Alternative Economic Systems

Communism: Theory

• Karl Marx believed history was a struggle between capitalists (owned means of production) and others (who worked for capitalists).

Communism: Theory

• Karl Marx believed history was a struggle between capitalists (owned means of production) and others (who worked for capitalists).

• During the Industrial Revolution, the means of production became too expensive for most people to own

Communism: Theory

• During the Industrial Revolution, the means of production became too expensive for most people to own

• This allowed capitalists to make large profits

Communism: Theory

• During the Industrial Revolution, the means of production became too expensive for most people to own

• This allowed capitalists to make large profits

• Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions

Communism: Theory

• Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions

• At some point, workers would tire of conditions and revolt

Communism: Theory

• Exploited the workers, workers couldn’t afford products which led to overproduction and eventually recessions

• At some point, workers would tire of conditions and revolt

• After the revolution, they would share the fruits of their labor equally

Communism: Reality

• Marx never laid out plans for how a communist economic system would function

Communism: Reality

• Marx never laid out plans for how a communist economic system would function

• Thus, there have been numerous failed attempts at communism (Soviet Union)

Communism: Reality

• Soviet Communism was driven by fear of the government

Communism: Reality

• Soviet Communism was driven by fear of the government

• The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products

Communism: Reality

• Soviet Communism was driven by fear of the government

• The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products

• The standard of living was very low, and people lacked incentive to work hard

Communism: Reality

• The gov’t made all decisions, which led to shortages of needed products, and surpluses of unwanted products

• The standard of living was very low, and people lacked incentive to work hard

• This led to its failure when the basic commodities needed for survival were not being adequately produced

Socialism: Reality

• Socialism traces its roots to Marx, but without the worker’s revolution

Socialism: Reality

• Socialism traces its roots to Marx, but without the worker’s revolution

• Socialism can exist on very different levels

Socialism: Reality

• Socialism traces its roots to Marx, but without the worker’s revolution

• Socialism can exist on very different levels– In Western Europe, the government may

own large industries and utilities while allowing other markets to be capitalistic

Socialism: Reality

• Socialism traces its roots to Marx, but without the worker’s revolution

• Socialism can exist on very different levels– In Western Europe, the government may

own large industries and utilities while allowing other markets to be capitalistic

• The current trends in in Western Europe are away from Socialism

Socialism: Reality

• Socialism can exist on very different levels– In Western Europe, the government may

own large industries and utilities while allowing other markets to be capitalistic

• The current trends in in Western Europe are away from Socialism– Many nations have sold off government

owned industry to private business b/c they are more efficient

Capitalism: Reality

• Private individuals make the decisions of the economy with limited gov’t input

Capitalism: Reality

• Private individuals make the decisions of the economy with limited gov’t input

• The government’s role is to set and enforce basic rules for how businesses are organized

Capitalism: Reality

• Private individuals make the decisions of the economy with limited gov’t input

• The government’s role is to set and enforce basic rules for how businesses are organized

• We are far from pure capitalism in the US

Capitalism: Reality

• Private individuals make the decisions of the economy with limited gov’t input

• The government’s role is to set and enforce basic rules for how businesses are organized

• We are far from pure capitalism in the US– Over 1/3 of the money earned in our country

goes to the gov’t to support education, welfare, health services and various other gov’t programs

Capitalism: Reality

• We are far from pure capitalism in the US– Over 1/3 of the money earned in our

country goes to the gov’t to support education, welfare, health services and various other gov’t programs

• However, we are far from other comparative countries like France and Sweeden who are well over 50%