Review for Quiz

Know the following terms for a multiple

choice quiz: Enclosures, Jethro Tull, Eli
Whitney, Urbanization, Factors of
Production, Manchester England, Unions,
Lassiez Faire, Natural Resources, Spread of
the I.R., Karl Marx, Adam Smith,

History Island!
A few weeks ago a plane carrying 300
World History students crashed on a
deserted island. We have already written
a Constitution and built a capital, but now
we face the critical issue of economics:
that is, how to divide up scarce resources.
The resources we need are food (fish,
coconuts, bananas, etc.), water, wood for
fires and huts, stones for tools, and
materials for clothing.

 One group proposes that we gather all the available

resources together and put the government in charge
of giving them out to the people. That way,
everyone is sure to get what they need, and nobody
will have too much or too little.
Another group thinks this is a terrible idea. They
think everyone should go out on their own and
gather whatever resources they can find. Then it is
up to each individual to do whatever they want with
their resources (keep them, trade them, sell them)
Quick write: Which system do you think is best?
Explain your choice in a short paragraph

Key Words
Capitalism
Communism
Competition
Greed
Every man for
himself

Cooperation
Altruism (loyalty)
Were all in this
together

Human Nature
Capitalism
Communism
Realistic
people are
naturally selfish;
competition brings
out the best in
people.

Idealistic
people can learn
to share;
cooperation
brings out the
best in people.

Who owns property?

Capitalism
Communism
Private ownership;
Public ownership;
almost everything is
almost everything
is owned by the
private property.
government. They
You can do
decide how it
whatever you want
should
be
with your stuff.
distributed to
benefit everyone.

Who started it?

Capitalism
Communism
Adam Smith,
Scotland, 1700s
Wealth of
Nations

Karl Marx,
Germany, 1800s
The Communist
Manifesto

Adam Smiths
Three natural laws of economics
Law of self-interest

Law of competition

Law of supply and demand

 Economic system where the factors

of production (land, labor, capital)
are privately owned and money is
invested to make a profit.
Laissez-faire supporters opposed
government efforts to help poor
workerslet the free market
operate.

 Economic system where the

factors of production are
owned by the public and
operate for the welfare of all.
Government control and
planning would help end
poverty and promote equality.

communism

Radical type of socialism

Karl Marx

Role of Government
Capitalism
Communism
Very small.
Government does
not tell private
businesses what to
do. People make
their own
economic choices.

Very large. Govt.

controls all
aspects of the
economy what
job you have, how
much you make,
what each factory
will produce, etc.

Social Classes
Capitalism
Communism
Small upper
class, medium
middle class,
large lower class.
Huge gap in
wealth between
the rich and poor.

In theory, no rich
or poor; everyone
is equal. (In
practice, a small,
wealthy upper
class controls the
government!)

Extreme View
Capitalism
Communism
Laissez Faire
no government,
100% private
property.

Marxs Utopia
also no
government,
people have
learned to share
everything. No
private property.

Capitalism
Pros
Cons
Big incentive to
work hard
Large variety of
products available
More innovation
Economic freedom

Class envy
Plutocracy
Poor suffer
Unemployment

Communism
Pros

No class envy
No Plutocracy
Poor dont suffer
Full employment

Cons
No incentive to
work hard
No variety of
products
available
Less innovation
No Economic
freedom

Exploitation
Capitalism
Communism
The poor are often
exploited by the rich

The people are

often exploited by
the government

Unions
Workers joined together
in voluntary labor
associations. Why?
Collective bargaining
Strikerefuse to work

 Who would prefer Capitalism? Socialism?

Factory worker
Shop owner
See chart pg. 303
Factory owner
Unemployed artisan (a worker who practices a trade or
handicraft)

The Economic Spectrum

Pure
Communism

Pure
Capitalism

Socialism

N. Korea

China
Cuba

Canada
Norway

USA
in
2009

Britain
and USA
in 1899