# 3 V - ECONOMIC SYSTEMS types of economic systems : ... economic systems • economic efficiency -...
Transcript of # 3 V - ECONOMIC SYSTEMS types of economic systems : ... economic systems • economic efficiency -...
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ECONOMIC SYSTEMS AND THE BATTLE OF PHILOSOPHIES
ECONOMIC SYSTEMSAND THE BATTLE OF PHILOSOPHIES
• WHAT IS AN ECONOMIC SYSTEM ?• HOW DO THEY WORK ?• WHAT TYPES ARE THERE ?• WHAT ARE THE ADVANTAGES AND
DISADVANTAGES OF EACH ?• GOALS FOR AN
ECONOMIC SYSTEM
CHAPTER CONTENTS
ECONOMIC SYSTEMS
WHAT ARE ECONOMIC SYSTEMS AND HOW DO THEY WORK ?
ECONOMIC SYSTEMS
WHAT IS AN “ ECONOMIC SYSTEM ” ?
WHAT IS A “ SYSTEM ” ?
A WAY OF DOING SOMETHING
A METHOD USED BY A SOCIETY TO PRODUCE AND DISTRIBUTE GOODS AND SERVICES
A SOCIETY CAN NOTEXIST WITHOUT AN
ECONOMIC SYSTEM !!
ECONOMIC SYSTEMSWHAT IS ITS PLACE IN HUMANISTIC SYSTEMS ?
ECONOMIC SYSTEMHOW WE SURVIVE
SOCIAL SYSTEM WHAT WE VALUE
GOVERNMENTSYSTEM
PHILOSOPHYWE LIVE BY
•DECISION MAKING•RESOURCE USE•GOODS DISTRIB .•TRADE
•CULTURE•LANGUAGE•RELIGION•FAMILY
•SOCIAL CONTRACT •LAWS •POLICIES •INSTITUTIONS
ECONOMIC SYSTEMS
• WHAT GOODS AND SERVICES SHOULD BE PRODUCED ?
• HOW SHOULD THE GOODS AND SERVICES BE PRODUCED ?
• WHO SHOULD GET TO CONSUME WHAT TYPE AND HOW MUCH OF THE GOODS AND SERVICES ?
• WHO SHOULD MAKE THESE DECISIONS ?
IN SELECTING A SYSTEM EVERY SOCIETY MUST ANSWER FOUR
FUNDAMENTAL QUESTIONS :
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ECONOMIC SYSTEMS
PRODUCE WHAT GOODS AND SERVICES ?
•CONSUMER GOODS•CAPITAL / INDUSTRIAL •DEFENSE•EDUCATION•PUBLIC HEALTH •WELFARE
ECONOMIC SYSTEMS
HOW SHOULD THEY BE PRODUCED ? WITH WHAT RESOURCES ? •OIL•ELECTRIC•SOLAR•NUCLEAR•COAL•WIND
ECONOMIC SYSTEMS
• CONTROL HOW THE SOCIETY DISTRIBUTES GOODS AND SERVICES ?
• CONTROL HOW THE SOCIETY DISTRIBUTES INCOME -FACTOR PAYMENTS
WHO GETS TO CONSUME AND HOW ?
THERE ARE 2 IMPORTANT PARTS TOUNDERSTANDING THIS > DOES THE GOVERNMENT OR OPEN MARKET ………
ECONOMIC SYSTEMSWHO SHOULD MAKE THE DECISIONS ?
• THERE ARE 3 OPTIONS :– LEAVE IT UP TO THE OPEN
MARKET > THE CONSUMERS– CONSUMERS AND GOVERNMENT
SHARE IN MAKING THE DECISIONS
– THE GOVERNMENT MAKES ALL THE DECISIONS
ECONOMIC SYSTEMS
ALL ECONOMIC SYSTEMS ALSO REQUIRE THE “ FACTORS OF PRODUCTION ” -
LAND , LABOR , AND CAPITAL
REMINDER !!!!
