Economic Systems:Capitalism vs Communism

Capitalism: What is it?

economic system

investing capital--anything of value--with the specific purpose of making a profit

production is based on what people want

wrote The Wealth of Nationsfair competition leads to prosperitylaissez-faire“invisible hand” = market forces

importance of consumerism and expansion

Adam Smith

Role of the gov. in capitalism• in theory, it is laissez-faire

• in practice....

• subsidies and tax breaks

• stimulus plan

• wrote The Origins of Species by Means of Natural Selection

• survival of the “fittest”

• connection to capitalism

Charles Darwin

Critique of capitalism: socialism and communism

• capitalism leads to suffering

• everyone should be equal

• public should own the means of production

• cooperation over competition

• production is based on what people need

Communism

• “Workers of the world unite!”

• history is based on class struggle

• opposed surplus value

• opposed religion and exploitation

• supported free education for children

What’s the difference between socialism & communism?

• private property

• social classes

• stage of development

• true communism has NEVER existed