Major Economic Institutions: Capitalism and Socialism
Economic Systems
• Through industrial revolution mainly in England during 1760 and 1830, our society
entered into industrial society.
• Before industrial revolution, it is called pre-industrial society.
• Basic types of economic system in pre-industrial society: hunting-and-gathering societies,
and agrarian societies.
• Basic types of economic system in industrial society: capitalism and socialism
Capitalism
• In preindustrial societies, land was virtually all wealth.
• In the industrial society, people need investment.
• Thus, bankers, industrialists, and those who have money became the most powerful
economic source.
• Capitalism is an economic system in which the means of production are held largely in
private hands.
• Its main incentive for economic activity is the accumulation of profits.