ECONOMIC SYSTEMS
TYPES OF ECONOMIC SYSTEMS
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ECONOMIC SYSTEMS
• BARTER ECONOMY – DIRECT EXCHANGE OF ONE GOOD FOR ANOTHER WITHOUT USING MONEY > 3 CHARACTERISTICS :– ANCIENT SYSTEM WITH NO ADVAN -
TAGES IN A MODERN WORLD > FOUND IN MOST UNDERDEVELOPED“ THIRD WORLD COUNTRIES ”
4 TYPES OF ECONOMIC SYSTEMS :Underdeveloped > Adjective . Industrially or economically backward .
Synonym Related AntonymBackward Archaic AdvancedPrimitive Unprogressive Evolved
A lack of investment will cause a company or a country to be underdeveloped .
ECONOMIC SYSTEMS
• BARTER ECONOMY > 3 CHARCTERISTICS :– VERY DIFFICULT TO SET
VALUES FOR GOODS AND SERVICES
– RETARDS INNOVATION AND GROWTH • CAPITALISM ( A FREE MARKET
ECONOMY ) - AN UNCONTROLLED PRICE BASED SYSTEM THAT USES MONEY WHERE PRIVATE CONSUMERS ..
4 TYPES OF ECONOMIC SYSTEMS :Retard > Verb . To slow the progress of .
Synonym Related AntonymDelay Detain AdvanceImpede Decrease Accelerate
When the water sprinkler went on it retarded the fire’s progress .
Innovation > Noun . Something newly introduced .
Synonym Related AntonymInvention Deviation StagnantChange Introduction Old
Apple’s Ipad was considered a great innovation .
ECONOMIC SYSTEMS
• …. MAKE THE DECISIONS REGARDING PRODUCTION AND CONSUMPTION
• SOCIALISM ( A MIXED ECONOMY ) - A PARTIALLY CONTROLLED PRICE BASED SYSTEM THAT USES MONEY WHERE MAJOR PRODUCTION AND CONSUMPTION DECISIONS ARE SHARED BETWEEN THE GOVERNMENT AND CONSUMERS
4 TYPES OF ECONOMIC SYSTEMS :
ECONOMIC SYSTEMS
• COMMUNISM ( A CENTRALLY PLANNED ECONOMY ) - SYSTEM THAT USES CONTROLLED PRICES , MONEY , AND ALL PRODUCTION AND CONSUMPTION DECISIONS ARE MADE BY THE GOVERNMENT
4 TYPES OF ECONOMIC SYSTEMS :
WHERE DID THE IDEAS FOR THESE SYSTEMS COME FROM ??
ECONOMIC SYSTEMSDO YOU KNOW ANY OF US ??
CAPITALISMSMITH BENTHAM
SOCIALISMMARX
COMMUNISMA CLOSER LOOK AT THESE THREE
ECONOMIC SYSTEMS
CAPITALISMSMITH BENTHAM
SOCIALISMMARX
COMMUNISM
TWO IMPORTANT CONSIDERATIONS :• NO “ PURE ECONOMIC SYSTEM ” EXISTS !
ELEMENTS OF THE FOUR EXIST IN EACH OTHER !!
• PASSIONATE DEBATE OVER THESE ……
LATE 1700 s EARLY 1800 s MID 1800 s
HAYEK
EARLY 1900 s
FRIEDMAN
LATE 1900 s
KEYNES
EARLY 1900 s
LENIN
EARLY 1900 s
Passionate > Adjective . Capable of or having intense feelings , showing or expressing strong emotions .
Synonym Related AntonymPeppery Fiery PassionlessArdent Hot Cold
You could see that she was passionate about the subject .
