Aim: In what ways do Communism and Capitalism

Differ?

Define: Proletariat, Capital, Free Enterprise, Stock

OBJECTIVE

• To be able to identify the fundamental characteristics of both communism and capitalism

Define:

• Proletariat

• Capital

• Free Enterprise

• Stock

Working Class as described by Karl Marx

Money to invest in Business

The ability to start your own business and be an entrepreneur

Money that individuals invest in companies hoping to make money from that company’s profit

• Originally called, Marxism or Socialism

• Founded By KARL MARX

• Marx wrote the book The Communist Manifesto in which he explains what he thinks will cure the problems of the poor working class people during the Industrial Revolution.

Communism Continued…

•Marx called the workers of the world the “Proletariat”

•He says that all of history is a struggle between the “haves” and “have nots”.

Karl Marx’ Plan• Marx said that the only way to

end the class struggle between rich and poor is to make everything collectively owned.

• Marx says that when everyone collectively own everything, there will be no rulers or ruled

The Concept of Communism

• The idea behind Communism is to create a classless society where everyone is equal and everything is shared.

• Everyone makes the same amount of money and there is no competition between businesses.

• Communism is often confused as a government system and not an economic one. This is because the government has so much control in communist societies.

• The government sets prices, production quotas and wages.

-Capitalism was developed by Adam Smith in Wealth of Nations

-Smith developed the idea of Laissez- Faire Economics in which the Government has little or no interference in the economy

• In Capitalism:

–The people (consumers) set the prices and production amounts of goods

–People have the ability to own businesses and buy stock

–Ideally, people make what they are worth and there is always incentives to work harder in order to make more money

Terms

• Utilitarianism

• Socialism

• means of production

• Communism

• Proletariat

• laissez-faire

Assignment

• You are the lead economist of a brand new start up country. Choose a economic system that your government will implement for your country. Explain why you believe this system is most suitable for your country. Include the economic systems founder and its basic beliefs.