Economic Theories

By: Nicole Spence, Zach Wyum, and Riley Powers.

Communism

Communism is a form of government where all property is public and owned by the government. People work and are given things from the government based on their needs. Wealth is also divided equally among the citizens of the society. All means of production is communism are controlled and owned by the government. The government also makes all economic decisions as it is what is considered a command economy. The government determines what will be produced, how much of it will be produced, and how the goods will be distributed. In a communist society there is no motive for profit or competition because the government equally distributes goods and money throughout the country. Also, there is no private business everything is ran and controlled by the government which eliminates competition. An example of a communist country today is Cuba.

Socialism

Socialism is a less extreme version of Communism. Most land and factories are owned by the public and regulated by the government. The government makes most/all economic decisions when it comes to what and how much an industry will produce. The government attempts to equally distribute wealth and economic opportunity. There is not much profit motive in socialism because everyone is given equal opportunity, people in socialism tend to work harder than those in capitalism because it is believed that in socialism the profit will benefit everyone around, not just the owner of the company. Ireland and Denmark are both examples of Socialist countries today.

Capitalism

Capitalism or also know as the market system is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. In a Capitalist country the means of production are usually privately owned. The government enforces the rules of law by which the economy operates, but it is restricted from interfering with the market. This is called laissez-faire capitalism this words means let it be. There is always competition in capitalism since each business is owned privately there is always competition for who can make more money and trade more goods. A example of capitalist country is Europe.