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ECONOMIC SYSTEMSTWO IMPORTANT CONSIDERATIONS :• … IS ROOTED IN ARGUMENTS
ABOUT THE SAME FUNDAMEN -TAL BELIEFS THAT HAVE FUELED DEBATES OVER GOV -ERNMENTAL PHILOSOPHIES = THE NATURE OF MAN :– EVIL OR GOOD ??– MOTIVATED OR LAZY ??– NEED TO BE CONTROLLED
OR ABLE TO MANAGE HIMSELF ??
• MAN IS GOOD• MAN IS SELF MOTIVATED• A SOCIETY’S INTERESTS ARE BEST SERVED WHEN
MAN IS FREE
• MAN IS EVIL• MAN IS LAZY• A SOCIETY’S INTERESTS ARE BEST SERVED WHEN
MAN IS CONTROLLED BY AUTHORITY
ECONOMIC SYSTEMSDEMOCRACY AND CAPITALISM
MONARCHY / TOTALITARIAN AND COMMUNISM
LIMITED DEMOCRACY AND SOCIALISM • MAN IS GOOD• MAN CAN NOT HELP HIMSELF• SOCIETY MUST BE HELPED BY AN AUTHORITY
ECONOMIC SYSTEMS
• INSPIRED BY THE ECONOMIC ABUSES OF FEUDALISM & MONARCHIAL RULE
• THE ECONOMIC PART OF ENLIGHTENMENT PHILOSOPHY
• ORIGINALLY CALLED LIBERALISM BECAUSE IT PROMOTED INDIVIDUAL LIBERTIES AND FREEDOMS
CAPITALISMADAM SMITH TAUGHT US ABOUT IT IN HIS BOOK WEALTH OF NATIONS IN 1776ORIGINS AND HISTORY > 6 FACTS :
ECONOMIC SYSTEMS
• CAUSED THE INDUSTRIAL REVOLUTION TO TAKE PLACE IN THE 1800 s > THE SECOND GREATEST GLOBAL STANDARD OF LIVING INCREASE IN HISTORY
• CAME UNDER ATTACK AND FELL OUT OF FAVOR IN THE EARLY 1900 s > LED TO ECONOMIC STAGNATION AND MASSIVE LOSSES OF INDIVIDUAL FREEDOMS
CAPITALISMORIGINS AND HISTORY > 6 FACTS :Stagnate / Stagnation > Verb . Fail to progress or develop .
Synonym Related AntonymVegetate Stifle AdvanceConstipate Static Grow
If you do not read , or listen to , the news you will stagnate as a citizen .
ECONOMIC SYSTEMS
• RETURNED TO FAVOR OVER THE PAST 28 YEARS AND HAS PRODUCED THE GREATEST ADVANCEMENT IN GLOBAL PRODUCTIVITY AND STANDARDS OF LIVING IN HISTORY !!! THANKS TO
CAPITALISMORIGINS AND HISTORY > 6 FACTS :
ECONOMIC SYSTEMS
• PEOPLE HAVE AN INATE DESIRE TO BETTER THEIR POSITION IN LIFE
• PEOPLE RESPOND TO INCENTIVES• BY PURSUING ONE’S OWN INTERESTS
THE INDIVIDUAL WILL HELP SOCIETY FAR MORE EFFECTIVELY THAN WHEN HE , OR THE GOVERNMENT , FOCUSES ON TRYING TO HELP THE SOCIETY
CAPITALISM4 BELIEFS :
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ECONOMIC SYSTEMS
• THAT THE “ INVISIBLE HAND ” WOULD GUIDE THE CAPITALIST SYSTEM > A COMBINATION OF 3 FACTORS THAT MUST EXIST AND WORK TOGETHER :
