Traditional Economic System Major Features Subsistence Farming People

Traditional Economic System Major Features • Subsistence Farming - People produce most all of what they need to survive • Hunting & Gathering • Herding • Barter system- trade goods and services for other goods and services Example • Most cultures used this method for thousands of years • River Valley Civilizations • Pre- Industrial societies • Underdeveloped Countries today (LDC’s)

Feudal Economic System Major Features Political, ECONOMIC, and social system. • Manorialism – – land = wealth and power – Rigid Social Class system • (Peasants= labor; Nobles=protection) • LOYALTY and SERVICE • Isolated and self-sufficient • Little trade Example • Europe – – Middle Ages– 500 AD to 1500 AD • Feudal Japan – – 1200 AD to 1860 AD – Ends with Meiji Era modernization and industrialization

Mercantilist Economic System Major Features • • • 16 th & 18 th century Europe Crusades break down feudal system Nation’s wealth = gold & silver Colonies exist to serve the Mother Country Colonies send raw materials Mother Country manufactures goods and sells them to the colonies Monarch controls all trade Favorable balance of trade for the Mother Country’s wealth…. leads to capitalism!!! Example COMMERCIAL REVOLUTION (1500 -1700’S) • Spain • Portugal • France • England • Holland

Capitalist Economic System Major Features FREE MARKET ECONOMY • Private ownership of business – -Free Enterprise Examples: • Adam Smith (Wealth of Nations, 1776) – Laissez-Faire Capitalism – Gov’t “HANDS OFF” the economy – Britain 1750’s …beginning of the Industrial Rev. • Supply and Demand; Consumers determine price, etc. • Entrepreneur- starts business on • USA economy today their own • Stockholders • Competition

Communist Economic System (Radical Socialism; Scientific Socialism) Major Features: COMMAND ECONOMY • All economic decisions made by gov’t planners • Gov’t owns all property • Gov’t controls all production and distribution of goods Examples: • Karl Marx (Communist Manifesto, 1848) – Workers of the world unite… overthrow capitalists – Share resources… EQUALITY for all! – NEVER BEEN TRIED!!! • • USSR - Lenin 1917 China – Mao 1949 - 1978 Cuba- Castro 1959 Vietnam 1975 (after the war)…today • North Korea 1948…today

(DEMOCRATIC) Major Features: MIXED ECONOMY Some gov’t ownership + Somer private ownership • Gov’t gets involved in economy to protect workers’ rights… • National Health Care System, etc. SOCIALISM Examples: • CHINA (1978 -present) – – – Deng Xiaoping 4 Modernizations some capitalist reforms introduced • European Nations – Scandinavian countries…Sweden, Norway, etc.

MODERN ECONOMIC SYSTEMS = POST INDUSTRIAL REVOLUTION ECONOMIC SYSTEMS