ECONOMIC SYSTEMS

1. ECONOMIC SYSTEMS

2. TRADITIONAL • Families, clans, or tribes make economic decisions based on customs and beliefs Ex.) Kavango people of Namibia in southern Africa Ex.) Amish people living in America

3. COMMAND • A system where society’s leaders, usually central government make all economic decisions; called a CENTRALLY PLANNED ECONOMY Ex.) North Korea Kim Jong II Ex.) Cuba Fidel Castro; Raul Castro

4. MARKET • Based on individual choice not government directives; consumers vote with their dollars and producers make decisions based on what can make them the most money; • In a market economy, people make decisions based on their own self-interest Ex.) UK Ex.) US

5. What economic system does the US have? How do you know? • We have a Market-Command system • The government controls certain aspects of our society known as the public sector; things like schools, postal service, etc. • For the most part, producers decide what they’ll produce and consumers are allowed to spend their money how they would like

6. What are the advantages and disadvantages of a traditional economic system?

7. Why are traditional economies being forced to change? • Modern telecommunications have bombarded these societies with images of what the rest of the world is like; the young people see these things and want them • Many are leaving their societies to find a different life for themselves

8. Government Government owns basic resources; the rest are privately owned All resources are privately owned Market forces allocate resources Government planners decide how resources are used Government planners allocate basic resources; market forces allocate privately-owned resources Government makes all economic decisions Government makes decisions in the basic industries Government’s role limited-mostly to ensure market forces are free to work

9. What effect do command economies have on people? They try to provide for everyone: sick, elderly Central planners usually have very little understanding of local conditions Leaders can choose to produce items that do not make money Ex.) medicines Workers have very little incentive to improve their productivity They face shortages Individual rights are subordinate to the needs of the state

10. Why are consumer goods often in short supply in a command economy? Because they often set prices well below that of a market economy.

11. Why do these economies often fail? Because of the human suffering that often goes hand in hand with command economies.

12. Karl Marx MAJOR WORKS: Das Kapital The Communist Manifesto

13. Karl Marx FAMOUS QUOTE: “Workers of the world unite; you have nothing to lose but your chains.” The whole industrial system relied on the exploitation of workers. He was telling them to unionize and fight back.

14. Karl Marx BELIEF ABOUT WORKERS & BOSSES: He believed that once the wealth was so concentrated in so few hands, that workers would revolt and create a new society without economic class.

15. Karl Marx HIS INFLUENCE: Russian Revolution – 1917 Chinese Revolution – 1949

16. Karl Marx Video • http://www.disclose.tv/action/viewvideo/60913/Karl_Marx_Documentary/

17. BIBLIOGRAPHY: • http://www.venturepublications.com.na/images/preview/303_kavangopeople.jpg • http://desktopd.com/wp-content/uploads/2010/08/Raul-Castro.jpg • www.thenewblackmagazine.com/Photofiles/castro.jpg • http://missiledefense.files.wordpress.com/2010/03/kim-jong-il.jpg • http://www.publicaffairslinks.co.uk/images/uk-flag.png • http://ec.europa.eu/education/img/flags/usa.gif • http://www.corbisimages.com/images/67/7936FED6-2F84-4E43-ADFC-5F1D3F3555FE/TL020010.jpg • http://farm1.static.flickr.com/103/267236537_fd1aaf901f_o.jpg • http://libcom.org/files/images/history/marx.jpg • http://www.inkblotmazes.com/images/Karl-Marx-Maze-1250.png • http://www.scenicreflections.com/ithumbs/Workers_Revolt_Wallpaper_x5zrw.jpg • http://media.web.britannica.com/eb-media/33/91633-004-5B366CAF.jpg