centered, war mongering,
intolerant past) two differently-aged (but no
less valuable to society) bovines of nonspecified gender.
 Surrealism - You have two giraffes. The
government requires you to take harmonica
lessons.
Democratic
Socialism …
Constitution
Human rights
Karl Marx
Command
Gov’t owns
FOP’s
Can vote for
more than one
party
Adam Smith
Market
Communism…
France
Capitalism…
Cuba
Canada
Democracy
N. Korea
Soviet Union
USA, Hong
Kong,
Taiwan