– PROMOTION OF SELF INTEREST AND PERSONAL GAIN IN THE FORM OF PROFIT - THE FINANCIAL GAIN MADE IN A TRANSACTION ( EXCHANGE ) OF GOODS OR SERVICES
CAPITALISM4 BELIEFS :
ECONOMIC SYSTEMS
• THE “ INVISIBLE HAND ” > 3 PARTS :– INCENTIVE - THE HOPE OF REWARD
AND FEAR OF PUNISHMENT THAT ENCOURAGES STABLE BEHAVIOR
– COMPETITION - THE STRUGGLE AMONG PRODUCERS FOR THE DOLLARS OF CONSUMERS > THE MARKET REGULATOR
CAPITALISM4 BELIEFS :
ECONOMIC SYSTEMS
• ENCOURAGES FREEDOM , INDIVIDUAL RIGHTS , THE RULE OF LAW , AND DEMOCRATIC GOVERNMENTAL SYSTEMS
• PRIVATE OWNERSHIP OF GOODS , PROPERTY , BUSINESSES , AND THE FACTORS OF PRODUCTION
• VOLUNTARY EXCHANGES OF MONEY , GOODS , AND SERVICES
CAPITALISM5 CHARACTERISTICS :
ECONOMIC SYSTEMS
• ENCOURAGES COMPETITION AMONG PRODUCERS AND REWARDS DELIVERY OF VALUE
• BUSINESSES AND CONSUMERS MAKE THE DECISIONS ABOUT WHAT TO PRODUCE , HOW TO PRODUCE IT , AND WHO CONSUMES IT > A POLICY OF “ LAISSEZ FAIRE ” IS FOLLOWED = LIMITED GOVERNMENT INTERVENTION
CAPITALISM
5 CHARACTERISTICS :
ECONOMIC SYSTEMS
• HOUSEHOLDS - SUPPLY THE LABOR AND CAPITAL FOR THE SYSTEM
• FIRMS / COMPANIES - ORGANIZATIONS THAT USE RESOURCES TO PRODUCE PRODUCTS AND SERVICES THAT ARE SOLD
CAPITALISMTHE 2 FUNDAMENTAL PARTS OF THE SYSTEM ARE BOTH UNDER PRIVATE CONTROL :
NOTICE THE ABSENCE OF GOVERNMENT !!
ECONOMIC SYSTEMS
• THE FACTOR MARKET - WHERE RESOURCES , OR THE FACTORS OF PRODUCTION , ARE EXCHANGED AND GOODS ARE PRODUCED
• THE PRODUCT AND SERVICE MARKET- WHERE THE FINISHED GOODS AND SERVICES ARE EXCHANGED
CAPITALISMTHE 2 FUNDAMENTAL MARKETS WITHIN THE SYSTEM :
** JUST BE AWARE THAT THERE CAN BE A LITTLE OVERLAP BETWEEN THESE AT TIMES
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ECONOMIC SYSTEMS
BE AWARE THAT THE INTERACTIONBETWEEN THESE 2 MARKETS IS CALLEDTHE “ CIRCULAR FLOW ” BY ECONOMISTS
THE 2 MARKETS :
PRODUCTMARKET
FACTORMARKET
FIRMSHOUSEHOLDS
CIRCULARFLOW
CAPITALISM
ECONOMIC SYSTEMS
• ECONOMIC EFFICIENCY - ONLY THE ITEMS CONSUMERS WANT GET PRODUCED , WHEN THEY WANT THEM , AND WITH PRICES AT THE “ WILLING -NESS TO PAY ” THRESHOLD
• ECONOMIC FREEDOM - WORKERS WORK WHERE THEY WANT, PRODUCERS CAN PRODUCE WHAT THEY WANT, AND INDIVIDUALS CONSUME WHAT ……..
CAPITALISMTHE 3 ADVANTAGES :Threshold > Noun . The entrance or entry way .
Synonym Related AntonymVerge Edge InsideBrink Point Within
He stood at the threshold of the room .
