Economic PhilosophiesEconomic Philosophies

Capitalism and Communism

What is Capitalism?What is Capitalism?

A)“..An economic system in which A)“..An economic system in which money is invested in business money is invested in business ventures with the goal of making a ventures with the goal of making a profit”profit”

• B) Role of market competition B) Role of market competition and entrepreneurial abilitiesand entrepreneurial abilities

• C)Principles of laissez faire “let C)Principles of laissez faire “let people do as they please”people do as they please”

Capitalism and its Impacts

A)• The Wealth of Nations Adam Smith-Adam Smith-defended free economy, claimed that defended free economy, claimed that government need not interfere in the government need not interfere in the economy. economy.

B)• Role of market competition and entrepreneurial abilities

Adam Smith – Wealth of NationsAdam Smith – Wealth of Nations

C)• Impact on standard of living and the growth of the middle class

D)• Dissatisfaction with poor working conditions and the unequal distribution of wealth in society

•

Stereotype of the Factory Owner

Stereotype of the Factory Owner

• What were some theories opposed to capitalism?

• Tocqueville – French Philosopher

• Consider what is happening among the working classes. Do you not see spreading among them……. Ideas not only to overturn gov’t, but society itself?

starter activity

‘The Silent Highwayman’, Punch magazine, 1858. What is the artist trying to say about living conditions in Victorian London?

• Socialism and communism

A)• Karl Marx’s Communist Manifesto (written with Friedrich Engels) and Das Capital

•

B)• Response to the injustices of capitalism

C)• Importance of redistribution of wealth to the communists

The Socialists: Utopians & Marxists The Socialists: Utopians & Marxists

People as a society would operate and own People as a society would operate and own thethemeans of production, not individuals.means of production, not individuals.

Their goal was a society that benefited Their goal was a society that benefited everyone, not just a rich, well-connected few.everyone, not just a rich, well-connected few.

Tried to build perfect communities [utopias].Tried to build perfect communities [utopias].

SocialismSocialism

A)Factors of production are A)Factors of production are owned by the public and owned by the public and operate for the welfare of all. operate for the welfare of all.

B)Grew out of optimistic view of B)Grew out of optimistic view of human nature and response to human nature and response to capitalismcapitalism

CommunismCommunism

• A form of complete socialism in A form of complete socialism in which the means of productionwhich the means of production—all land, mines, factories, —all land, mines, factories, railroads, and businesses—railroads, and businesses—would be owned by all people.would be owned by all people.

• Communist Manifesto

• Karl Marx-Marxism,Karl Marx-Marxism,

• employers=“haves”=bourgeoisie; employers=“haves”=bourgeoisie; employees=“have-nots”=proletariat; employees=“have-nots”=proletariat;

• ““Workingmen of all countries, unite.” Workingmen of all countries, unite.” • ““The Proletariat has nothing to lose but their The Proletariat has nothing to lose but their

chains”chains”

• Distribute wealth back out to communistDistribute wealth back out to communist

Understanding 1Understanding 1

• Capitalism and market competition fueled the Industrial Revolution. Wealth increased the standard of living for some.

Understanding 2Understanding 2

• Social dislocations associated with capitalism produced a range of economic and political ideas, including socialism and communism.

Exit QuizExit Quiz

• 1. Who was the author of “The Wealth of Nations”?

• 2. It stated that the government should not ______ with the economy.

• 3. Karl Marx authored The _________ _________.

4. Name two theories that opposed capitalism

• 5. Socialism was a philosophy that responded to the ___________ or wrong doings of capitalism.

• 6. The form of socialism in which the socialism in which the means of production of would controlled means of production of would controlled

by the people.by the people.

• 7. Capitalism and market competition fueled the ________ ___________.

• 8. ________ is an economic philosophy that uses the principles of laissez-faire.

• 9. From what you have learned today, and the economic situation the U.S. has been going through, would the U.S., be better off as a Capitalist country, or a Socialist country?

From Industrial Rev. QuizFrom Industrial Rev. Quiz• 1. Which leader used guerrilla warfare to

unite southern Italian states before turning them over to the king?

A) Napoleon III

B) Otto von Bismarck

C) Count Cavour

D) Giuseppe Garibaldi

• 2. Otto von Bismarck’s actions in unifying Germany were seen as an example of this strategy, which justifies all means to achieve and hold power.

A) laissez-faire

B) Manifest Destiny

C) guerrilla warfare

D) Realpolitik

3. The final stage in German unification was:

A) the Seven Weeks War.

B) the Danish Rebellion.

C) World War I.

D) the Franco-Prussian War.

4) All of these are reason why the Industrial Revolution began in England except?

• A) Land• B) Money• C) Socialism• D) Population

• 5. How did the Enclosure movement lead to industrialization?

• A) Improved the output on farms• B) Land owners sold land to Factory owners for

profit• C) Enclosed land forced many people to move from

rural areas to the city looking for work• D) Gave more people free time to invent new

machinery

• 6. What did Otto Van Bismarck policy of “realpolitik” state?

• A) A leader should listen to the will of the people• B) Candidates for office should tell the truth• C) Military power should be used as a last resort• D) Justify all means to achieve and hold power

• 7. During the unification of Italy the Papal States were

• A) Replacing one pope and voting in another pope• B) join willingly from the beginning• C) The last to join• D) Fighting a violent revolt against the Italian states

8. Adam Smith’s Wealth Of Nations supported the idea of a

• A) State controlled economy• B) Free market economy• C) Communist takeover of Farming• D) Retarding of the Entrepreneur spirit

9. What is laissez- faire economics?

A) No gov’t interference in the economy

B) Some industries should be owned by the state

C) Economy should be controlled by the gov’t

D) Bourgeoisie should be controlled at a higher rate

10. The Communist Manifesto was written by

A) Adam Smith

B) John Locke

C) Karl Marx

D) Vladimir Lenin

11. All of these are parts of Communism except

A) Rise of Proletariat

B) Redistribution of wealth to the poor

C) Gov’t control of the economy

D) Laissez – Faire economy

• 12. Who helped Karl Marx write the “Communist Manifesto”?

• A) Adam Smith• B) Frederick Engels• C) John Locke• D) Thomas Hobbes

13. One negative consequence of Capitalism was

A) Radical governments taking over

B) Formation of Communism in Europe

C) Unequal distribution of wealth

D) Movement of jobs to the city

14. Socialism and Communism believes the economy is best managed by

A) A gov’t controlled by the workersB) The marketC) A gov’t controlled by factory workersD) Bankers

15. How did the Industrial Revolution influence Imperialism?

A) Europeans felt sorry for their “Little Brothers”B) Europeans wanted a better environmentC) It created a need for new landD) It created a need for raw materials