COMPARATIVE ECONOMIC SYSTEMS
WHAT DOES THIS MEAN?
the definitions of:
1. Traditional Economy
2. Market Economy
3. Command Economy
4. Mixed Economy
WHAT YOU NEED TO DO?
Compare the economies of historical societies by focusing on their economic sectors.
ECONOMIC DEFINITION
Economics is a Greek word meaning “management of the household.” In the ancient world,
this was considered women’s work and the word is feminine in Greek. But the world over, women
made the cloth and silk traded.
BASIC ECONOMICS
Economics is the study of scarcity and how societies make economic decisions. In life, wants are unlimited and resources are limited. The result is scarcity.
All societies make four basic economic decisions.
1. What to produce?
2. For whom to produce?
3. How much to produce?
4. How to distribute the produce?
ECONOMIC JOKE
What is the economic “Golden Rule”?
Answer: “He who has the ‘gold’ makes the rules!
WE ARE ALL MARXISTS!
Irrespective of his role as its founding father, Marx was the first philosopher or economist to see all societal structures in an economic perspective. He felt you could not understand a system
without understanding who owned the means (factors) of production.
CAPITALIST ECONOMISTS
Adam Smith was the founding father of capitalism or free market economics. John Maynard Keynes was the founder of fiscal
economics. The difference between the two was the role and influence of the state in economics.
FACTORS OF PRODUCTION
All Societies use the four factors of production to meet their needs.
1. Land
2. Labor
3. Capital
4. Entrepreneurship