ECONOMIC SYSTEMS
• …. THEY WANT• ECONOMIC GROWTH - COMPETITION
ENCOURAGES INNOVATION > THE ONLY WAY TO RAISE A SOCIETY’S STANDARD OF LIVING
CAPITALISMTHE 3 ADVANTAGES :
THE 2 DISADVANTAGES :• THE SYSTEM DOES NOT PROMOTE
EQUITY = EQUAL TREATMENT FROM …
ECONOMIC SYSTEMSCAPITALISM
THE 2 DISADVANTAGES :• …. A REWARD PERSPECTIVE AND DOES
NOT SPREAD WEALTH EVENLY• THE SYSTEM ENCOURAGES EXPLOIT –
ATION OF ALL RESOURCESCOUNTRIES BASED ON CAPITALISM :
Perspective > Noun . A view , or point of view .
Synonym Related AntonymOutlook Opinion PointlessVista Prospect Thoughtless
John was asked about his perspective regarding the program .
ECONOMIC SYSTEMSSOCIALISM ( MAY ALSO BE KNOWN AS “ COLLECTIVISM ” )ORIGINS AND HISTORY > 5 FACTS :• FOUNDER WAS JEREMY BENTHAM• CREATED IN RESPONSE TO THE
FOLLOWING :– WORKING CONDITIONS OF THE
INDUSTRIAL REVOLUTION > WHY ??– CAPITALISM AND SOCIAL DARWINISM– SOCIAL AND POLITICAL STRIFE IN
SOCIETIES UNDER MONARCHIES
ECONOMIC SYSTEMSSOCIALISM ( MAY ALSO BE KNOWN AS “ COLLECTIVISM ” )ORIGINS AND HISTORY > 5 FACTS :• GAINED FAVOR IN THE EARLY 1900 s
AND DOMINATED 2 / 3 OF THE WORLD• RESULTED IN :
– PRODUCTIVITY DECLINES AND ECONOMIC STAGNATION
– DECLINE IN THE STANDARD OF LIVING
– SIGNIFICANT LOSS OF INDIVIDUAL FREEDOMS AND SOCIAL UNREST
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ECONOMIC SYSTEMSSOCIALISM ( MAY ALSO BE KNOWN AS “ COLLECTIVISM ” )ORIGINS AND HISTORY > 5 FACTS :• FELL FROM FAVOR WHEN THE
RADICAL FORMS OF THIS SYSTEM ( FASCISM AND COMMUNISM ) FAILED IN THE MID TO LATE 1900 s
Radical > Adjective . Carried to an utmost extreme .
Synonym Related AntonymRevolutionary Rebel ConservativeExtreme Contrary Reserved
Her views on the subject were considered to be radical .
ECONOMIC SYSTEMSSOCIALISMFOOD FOR THOUGHT ! > DID THE UNITED STATES EVER SERIOUSLY CONSIDER SOCIALISM ?
YES , MANY TIMES !!!! ALL FAILURES !!
ECONOMIC SYSTEMSSOCIALISMFOOD FOR THOUGHT ! > DID THE UNITED STATES EVER SERIOUSLY CONSIDER SOCIALISM ?
YES , MANY TIMES !!!! ALL FAILURES !!
FAIR DEAL NEW FRONTIER
GREAT SOCIETY HAVEN’T WE SEEN THIS
MOVIE BEFORE ??
