INSTITUTIONSECONOMIC

ECONOMIC SYSTEMS

CAPITALISM

CAPITALISMan economic system in which the means of production are held largely in private hands and the main incentive for economic activity is the accumulation of profits.

STAGESIndustrial Revolution

Laissez-faire (let them do)

Modern day

capitalism

MAIN FEATURESPrivate ownershipMaximization of profits Government regulation of economic relations

Tolerates monopolistic

SOCIOLOGICAL IMAGINATION

Which aspects of capitalism do you personally appreciate?

Which do you find worrisome?

SOCIALISM

SOCIALISMthe means of production and distribution in a society are collectively rather than privately owned.

basic objective is to meet people’s needs rather than to maximize profits

SOCIALISMIn theory, the wealth of the people as a collectivity is used to provide health care, housing, education, and

other key services to each individual and family

COMMUNISM

COMMUNISMan economic system under which all property is communally owned and no social distinctions are made on the basis of people’s ability to produce

CPC COUNTRIESSoviet Union, the People’s Republic of China,

Vietnam, Cuba, and nations in Eastern EuropeCommunist Leaders:

Lenin Joseph Stalin

Fidel Castro

Mao Zedong

Ho Chi Minh

Ernesto “Che”

Guevarra

INFORMAL ECONOMY

INFORMAL ECONOMYTransfers of money, goods, or services take place but

are not reported to the government.Participants in this type of economy avoid taxes and

government regulationFunctionalists contend that bureaucratic regulations

sometimes contribute to the rise of an informal, or underground, economy.

Year: 2002Source: Forbes and World Bank

FIVE LARGEST ECONOMIES

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