3. What did the world look like
before capitalism?
• Traditional economies existed in
different forms around the world.
Characterized by:
1. Based on hunting, gathering, or
agriculture
2. Use or barter
3. Limited trade, if any, with other
communities
4.
5. What did the world look like
before capitalism?
• Around the time of the Middle Ages (500 -1500
C.E.), while the majority of people remain as
poor laborers/farmers, some merchants rise to
power.
• Merchants invest their money on trade ventures,
but there is no uniformity (sometimes they
would barter, other times pay in gold/silver)
• The number of people involved in profit making
is very small and restricted.
6.
7. What did the world look like
before capitalism?
• Mercantile economies developed as
kingdoms grew larger, and as modern
nations started to form. (Mercantilism)
• In a sense, it’s an early form of capitalism.
• Based on the idea that there is only so
much wealth in the world, and that powerful
nations should attempt to gain as much
wealth (through trade, colonization) as
possible.
8. What did the world look like
before capitalism?
• Mercantile economies
seek wealth in the form
of bullion - that is solid
gold and silver.
• The goal of Mercantilism
is to export as much as
possible, allowing the
nation to acquire more
gold and silver.
9.
10. MERCANTILISM VS. CAPITALISM
• Priority: good of the nation • Priority: good of the individual
• Very heavy government
regulation of trade: economic
ventures should serve the good
of the country
• Some government regulation of
trade to protect individual rights.
(As individuals seek wealth, the
county as a whole will naturally
become more wealthy)
• Advocates monopoly formation
(monopolies closely working
with the government)
• Advocates a competitive
business environment (and
often tries to prevent
monopoly formation)
• Discourages consumer
spending because it can cause
money to flow to other
countries
• Encourages consumer spending
because the process of buying
and selling makes the economy
grow
11. The Industrial Revolution
…was the start of capitalism as we know it
today. 1800s in Great Britain: new technology
allowed investors to create factories that could
produce more goods and cheaper goods than
individual craftspeople could produce.
12.
13. The Industrial Revolution
• Wealth begins to develop in non-noble families, and
the ability to increase wealth become easier than
in the past
• Due to increase in factories and products,
consumerism increases:
14. The Industrial Revolution
Industrialization spread throughout
Europe, and eventually to
European colonies/former colonies
all over the world. Suddenly, a new
culture is created where business
owners accumulate wealth,
laborers work in their businesses,
and the workers themselves keep
the whole system going by
spending their wages on the
products that are produced by all
of the existing businesses.
16. How have people
reacted against
capitalism?
• Laborers see the reality
of their situation: that
with the wages they
receive, they will never
have enough money to
become “investors” of
wealth.
• They notice that very,
very few people actually
hold most of societies’
wealth.
17. How have people reacted against capitalism?
• The French Revolution (1789): An attempt to overthrow
feudalism in France (a system in which noblemen control
land, wealth, and power). The monarchy was overthrown,
and thousands of nobles were executed.
• The French economy before the revolution was not truly
capitalist (it was feudal), but this revolution against the
wealthy inspired future communist revolutions.
18. • The father of communist
thought.
• German philosopher who
lived 1818 - 1883
• He saw the world like this:
Karl Marx
“Capitalists”
(bourgeoisie)
Workers
(proletariat)
Wealth
$
19. societies progress through
class struggle.
Karl Marx:
Time
Capitalism … Socialism … Communism!
1. Tensions between rich and poor within capitalism will lead to a
collapse of that system as workers begin to demand more and
more rights over time.
2. Capitalist societies gradually progress to become socialist
societies, which, as tensions between rich and poor continue,
will turn into communist societies.
3. Marx’s theoretical communist society was a society without
class, where everyone has equal rights, opportunities, and
wealth.
20.
21. Vladimir Lenin created
“communist” governments
as we know them today by
promoting the idea of a
vanguard party: a political
party that would start a
revolution in order to
forcibly push a society from
a state of capitalism/
socialism to the perfect
state of communism.
His party overthrew
Imperial Russia and created
the U.S.S.R.
Revolution?
22. Union of Soviet Socialist Republics
The U.S.S.R. believed it was a socialist state in the
process of becoming a pure communist state. This is
why Western nations referred to this former country
as a “communist state” or “communist nation.” No
country in the world has reached Karl Marx’s utopian
state of pure communism.
!
!
!
Although they technically have an extreme form of
socialism, countries that we call “communist” today
include: Cuba, Laos, Vietnam, North Korea, and China.
23. “Planned” “Unplanned”
Command Free Market
Communism Socialism Capitalism
Understanding the difference between terms:
Please remember that forms of communism, socialism, and capitalism exist
in the real world. “Command” refers to government command, or control,
of the economy. “Free Market” refers to how free from government
control the market is: in other words, how much the economy is allowed to
respond freely to consumer demand. All systems that exist today are a
mixture of command (planned) and free market (unplanned).
It is often hard to agree on which “ism” a country should be called.