ECONOMIC SYSTEMSSOCIALISMTHREE BELIEFS : • SOCIETY SHOULD PROVIDE FOR
ECONOMIC EQUALITY BY ENSURING THE “ GREATEST HAPPINESS FOR THE GREATEST NUMBER OF PEOPLE AND THAT INDIVIDUAL RIGHTS SHOULD BE SACRIFICED FOR SOCIETY’S RIGHTS ”
• HUMAN NATURE IS BASICLY GOOD AND THE MAJORITY OF PEOPLE HAVE A CONCERN FOR SOCIAL JUSTICE
ECONOMIC SYSTEMSSOCIALISMTHREE BELIEFS :• IF SOCIETY WORKED FOR THE
BENEFIT OF ALL MEMBERS , POVERTY AND INJUSTICE WOULD DISAPPEAR
FOUR CHARACTERISTICS :• AT THE START , ENCOURAGES POLITI -
CAL FREEDOM AND CO-EXISTENCE WITH DEMOCRATIC FORMS OF GOVERNMENT
“ I may not know all the keys to success , but I do know that the key to failure is trying to please everybody . ” ~ Bill Cosby
ECONOMIC SYSTEMSSOCIALISM
FOUR CHARACTERISTICS :• ALLOWS SOME PRIVATE OWNERSHIP ,
HOWEVER SIGNIFICANT PORTIONS OF THE FACTORS OF PRODUCTION AND THE PRICING SYSTEM ARE OWNED / CONTROLLED BY THE GOVERNMENT
• GOVERNMENT TAKES THE DOMINANT ROLE IN “ MANAGING ” THE ECONOMY THROUGH SPENDING AND REGULATION
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ECONOMIC SYSTEMSSOCIALISMFOUR CHARACTERISTICS :• INEFFICIENT FOR TWO REASONS :
• REDUCED PRIVATE OWNERSHIPLIMITS INCENTIVES AND DISCOUR -AGES INNOVATION = SLOWS GROWTH
• HIGH COSTS OF GOVERNMENT SPENDING AND SUPPORTING SOCIAL PROGRAMS - GOVERNMENT ECONOMIC ACTIONS TO ENCOURAGE A STABLE SOCIETY , DRIVES UP THE COST OF LIVING
ECONOMIC SYSTEMSSOCIALISMADVANTAGES :• PROMOTES GREATER ECONOMIC
EQUALITY ( SPREADS THE WEALTH )• LESS EXPLOITATIONDISADVANTAGES :• LIMITS FREEDOMS• TENDS TO BE VERY INEFFICIENT • TENDS TO BE VERY COSTLY AND
RETARDS GROWTH
COUNTRIES BASED ON SOCIALISM :
GREECE SPAIN
ECONOMIC SYSTEMSCOMMUNISM AN EXTREME FORM OF SOCIALISM THAT PUTS ALL ECONOMIC CONTROL IN THE HANDS OF THE GOVERNMENT = NO RULE OF LAWFOUR ADDITIONAL SOCIALIST BELIEFS :• ECONOMICS IS THE MOST POWERFUL
FORCE IN HISTORY AND A CLASS STRUGGLE BETWEEN EMPLOYERS AND THE PROLETARIAT - WORKING CLASS ( EMPLOYEES ) , WILL ALWAYS BE UNAVOIDABLE
ECONOMIC SYSTEMSCOMMUNISM FOUR ADDITIONAL SOCIALIST BELIEFS :• CAPITALISM CREATES PROSPERITY
FOR ONLY A FEW AND POVERTY FOR MANY
• THE WEALTHY ( EMPLOYERS ) HAVE ALWAYS OWNED THE FACTORS OF PRODUCTION AND HAVE NOT PROVIDED ECONOMIC EQUALITY
• THAT THE WORKERS OF THE WORLD WOULD DO 3 THINGS :
Prosper / Prosperity > Verb . To be fortunate , successful , or well off .
Synonym Related AntonymThrive Affluence PoorAbundance Wealth Destitute
Spock said , “ live long and prosper . ”
ECONOMIC SYSTEMSCOMMUNISM
• WORKERS WOULD DO 3 THINGS :• UNITE AND CREATE A CLASSLESS
SOCIETY• OVERTHROW CAPITALIST SYSTEMS
AND GOVERNMENTS > AND MANY DID !! > RUSSIA AND CHINA
• ESTABLISH GOVERNMENTS OF THE PEOPLE WITH CENTRALLY PLANNED ( GOVERNMENT CONTROLLED ) ECONOMIES
FOUR BELIEFS :
DO ANY COUNTRIES USECOMMUNISM TODAY ??
