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

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Traditional- Relies on

habit, ritual, & the family. 

Market- Individuals own

the factors of production. 

Command- Government

owns the factors of production. 

Mixed- a mixture of 2 or

3 of the above types = the “isms” Capitalism, Communism, Socialism Video Link – 3:00 Min

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The government keeps the prices of foods low so that children can get food that will be beneficial to them.

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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

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Unequal distribution of Wealth

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Long Hours

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Unsafe Working Conditions

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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.

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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

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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 Exploration the Age of  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.

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You pay for all of your medical care, but sometimes you can pick whatever doctor you want to see

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You can open your own business, but there is no guaranteed that it will succeed and you must pay for all marketing costs

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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.  Who: The Communist Manifesto – Marx argued that the “Haves” (people with money) were taking advantage of the “Have-nots” (the working class). He felt that eventually the workers would revolt and take control of the factories.

COMMUNISM Pure Communism

You have two cows. Your neighbors help you take care of them, and you all share the milk.

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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.

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You are guaranteed a job by the government that will pay you enough to provide for your family

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The house you live in will be provided to you, however you might not live where you want to

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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.

I.

Create colored poster of your economic system that includes: Founder / Person most associated with the system II.

III.

IV.

V.

VI.

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 non specified gender.

 Surrealism - You have two giraffes. The government requires you to take harmonica lessons.

Karl Marx

Command Communism… Cuba N. Korea Soviet Union Democratic Socialism … Constitution Human rights Gov’t owns FOP’s Can vote for more than one party France Canada

Adam Smith

Market Capitalism… Democracy USA, Hong Kong, Taiwan