Capitalism vs Socialism

Capitalism

Page 05 Notes

By Mister Benson

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Multiple Choice

Privately owned means...

• Owned by a select group of people who claim ownership.

• Owned by all of the members of an organization.

• Shared between their workers and owners.

• Something that is possessed in secret.

Private property rights are central to a capitalist economy, its execution, and its legal defenses.

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Capitalism is built on the free exchange of goods and services between different parties, and nobody can rightfully trade property they do not own.​

Private Property

(aka CAPITAL)​

Open Ended

What are three important pieces of information about capitalism you learned from the video on the previous slide?

Poll

How do you feel about capitalism so far?

• I am pro-capitalism

• I am apathetic

• I am anti-capitalism

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Open Ended

Summarize the previous slide in 1-2 sentences

Profit

Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.

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​Profit describes the amount of money gained from a business when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Any profits earned funnel back to business owners, who choose to either pocket the cash or reinvest it back into the business. Profit is calculated as total revenue minus total expenses.

Competition

Competition is the other vital attribute of a capitalist system. Private businesses compete to provide consumers with goods and services that are better, faster, and cheaper.

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Competition in this context is often equated with rivalry. Competitive rivalry between firms can occur when there are two firms or many firms. This rivalry may take place in terms of price, quality, service or combinations of these and other factors which customers may value.

Competition is viewed as an important process by which firms are forced to become efficient and offer greater choice of products and services at lower prices. It gives rise to increased consumer welfare and allocative efficiency. It includes the concept of "dynamic efficiency" by which firms engage in innovation and foster technological change and progress.

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Multiple Select

Which of these two items are considered to be the cornerstones of capitalism? (SELECT TWO)

• Profit

• Competition

• Labor

• Taking care of people

What Is the Tragedy of the Commons? The tragedy of the commons refers to a situation in which individuals with access to a shared resource (also called a common) act in their own interest and, in doing so, ultimately deplete the resource

The Tragedy of the Commons

Multiple Choice

What is the problem with the Tragedy of the Commons?

• It means people will use up all of our natural resources if left unchecked.

• It means people will not pay their employers a fair wage.

• It means that people who run businesses do not make enough money to keep going.

• Something to do with cows? I'm so lazy that I couldn't be bothered to watch a 1 minute video :(