ECONOMY
This word is thrown around a lot in
very broad ways…what is it? How
does it impact nation-states and
societies??
Look back at your “New Ways of Thinking”
(Ch. 7 Sec. 4) Notes
• What new ideas came out of the Industrial
Revolution? Why do you think these ideas
emerged?
Capitalism, Communism,
and Socialism
What is capitalism?
• Economic system.
• Believes in individual ownership and
competition.
• The theory is that when everyone is
selfish, it benefits everyone.
• Adam Smith is “the” capitalist
– Wealth of Nations: capitalism good for society
What’s good about capitalism?
• Freedom, choice.
• You can work wherever, buy whatever, and
pretty much do whatever.
• If you’re successful, you can be very
successful. Think Bill Gates, Papa John, Mark
Zukerburg (is that his real name?).
• Who would support this idea?
What’s bad about capitalism?
• No “safety net.”
• If you’re unsuccessful, you can be very
unsuccessful. Think about the poor.
• Big gap between rich and poor.
What is communism?
• Economic system.
• Believes in collective (group) ownership and a
planned economy (government makes decisions).
• The theory is that everybody pools their resources
and labor to evenly distribute everything.
• Karl Marx is “the” communist
– The Communist Manifesto: 1848, class struggle, problems
of capitalism
– Das Kapital: 1867, critique of capitalism
– Both written with Engels
Central Idea: Communist Manifesto
‘What I did that was new was to prove (1) that
the existence of classes is only bound up with
particular, historic phases in the development of
production; (2) that the class struggle
necessarily leads to the dictatorship of the
proletariat; (3) that this dictatorship itself only
constitutes the transition to the abolition of all
classes and to classless society.’ [Karl Marx, letter to J.
Weydemeyer, 5th March 1852 in Karl Marx, Frederick Engels Selected Works Vol.1 (Progress
Publishers, Moscow, 1977) p.528.] - See more at: http://www.historytoday.com/rogerspalding/communist-manifesto#sthash.yyei8xcT.dpuf
What’s good about communism?
• Security, basic needs met.
• Everyone would have a job, house, health
care, etc.
• Who would support this idea?
What’s bad about communism?
• Lack of choice
• No reward for being a better worker or
punishment for being a slacker (incentives and
consequences).
• Everyone expected to be the same (lack of
focus on individual growth).
Communist Manifesto 1848
Focus: Class Struggle (bourgeois-middle class & proletariat- lower class)
Problems within capitalism
•
•
•
•
Abolition of property
Heavy, progressive taxes
Abolition of inheritance
Confiscation of property of all
emigrants and rebels
• Central banking
• State-controlled communication and transportation
• State-controlled education of the children
Marxism
Marx and Engels
studied the history
of the world’s
economies
Capitalism
Feudalism
Basic
Communism
Socialism
Communism!!!
They believed
they discovered
an inevitable
pattern
Communism/Socialism:
What’s the difference?
Socialism is the stage between Capitalism and
Communism. It builds upon the previous
system (Capitalism) by nationalizing the
“means of production” (i.e. corporations,
resources, banks, etc.), but not by making
everyone equal. People are paid wages based
on several factors (social need, difficulty,
amount of schooling required, etc.), so not
everyone will make the same wage.
How’s this related to the Industrial
Revolution?
• Adam Smith’s capitalism dominated the IRLed to bad working conditions.
• Karl Marx wrote about communism as
solution to capitalism’s problems.
– Marx said the workers would get fed up and
overthrow their governments and start
communism.
Warm-Up
• Which economic system is better for
society…communism or capitalism?