Key Terms – Economy (2)/Politics

Traditional Economy Bartering Command Economy Market Economy Politics Monarchy Republic Democracy Natural Rights

Rule of Law Totalitarian

Government Oligarchy Aristocracy

Traditional Economies and Bartering

Traditional economy → economy in which families and communities produce the necessities of daily life and trade them among each other

Commonly involves bartering, which is the trading of one set of goods and services for another

Command Economy

Command economy → economic system in which the government dictates what is sold, how much of it is sold, and how much it sells for.

It is commonly referred to as a 'planned economy' since the government usually sets up cycles for its economic activity

Market Economy

Market economy → economy in which the consumers dictate what is produced, how much is produced, and its price.

Commonly called the capitalist system and it tends to fluctuate greatly according to consumer trends.

Politics

Politics → the art or science of government

Government → system of rule by which people subscribe.

Many different groups of people have experimented with different types of government systems. Some will fail while others succeed.

Government Systems

There have been many different types of government systems since the first few were created more than 5,000 years ago in Mesopotamia.

Governments change in accordance with the needs of their citizens.

Monarchy

Monarchy → system of government which is ruled by one individual, usually a king or a queen.

Monarchies were the first government systems to exist in large societies.

Republic

Republic → system of government in which citizens select individuals as representatives of their political stances in government

The republic is a form of government that was made popular by the Romans and still in use today.

Democracy

Democracy → system of government in which many of the major political decisions and positions are decided by the governed

Democracies were established by the Greeks initially and now exist in partial fashions in the world today

Natural Rights

Natural Rights → rights and civil liberties that one is born with and are guaranteed by constitutions and bills of rights today

Initially, governments did not protect human rights due to the rule of monarchs but over time civil liberties would be protected

The Rule of Law

Upon choosing to live within a civilization and accepting its government, citizens forfeit a measure of their freedom to live under the protection of the rule of law.

Rule of law → protection of one's rights under the legal protection of a constitution or set of laws.

Totalitarian Government

During the early 20th Century, many parts of the world came under the rule of totalitarian governments.

Totalitarian governments → governments in which the rulers have complete control over the lives of their citizens and the economic systems of their countries.

Examples include Adolf Hitler, Josef Stalin and Benito Mussolini.

Oligarchies and Aristocracies

Oligarchy → rule by a few, usually a landholding elite or group of elders

Some early governments spread power across a few individuals to prevent the rule of one which could damage one's country

Aristocracy → rule by the wealthy

Early ancient governments were sometimes ruled by the wealthy since the wealthy claimed that their money was what fueled the economies and governments of their countries.