Review Economic Systems

Let's watch this video to help us understand the concept.

https://www.youtube.com/watch?v=2Wp-diDRVKI

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Supply and Demand

Socialism

Socialism is economic system in which government plays a major role in the economy but does not completely control
it.

●

Under socialism, the government determines the use of resources, distributes products and wages, and
provides extensive social services for its people.
a.

E.g. education, welfare, healthcare, etc.

●

The goal of socialism is the equal distribution of wealth.

Multiple Choice

Central government provides public services and controls the much of the economy, but citizens enjoy basic freedoms and have private ownership of goods.

• Socialism

• Capitalism

• Mixed Market Economy

Match

Match the following

• An economic system in which a country's trade and industry are controlled by private owners for profit

• An economic system in which people have freedom to own and run businesses, but government regulates industry to ensure work safety, minimum wage, etc.

• Central government provides public services and controls the much of the economy, but citizens enjoy basic freedoms and have private ownership of goods.

Capitalism

Mixed Market Economy

Socialism

• Capitalism

• Mixed Market Economy

• Socialism

List Arguments for and Against Socialism

A large portion of American population finds socialism to be distasteful.

What about the development of the American economic system might
account for this strong feeling?

Is socialism and democracy compatible?

Democratic Socialism

Democratic socialists believe in political democracy but want government to
regulate the distribution of wealth.

●Under democratic socialism, citizens have basic democratic rights, but the
government makes economic decisions and may own key industries.

Many European countries fall under this category.

Communism

Under communism, government decides how much to produce, what to
produce, and how to distribute goods and services.

●A communist system is called a command economy because government
makes the decisions for the nation.

●In a purely communist country, there is no private property— the state
owns the land, natural resources, industry, banks, and transportation
facilities and also controls mass communication.

Karl Marx

German philosopher who wrote about the
suffering created by industrialization.

●It created divisions between the
bourgeoisie (capitalists who own the
means of production) and the
proletariat (workers who produced
the goods).

Believed the workers would revolt against
capitalists and establish first a socialist
system and then a communist system.

Marxist Communism

●There would be only one class, the working class

●All property would be held in common and there would be no need for
government.

What are the major problems with this ideology?