CUBA NORTH KOREA
ECONOMIC SYSTEMSCOMMUNISM
• OPERATES IN DIRECT CONTRAST TO CAPITALISM AND NEEDS A TOTALITARIAN FORM OF GOVERN -MENT TO MAINTAIN CONTROL
• CENTRAL GOVERNMENT MAKES ALL THE DECISIONS REGARDING PRODUCTION AND CONSUMPTION
• NO PRIVATE OWNERSHIP > THE ……
FOUR CHARACTERISTICS :Operates > Verb . To function effectively , or to work .
Synonym Related AntonymFunction Act StopPerform Conduct Close
Keep your car in good operating condition by changing the oil regularly .
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ECONOMIC SYSTEMSCOMMUNISM
• …. GOVERNMENT CONTROLS ALL PROPERTY , THE FACTORS OF PRO -DUCTION AND EVENLY SPREADS THE WEALTH
• USES COLLECTIVES - STATE OWNED FARMS AND FACTORIES THAT TRY TO MAXIMIZE PRODUCTIVITY THROUGH DIVISION OF LABOR AND SPECIALIZATION
FOUR CHARACTERISTICS :
ECONOMIC SYSTEMSCOMMUNISM
• TOTALITARIAN GOVERNMENT AND CENTRAL PLANNING ALWAYS FALLS VICTIM TO THE “ LAW OF INCREASING COSTS ” AS THEY MUST PRODUCE …….
ADVANTAGE :MAO
STALINUSUALLY PRODUCES GOOD SHORT TERM RESULTSDISADVANTAGES > THESE HAVE CAUSED EVERY ATTEMPT AT A COMMUNIST ECONOMY TO FAIL :
ECONOMIC SYSTEMSCOMMUNISM
• …. “ GUNS OVER BUTTER ”( MILITARY NOT CONSUMER GOODS ) TO CONTROL SOCIETY = MASSIVE INEFFICIENCY
• TOTALITARIANISM SEVERELY LIMITS FREEDOM = UNMOTIVATED WORKERS = POOR QUALITY PRODUCTS , LOW PRODUCTIVITY , INEFFICIENCY , SHORTAGES , AND LITTLE GROWTH
MAO
STALIN
DISADVANTAGES :
THE SOCIETY FAILS TO SUSTAIN
GROWTH AND ROTS FROM THE INSIDE
ECONOMIC SYSTEMSCOMMUNISM - IMAGINE THIS !
• THE SOVIET UNION :– LARGEST COUNTRY IN THE WORLD– POLITICALLY CONTROLLED 2 / 3 OF
THE WORLD– NEAR THE TOP IN NATURAL
RESOURCES– ENOUGH NUCELAR WEAPONS TO
DESTORY THE WORLD 10 X OVER
AFTER 69 YEARS IT COLLAPSED ON DECEMBER 21 , 1991 WITHOUT THE
LOSS OF A SINGLE LIFE OR SHOT BEING FIRED !!
“ A REGIME BASED ON FEAR MUST MAINTAIN INCREASINGLY TIGHT CONTROL OVER ITS POPULATION TO REMAIN IN POWER , AND SUCH CONTROL INEVITABLY TRIGGERS A PROCESS OF DECAY .”
~ NATAN SHRANSKY
ECONOMIC SYSTEMSHERE IS THE “ BOTTOM LINE ”
“ Capitalism and democracy extend the sphere of individual freedom . Socialism restricts it .
Capitalism and democracy attaches all possible value to each man ; socialism makes each man a mere agent , a mere number .
Capitalism and democracy have nothing in common with socialism except for one word : equality . But notice the difference !! While capitalism and democ -racy seek equality in liberty , socialism seeks equality in restraint and servitude ! ” ~ Alexis De Tocqueville
ECONOMIC SYSTEMSTHIS IS YOUR SOLEMN RESPONSIBILITY !!
