Capitalism- Free Markets Communism- planned economies

Philosopher(s) and year

Key Ideas

Driving Force

Natural or Man made

Who determines key economic principles? The People or the Government?

Factors of Production

Price

Supply/Demand/Output

Wages

Views on incentive, consequences, goals

Overall economic policy

Views on Profit

Views on competition

Freedom

Inventions and improvements

Government influence

Capitalism-Free market Communism-Command Economy Philosopher(s) and year

Key Ideas

Driving Force

Natural or Man madeWho determines key economic principles? The Private Individuals or the Government (small group of public officials)?

Factors of Production

Price

Supply/Demand/Output

Wages

Views on incentive, consequences, goals

Overall economic policy

Views on Profit

Views on competition

Freedom

Inventions and improvements

Government influence

Adam Smith – 1776 Wealth of Nations Karl Marx- 1848 Communist Manifesto

Laissez-faire, Econ liberty= Econ progress, the invisible hand – self interest

Class struggle, haves vs the have not, redistribution of wealth

Profit, price, and competition (invisible hand) self interest

Central Planners

Natural laws of economics Man-made, “fairness”

People make decisions based on scarcity and alternative uses – mutual exchangePeople make decisions based on scarcity and alternative uses People make decisions based on scarcity and alternative uses – mutual exchange

People make decisions based on scarcity and alternative uses

Government makes decisions based on scarcity and alternative uses Government makes decisions based on scarcity and alternative uses Government makes decisions based on scarcity and alternative uses Government makes decisions based on scarcity and alternative uses

Self-interest leads to collective benefits Policy based on man made goals and quotas

Encouraged- driving force Discouraged Those who make profit did so by taking advantage of others

Encouraged leads to advancement Discouraged- shared resources

Economic freedom leads to progress Economic freedom leads abuses

Incentive for profit leads to improvements Lack of incentive stalls progress in the private sector

Hands off- let scarcity drive price, outputs, and the factors of production (limited)- don’t benefit special interest

Hands on- the system makes the decisions

Was Capitalism fair or unfair?

Was Communism Fair or unfair?

Which system is more likely to lead to improvements?

Which system is more natural? Explain

Which system is more of a man made creation? Explain

Which groups of people would Communism most appeal to and why?

What do we have in America? Examples: