Economic Systems Peoples and World Cultures

CapitalismCapitalism is based on private ownership of the means of production and on individual economic freedom. Most of the means of production, such as factories and businesses, are owned by private individuals and not by the government.

Free Competition is the basic rule of capitalism.

People should compete freely without interference

from government or any other outside force. In

theory, prices are kept low because the consumer will

seek out the best product for the cheapest price.

Supply and Demand: prices are determined by how

many products are on the market, and how many

people want that product. When supply is increased

the prices tend to decrease.

CommunismKarl Marx and Friedrich Engels turned the world upside down in 1848 with the Communist Manifesto, which emphasized how wealth should be evenly distributed.

According to Marx, capitalism exploited

workers and favored the wealthy elite.

Communism emphasizes shared property

and the people should ultimately control

the economy. The government should

exercise control in the name of the people

during this transition.

Socialism

Similar to communism. It calls for the major means of production to be in the hands of the people, either directly or through the government. Wealth and income should be shared more equally among people.

Socialists differ from communists because they don’t believe private

property should be completely eliminated. The government should in turn

redistribute wealth to make society more fair and just.

Communism and Democracy

Click the link below for an economic and political

comparison chart

http://www.diffen.com/difference/Communism_vs_Democracy