CAPITALISM

An economic system based on a free market, open competition, profit motive and private ownership of the means of production. The market determines the type, quantity, and price of goods.

The government is to avoid interfering in the economy. The United States has a capitalistic system.

COMMUNISM

An economic system in which the means of production are owned and operated for the public by the government. The government determines the type, quantity, and price of goods produced. Communism promises to provide for everyone's needs and to have no social classes.

Ideally government would not be necessary

SOCIALISM

The economic system which advocates government ownership of the basic means of production. The government not only has the political power, but it has the control necessary to produce and distribute the goods. Under socialism there is often individual ownership of certain industries and businesses, whereas under communism everything is operated and controlled by the government.

Economic System Characteristics

 
The three systems generally considered the major economic systems in the world are: Capitalism, Socialism, and Communism.

The major characteristics of CAPITALISM are:

Private ownership of property and of the means of production is the rule. Individuals or groups of individuals can invest money in businesses or start their own businesses (free enterprise).

Owners and investors take risks, but make and keep profits.  The type, quantity and price of goods and services produced are determined in the marketplace.

Hard work, the desire to compete, and willingness to try new ideas are important for success.

Government is to avoid interfering in the economy.
 
 

The major characteristics of SOCIALISM are:

Public (government) ownership of the major means of production and private ownership  of the rest exist together.

Individuals or groups of individuals can invest money in certain businesses or start certain types of businesses.

Government provides for the general welfare of its people.
 
Government plays an active role in the economy wherever and whenever necessary to ensure economic strength and social justice.
 
 

The major characteristics of COMMUNISM are:

Public (government) ownership of the means of production is the rule.  All businesses are owned by the government and are to be operated for the benefit of the people.

People must cooperate and do their fair share of work.  The government determines THE type, quantity and price of goods and services produced.
 
All people are equal and provided with what they need.  Eventually, there will be no social classes and government will not be necessary.
 
 

The three major economic systems in the world, then, are capitalism, socialism, and communism.
 
 
 

The United States practices its form of capitalism.

Most of the nations in the world practice some form of socialism.

Although no government truly practices communism, some nations describe their economy as communist because that is their ultimate goal.
 

* * * Pure capitalism, socialism, and communism exist only in theory. * * *

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