Download - COMPARING ECONOMIC SYSTEMS Socialism … Both an economic system and a political way of thinking
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COMPARING ECONOMIC SYSTEMS
• Socialism …
• Both an economic system and a political way of thinking
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• What does it say or preach?
• A nation’s wealth should be distributed to everyone in a fair way. How can this be done?
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• 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
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Gov’t Econ
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“ 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.”
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• Based on the idea of cooperation and social responsibility
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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?
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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.
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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?
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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
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History
• Came about after the Industrial Revolution
• The Rich got richer and the poor…….
• Great suffering by the workers
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In industrialized nations…
Population is divided between the:
•Bourgeoisie – capitalist who own the means of production
•Proletariat- workers who produce the goods
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• Karl Marx began to criticize capitalism
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• Two thoughts– Change would come through a violent and
bloody revolution– Change would come through peaceful
means
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• Socialist Changes
Und capitalist society vill have to go through a series of changes
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• Nationalization
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• The Welfare State (Social Programs)
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• High Taxation
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• Command Economy
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Socialists Countries
• Northern Europe– Sweden– Finland
• France
• Some south American Countries– Venezuela
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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”
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Economy
Government
Communism
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“You have two cows. Your neighbors help you take care of them, and everyone shares the milk.”
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Imagine – John Lennon
Imagine
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Cartoon Ronald Reagan implements Socialism - YouTube
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Time for the Quiz
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Ownership of Property?
- PUBLIC/GOV’T
- PRIVATE/INDIVIDUAL
- BOTH
• Capitalism-
• Socialism-
• Communism-
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Principle of Operation?
• FREE ENTERPRISE/COMPETITON• FAIR DISTRIBUTION OF WEALTH• CENTRAL/GOV’T CONTROL
• Capitalism-
• Socialism –
• Communism-
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Choice of Work?– OPEN/FREE CHOICE– REGULATED
• Capitalism-
• Socialism –
• Communism-
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Government Involvement?• GOV’T OWNS BASIC INDUSTRIES/PROVIDES SOCIALSERVICES
• GOV’T OWNS ALL INSUSTRIES
• GOV’T INVOLVEMENT KEPT TO A MINIMUM
• Capitalism-
• Socialism –
• Communism-
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Amount of Competition?– COMPETITON IS LIMITED– COMPETTITON IS PROMOTED– THERE IS NO COMPETTITON
• Capitalism-
• Socialism –
• Communism-
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Promoters of Economic System?
• Karl Marx
• Adam Smith
• Capitalism
• Socialism & Communism
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Capitalism
• Pro– Rewards individual success– Individual success leads to common good
• Con– Competition leads to winners and losers– Not all succeed
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Socialism
• Pro– All share equally the benefits of production– No winners and losers
• Con– No competition - efficiency goes down– High taxes
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Communism
• Pro– Full employment– citizens get what they need
• Con– Gov’t decides rewards– Few luxuries
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Article
• Cuba Pins Hopes on New Farms Run For Profit, Washington post, 2009
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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?