Every Society Must Answer 3 Questions:

What goods will be produced?How will the goods be produced?For whom will the goods be produced?Economic System: the way in which a society

decides to answer the 3 questions above- in the end, will government, the people or some kind of a mix of both decide?

The Rock, Paper and Scissors Game and Marxist Theory

Economic Systems

Market economy : capitalismCommand economy: socialism, communismTraditional Economy (Ex: Chad, Haiti, Rwanda)Mixed economy-mixed w/ elements of both socialism

and market

Market Economies-some are more free than others (Capitalism)

Resources are owned and controlled by the peopleEconomic decisions are made by the people competing to

earn profits Individual freedom is considered very important Economic decisions are made by the basic principles of

supply and demand Profit is the motive for increasing workThere are many economic freedoms There is competition among businesses Competition determines price which increase the quality of

the product More freedom of thought, religion and speech

Capitalists (Free market economy)

All countries that practice capitalism are actually mixed economies and include some socialist elements, but you can say that the following countries are just a few of many who lean more more capitalist:

1. The United States2. Great Britain3. South Africa4. Israel5. The Dominican Republic6. Germany7. Japan8. South Korea

Which countries are the most capitalist?

http://images.flatworldknowledge.com/barkan/barkan-fig13_001.jpg

Socialism

Government owns the businessesGoal: to redistribute wealth between rich and poorFinal Goal eventually: classless society-no rich or

poor (economic equality)

Socialism-2 types

1. Marxist-Leninism (Marxist Socialism)-most extreme form-also called communism

2. European-Style Socialism

Marxist-Leninism Socialism The government makes all decisions and determines how resources

will be used No freedom of speech, press or thought There is no competition Businesses are not run to create a profit Called Communism in countries that use it Healthcare is free and controlled by the gov’t Consumers have no choices in the market place Factories are concerned with quotas Shortages are common because of poorly run factories and farms The government dictates the job in which you work The government sets the prices of all goods and services Religion is either forbidden or heavily monitored by the govt Based on the writings of Karl Marx and Vladimir Lenin

European-Style SocialismThe government makes many decisions and determines how

much of the resources will be used Allows some capitalism High tax rates (50% or more) on the richSome individual freedomSome competition Businesses run to create a profit, but heavily regulated by the

GovtCalled Democratic Socialism in counties that use itHealthcare is usually free and controlled by the gov’t-heavily

funded by taxes on the richConsumers have fewer choices in the market place The government sets some of the prices of goods and services

like the same gas price at all gas stations across the country

European-Style Socialists (command economy)

1. France2. Russia3. Spain4. Germany5. Canada6. Portugal7. Argentina8. Brazil

Communists-most extreme socialism- “Marxist/Leninist Socialism”

There has never been a purely communist country as Karl Marx described with no government and a completely classless society

The following countries are ruled by Communist party and call themselves Communists, but they are actually extreme Marxist socialist: (only 18 years ago there were over 20 countries)

1. Cuba2. China3. North Korea4. Vietnam5. Laos

Mixed Economies-some lean more free market capitalist and some lean more

command or socialistGovernment and individuals share the decision making

process Government guides and regulates production of goods and

services offered Individuals own means of production Protects consumers and workers from unfair policies Most effective economy for providing goods and servicesTechnically, most of world’s economies fall into this categorySome are mixed, but more socialist…some are more socialist