SQ 11. What is the difference between
capitalism,
socialism, and communism?
Unit Essential Question(s): ​Do the benefits of innovation outweigh the costs? For whom? ​Link to Unit
Supporting Question(s): ​What is the difference between capitalism, socialism, and communism?
Objective(s):
● ​Define ​capitalism, socialism, and communism.
● ​Explain​ ​the similarities and differences between capitalism, socialism, and communism​.
Vocabulary
Word/Phrase
(part of speech)
Definition
Adam Smith
(1723-1790) a Scottish economist who wrote The Wealth of Nations and who supported laissez faire policies and whose
ideas support capitalism
capitalism
an economic system in which land, factories, and other resources are owned by individuals instead of the government. In
this system, the prices of things we buy are decided by the people who sell them and not by the government.
classless society
a place where everyone is equal in wealth
communism
a system of government derived from the writings of Karl Marx and Friedrich Engels in which all factories, farms, and
other valuable things are owned and controlled by the government
Communist Manifesto
(1848) a pamphlet, written by Karl Marx and Friedrich Engels in which the principles of modern communism are outlined
competition
the act of striving to gain or win something by defeating or establishing superiority over others
cooperation
the act of working together
difference
something that makes two or more things not alike
distribute
to divide into parts and give out to each person or group
U​NIT 10.3| Causes and Effects of the Industrial Revolution| ​SQ 11. What is the difference between capitalism, socialism, and communism?
earn
to receive money for work that you have done
economic system
a set of beliefs and practices related to the use of a country or region's wealth and resources
Friedrich Engels
(1820-1895) a nineteenth century German political philosopher who wrote The Condition of the Working Class in England
in 1844 and co-wrote the Communist Manifesto with Karl Marx
healthcare
the set of services available in a society to maintain health and prevent and treat disease and injury
housing
living places
income
money you get from work you do or property you own
Karl Marx
(1818-1883) a German political philosopher and economist who founded modern socialism and wrote The
Communist Manifesto with Friedrich Engels
lower class
a social group that is the lowest in society, usually based on wealth
middle class
a social group between the upper class and working class, usually made up of professional and business workers and
their​ ​families
profit
the amount of money made by a business that is more than the amount of money used to create the business
redistribute
to take something back that has been divided into parts and give out, then redo the process in a different way
self-interest
what is best for oneself
similarity
something that one or more things have in common
social class
groupings of people in a society usually based on wealth, religion, ethnicity, or other factors
socialism
a political and economic theory that advocates for the people as a whole rather than private individuals to own
and​ ​operate the means of production
upper class
the wealthiest social group in society
Wealth of Nations (The)
(1776) book written by Adam Smith in which he explains his observations of the early Industrial Revolution and his theories
on what makes the best economy. This book provides the basic theory of capitalism
U​NIT 10.3| Causes and Effects of the Industrial Revolution| ​SQ 11. What is the difference between capitalism, socialism, and communism?
Objective:
What is the difference between capitalism, socialism, and
communism? ​Objectives:
● ​Define​ ​capitalism, socialism, and communism.
● ​Explain​ ​the similarities and differences between capitalism, socialism, and communism.
Introduction: What do you think?
➡​Directions: ​Complete the chart below. Compare your responses with your partner.
Agree
Disagree
1. The government should tell business owners what they can sell.
Disagree
2. The government should act to limit how much businesses can earn
each year.
Disagree
3. The government should decide what a business does with its profits.
Disagree
4. Everyone deserves to have healthcare and housing regardless of
their income.
Partner’s response
Agree
5. There should be social classes such as upper class, middle class, and
lower class.
Disagree
6. Every person should have the exact same income, housing, healthcare, etc.
Disagree
➡​Directions: (Ignore)​Select one statement above. Using the ​LIST microroutine​, identify similarities and differences between your response and the response
of your partner. Explain the similarity or difference you identified using evidence from your conversations with one another.
U​NIT 10.3| Causes and Effects of the Industrial Revolution| ​SQ 11. What is the difference between capitalism, socialism, and communism?
➡​Directions: ​Read the table below and respond to the questions.
An ​economic system ​regulates how a society distributes resources and trade goods. During the Industrial Revolution, three new ideas of economic systems
emerged:
1. Capitalism 2. Socialism 3. Communism
These economic systems propose different ways to organize how resources are distributed and goods are traded.
Capitalism
Socialism
Communism
Goal
Individuals ​should pursue their own
self-interest ​by working to earn
individual ​profit​.
We should create a more ​equal society ​by
working for the ​common good ​to
redistribute resources based on need.
We should create a ​classless society ​by fighting
to abolish class distinctions so that we can
distribute resources equally.
Belief
Competition ​improves society.
Cooperation ​improves society.
Complete equality ​improves society.
Social Classes
Yes
Some
No
Who owns
businesses?
Individuals
The government operates and owns
major industries, but small businesses
are allowed.
The government operates and owns all
industries. No small businesses are allowed.
Individuals
Individuals and the government
The government
(means of
production)
Who decides
what people
can produce
and buy?
What are my
employment
options?
You can work for whoever you want.
Some people work for the government.
Most people work for the government.
Who wrote
about these
economic
systems?
Adam Smith, ​The Wealth of Nations
Karl Marx and Freidrich Engles, ​The
Communist Manifesto
Karl Marx and Freidrich Engles, ​The
Communist Manifesto
There has never been a “pure” example of capitalism, socialism, or communism. Most economic systems are mixed.
FA ​
U​NIT 10.3| Causes and Effects of the Industrial Revolution| ​SQ 11. What is the difference between capitalism, socialism, and communism?
SQ 11. What is the difference between capitalism, socialism, and communism?
Task 1: ​Identify ​and ​explain a similarity ​or ​difference between the ​social classes​ under capitalism, socialism, and communism.
Be sure to include evidence from the chart in your response. There is a difference because under capitalism allows social
classes, socialism allows some social classes, and communism does not allow social classes.
Compare
Task 2: ​Identify ​and ​explain a similarity ​or ​difference between the ​goals ​of capitalism, socialism, and communism. Be sure to
include evidence from the chart in your response. There is a difference between the three of them is that capitalism
involves individuals work for their own self interest, socialism requires group work which requires redistribution of
resources based on need. Communism creates a classless society that distributes resources equally.
Task 3: ​Identify ​and ​explain a similarity ​or ​difference between ​business ownership ​in capitalism, socialism, and communism. Be
sure to include evidence from the chart in your response. There is a difference because capitalism allows and only calls for
individual ownership of businesses, Socialism only allows the government to operate and owns major industries, and
communism is similar to socialism because they allow the government to operate and own major industries.
U​NIT 10.3| Causes and Effects of the Industrial Revolution| ​SQ 11. What is the difference between capitalism, socialism, and communism?