Capitalism
Free Enterprise – individuals own and operate majority of businesses providing goods and services
United States
Japan
Australia
Canada
Invisible Hand -- When self-directed gain leads to social and economic benefits for the whole community.
Basically, this meant that a person working hard to make money for his or her own PERSONAL INTEREST would (like an invisible hand) also BENEFIT OTHERS.
Basic Assumptions for Adam Smith’s Laissez-Faire Capitalism
Economic freedom ensures the existence of a free market economy
Free Market -- Decisions about what and how much to produce are made by the market.
Consumers send signals about what they like and how they like it.
Price tells companies how much of a product they should produce.
If something is wanted but hard to get, the price will rise until more products are available
Command economies
Economic systems in which the government decides what will be produced, how it will be produced, who gets what is produced, and who owns and controls the major factors of production
Socialism
Communism