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1. Market Economy and its development
2.The three basic economic questions and
Factors of Production
3. Competition and Incentive in Market
Economies
4. Advantages of Great Britain and the U.S. as
Industrial Leaders
5. Economic Systems/Theories
(Capitalism/Socialism/Communism)
6. Scientific Management and Production
7. Role of Institutions in Establishing Rules
8. Positive/Negative Consequences of I.R.
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A CAPITALIST BELIEVES………….
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Money invested in business will create goods and
services that are desired, which will then, in turn,
create wealth for all of society
Gov’t should allow free trade to take place within
the world market, thereby fostering a prosperous
economy (Ensure “Competition”)
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Gov’t regulations and favors interfered with
overall economic growth
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Natural Laws should govern the economy (people
acting in their self-interest
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Adam Smith
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Thomas Malthus
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David Ricardo
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Economic Liberty
guaranteed progress
(“invisible hand”)
Population increases
faster than food
supply (most people
destined to be poor)
Wages would
decrease as more
people enter
workforce (due to
supply of labor)
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A SOCIALISTS BELIEVES……….
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Jeremy Bentham/John
Stuart Mill
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Charles Fourier
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Gov’t should
promote greatest
good for greatest
number of people
Factors of Production
owned by the
“public” and operate
for welfare of all
Gov’t should plan
economy to promote
equality and abolish
poverty
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A COMMUNIST BELIEVES………….
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THIS IS DIFFERENT FROM THE SOCIALISTS……
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Freeman and slave, patrician and plebian,
lord and serf, guild master and journeyman,
in a word oppressor and oppressed, stood in
constant opposition to one another, carried
on and uninterrupted, now hidden, now open
fight, a fight that each time ended, either in
revolutionary reconstitution of society at
large, or in the common ruin of contending
classes….” The proletarians have nothing to
lose but their chains. They have a world to
win. Workingmen of all countries, unite.”
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Karl Marx
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Friedrich Engels
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Societies have been divided
in the “haves” v. the “havenots
(Bourgeiosie v.
Proletariat)
Workers would overthrow
the owners
Workers sharing in profits
would bring economic
equality for all
State (or gov’t) would
disappear as classless
society developed
No private property would
exist under pure
communism