Economic Systems Flashcards
Define capitalism.
A system of production whereby business owners (capitalists) produce goods / services in order to make a profit.
When did capitalism emerge?
With the advent of industrialism.
Which concept is central to capitalism and why?
Private property, to distinguish who owns what
Under capitalism, who owns the business, the tools of production and the finished product?
The capitalist.
Under capitalism, do workers employed by the capitalist own the business, the tools of production and / or the finished product?
No, they do not own anything even though they did all the work
Under capitalism, what do workers get in exchange for their labour?
Wages
Under capitalism, how are goods / services produced distributed / sold?
On the market
Define market.
A place where buyers and sellers come together to facilitate the exchange of goods / services.
Define free market.
A market in which prices are determined by unrestricted competition between privately owned businesses.
Define socialism.
A system of production whereby workers collectively own the business, the tools of production and the finished product.
Under socialism, is there private ownership of businesses?
No.
Under socialism, who makes a profit?
The workers, who often re-invest it back into the business
Under socialism, how are goods / services produced distributed / sold?
On the market.
What is another name for communism?
A command economy.
Define communism.
A system of production in which all property is owned by the community and each person contributes and receives according to their ability and needs
Under communism, is there private property?
No.
Under communism, who owns the tools of production?
The community / society as a whole
Under communism, how are goods / services produced distributed / sold?
There is a central planner who organises production and distributes goods / services to consumers based on need
Under communism, who makes a profit?
No one
Under capitalism, who makes a profit?
The business owner (capitalist)
