CHAPTER 22 Section 1: Capitalism Section 2: Socialism Section 3
Transcript of CHAPTER 22 Section 1: Capitalism Section 2: Socialism Section 3
HOLT, RINEHART AND WINSTON
HOLT
Section 1: Capitalism Section 2: Socialism Section 3: Communism
CHAPTER 22
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 1: Capitalism
Objectives: What are the four factors of production? In what way is a free-market economy an essential
aspect of capitalism? How do supply and demand, competition, and the
profit motive affect capitalist economies? How does the U.S. economy differ from Adam
Smith’s ideas of capitalism?
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 1: Capitalism
The four factors of production: natural resources human resources capital resources, such as money and equipment entrepreneurship
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 1: Capitalism
How a free-market economy is an essential aspect of capitalism: allows self-interest to drive production and
consumption provides for little government involvement on what is
produced or how or for whom it is produced provides for consumers choice in the purchase goods
and services, which therefore affects how goods and services are bought or sold
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 1: Capitalism
Effects on capitalist economies: supply and demand—affects product price levels and
therefore competition and profits competition—pressures producers to improve their
products to attract buyers profit motive—drives producers to maintain high
profits to encourage investment
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 1: Capitalism
How the U.S. economy differs from Adam Smith’s ideas of capitalism: Smith argued against government intervention. The U.S. economy encourages growth through fiscal
policy and is based on a limited role of the government.
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 2: Socialism
Objectives: What are some of the basic principles of socialism? What are some countries that have strong socialist
traditions? What is a welfare state?
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 2: Socialism
Basic principles of socialism: Redistributing wealth throughout society reduces
inequalities in the standard of living. The government or the people as a whole controls the
factors of production and distribution of goods.
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 2: Socialism
Some countries that have strong socialist traditions: Israel Sweden Australia
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 2: Socialism
A welfare state is a government that provides widespread social services paid for by taxes.
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 3: Communism
Objectives: What are some of the basic principles of communism
as described by Karl Marx? How did Vladimir Lenin’s concept of communism
differ from that of Marx? What changes occurred in the Soviet Union under
Joseph Stalin? Why did the Soviet Union eventually dissolve?
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 3: Communism
Some basic principles of communism as described by Karl Marx: A classless society would lead to economic equality. Workers would overtake and control the means of
production. With a classless society, government would become
unnecessary and disappear.
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 3: Communism
How Vladimir Lenin’s concept of communism differed from that of Marx: emphasized politics over economics did not believe that a country had to be fully
industrialized before revolution could occur created a dictatorship over the proletariat rather than a
dictatorship of the proletariat
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 3: Communism
Changes in the Soviet Union under Joseph Stalin: used force in the collectivization of agriculture to
institute his Five-Year Plans focused on developing heavy industry, science, and
technology
HOLT
HOLT, RINEHART AND WINSTON
Comparing Political and Economic Systems
Section 3: Communism
Why the Soviet Union failed: The economy left by communism was too weak to compete in
the global market. Soviet citizens began to question the effectiveness of
communism because the standard of living for most Soviet citizens increased more slowly than in major free-market nations.
Governments that the Soviet Union set up in Eastern Europe had failed.
The reforms introduced by Gorbachev helped the Soviet people to see what life might be like without communism.
HOLT, RINEHART AND WINSTON
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1. What are the four basic principles on which capitalist economies are based?
2. What is the government’s role in a capitalist economy?
3. Name three characteristics of a socialist economy.
4. On what principles is socialism based?
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5. What two concepts are central to Marx’s theory of social change?
6. Why did Lenin establish a communist dictatorship after the Russian Revolution?