GROUP ACTIVITY 1: THE BASIC ECONOMIC SYSTEMS OF THE WORLD
CATEGORIES CAPITALISM COMMUNISM
Ownership of Business Individuals control A communist economy is
businesses and properties in where a central government
capitalist economy. makes all economic
decisions.
Control of Markets Capitalist systems are Government owns most of
controlled by market forces the factors of production
where capital goods are and decides the allocation of
owned by businesses and resources and what
private individuals. products and services will be
provided.
Worker Incentives Highly motivated on account The central plan sets the
of proportional benefits. priorities for the production
of all goods and services.
That includes quotas and
price controls. Its goal is to
supply enough food,
housing, and other basics to
meet the needs of everyone
in the country.
Management of Private businesses and The government
Enterprises consumers control the owns monopoly businesses.
marketplace with little to no These are in industries
interference from the deemed essential to the
government. goals of the economy. That
includes finance, utilities,
and automotive. There is no
domestic competition in
these sectors.
SOCIALISM
Controlled by the state or
government.
The government—which
owns or controls much of
the economy's resources—
decides the what’s, when’s,
and how’s of production.
Socialism eliminates
incentives. Defenders
maintain that since it
eliminates the role of
capitalists and
entrepreneurs, workers
under socialism “produce
for themselves.” Therefore,
it is held, that socialism
actually maintains or even
stimulates incentives.
Relies on the use of social
property by individuals and
groups, where the condition
of use is the undertaking of
the highest performance.
GROUP 2
MIXED ECONOMY
Mixed economies typically
maintain private ownership
of the most means of
production, with the
government intervening
through regulations.
In mixed economies, the
government has some
control, while the rest is up
to supply and demand.
Driven by the motivation of
the self-interest of
individuals.
A mixed economic system
protects private property
and allows a level of
economic freedom in the
use of capital, but also
allows for governments to
interfere in economic
activities in order to achieve
social aims.
11-ORION
 GROUP ACTIVITY 1: THE BASIC ECONOMIC SYSTEMS OF THE WORLD
Forecast for 2020+ Increased economic growth
(decade) worldwide, while lifting a
substantive number of
people out of absolute
poverty.
Example Countries The United States, U. K. and
Germany are examples of
modern capitalist countries.
Command economies
struggle to produce the right
exports at global market
prices. It's challenging for
central planners to meet the
needs of the domestic
market. Meeting the needs
of international markets is
even more complex.
Belarus, China, Cuba, Iran,
Libya, North Korea and
Russia.
A centrally planned
economy without market
prices or profits, where the
property is owned by the
state, is a system without an
effective incentive
mechanism to direct
economic activity. By failing
to emphasize incentives,
socialism is a theory
inconsistent with human
nature and is therefore
doomed to fail.
Norway, Finland, Sweden,
Denmark, Great Britain,
Canada, the Netherlands,
Spain, Ireland, Belgium,
Switzerland, Australia,
Japan, and New Zealand.
GROUP 2
Ownership of business in
mixed economy
mixed economies typically
maintain private ownership
of the most means of
production, with the
government intervening
through regulations.
Iceland, Sweden, France, the
United Kingdom, the United
States, Russia, and China.
11-ORION