CAPITALISM Economic system based on - private ownership of property and the means of prod -the investment of $ in bus ventures to make a profit -businesses compete w/one another for consumers $ -each business tries to provide goods and services that are better and less expensive than their competition -progress results when individuals follow their own self-interests -government should not interfere in the economy-laissez-faire -capital belongs to individuals who are free to do what they wish with it -based on the economic laws of supply and demand *when enough people want something producers make it b/c they want to make a profit *buyers and sellers are free to exchange goods and services at prices determined by supply and demand -when the amount DEMANDED is greater than the amount SUPPLIED prices tend to go up -when the amount SUPPLIED is greater than the amount DEMANDED prices tend to go down -competition--> progress -people have control over their own businesses SOCIALISM Economic system in which the means of production and key infrastructure are owned by the public/society aka the government & operate for the welfare of all -everyone within society should benefit from capitalism as much as possible -providing for the needs of all members of society will ultimately benefit society -allows for capitalism as long as it’s controlled -government actively regulates the economy >focuses on working within capitalism rather than trying to eliminate classes all together >focuses on regulation and taxation rather than overthrowing the established government -relies on government planning not the free market to distribute resources -offers lots of public services funded by taxpayer money Government provides services such as -education-healthcare-free or low cost housing and transportation Often have social welfare programs to aid the --unemployed--disabled--elderly the government should act to protect workers and consumers -rather than competition goods should be distributed according to each person’s needs Should create more Social equality-public education/housing Economic equality-less disparity between rich and poor -believes cooperation is better than competition Negatives-no incentive for working hard/new ideas -the government is often inefficient in running businesses COMMUNISM Economic & political system in which all the means of production are owned by the people -private property does not exist -all goods and services are shared equally -wealth would be redistributed -classes and private property would cease to exist -history is shaped by economic forces-the way goods are produced and distributed -class struggle has always existed between the haves-bourgeoisie capitalists have nots-the proletariat-the working class -poverty and desperation will drive the masses of workers to >seize control of the government and the means of production >destroy the capitalist system >establish a dictatorship of the proletariat -after the dictatorship of the proletariat occurs >all property and means of production will be owned by the people >all goods and services are shared equally >the state withers away and a classless society emerges Negatives In reality, communism brought about a system of government in which the state is led by a small elite group which -controlled all economic and political life -exercised authoritarian control over the people -no incentive for working hard/new ideas