“ THE BATTLE FOR FREEDOM MUST BE WON OVER AND OVER AGAIN !!
SOCIALISTS MUST BE WON OVER AND OVER AGAIN !!
SOCIALISTS MUST CONTINUALLY BE PERSUADED , OR DEFEATED , IF THEY , AND WE , ARE TO REMAIN FREE MEN ” !!
~ MILTON FRIEDMAN
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ECONOMIC SYSTEMS
• CAPITALISM CAN BE THREATENED AND DEBILITATED WITHOUT A VIOLENT OVERTHROW OF GOVERNMENT > RECKLESS LAWS AND SPENDING
• ANTI - CAPITALIST IMPULSES ARISE FROM A LACK OF EDUCATION ABOUT THE ROLE OF BUSINESS IN A CIVIL SOCIETY > NO BUSINESS = NO WEALTH TO REDISTRIBUTE
VERY IMPORTANT THINGS TO KEEP IN MIND !!Debilitate > Verb . To make feeble or weak .
Synonym Related AntonymCripple Undermine StrengthenDisable Harm
The army debilitated its enemy by putting them under siege .
ECONOMIC SYSTEMS
• BUSINESSES ARE NOT ANTISOCIAL > IN A HEALTHY CULTURE ( ADAPTING , GROWING , RAISING THE STANDARD OF LIVING , AND WITH UNEMPLOYMENT NOT OVER 5 % ) THEY WILL BE CREATING OVER 90 % OF THE JOBS
VERY IMPORTANT THINGS TO KEEP IN MIND !!
ECONOMIC SYSTEMS
CAPITALISM =
SOCIALISM
COMMUNISM
HERE IS THE “ BOTTOM LINE ”
=
=
ECONOMIC SYSTEMS
GOALS
ECONOMIC SYSTEMS
• EFFICENCY > MAXIMIZE THE RESOURCES
• ECONOMIC FREEDOM > FREEDOM FROM GOVERNMENT INTERVENTIONIN THE PRODUCTION AND DISTRI -BUTION OF GOODS AND SERVICES
• SECURITY AND PREDICTABILITY > RE -WARD AND PUNISHMENT FOR PERFORMANCE
5 GOALS :
Intervene / Intervention > Verb . To come between so as to hinder , modify , or restrict .
Synonym Related AntonymInterfere Divide Avoid
The police officer intervened to stop the fight .
ECONOMIC SYSTEMS
• EQUITY > EQUAL OPPORTUNITY AND TREATMENT
• GROWTH AND INNOVATION > THE ONLY WAY TO BOOST THE OVERALL STANDARD OF LIVING
5 GOALS :
WHICH SYSTEM DO YOU WANT TO LIVE UNDER ????
CAPITALISM OF COURSE !!!!
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CAPITALISM SOCIALISM
ECONOMIC SYSTEMS
• WHAT IS AN ECONOMIC SYSTEM ?• WHAT ARE THE MICRO AND MACRO
ECONOMIC QUESTIONS THAT MUST BE ANSWERED BY EVERY SOCIETY ?
• WHAT ARE THE KEYS TO UNDERSTANDING CONSUMPTION ?
• NAME THE TYPES OF ECONOMIC SYSTEMS
SUMMARY
ECONOMIC SYSTEMS
• WHAT ARE THE BELIEFS BEHIND , THE CHARACTERISTICS OF , AND THE ADVANTAGES / DISADVANTAGES OF EACH ECONOMIC SYSTEM
• WHAT HAS ALWAYS CAUSED THE FAILURE OF COMMUNISM ?
• NAME THE 5 ECONOMIC GOALS FOR A SOCIETY
SUMMARY
GOVERNMENT PROGRAMS
• MINIMIUM WAGE?• NSA?• SHERMAN ANTI-TRUST ACT?• PUBLIC SCHOOLS?• FANNIE MAE AND FREDDIE MAC?