Economic SystemsEconomic SystemsPresented By:Presented By:M SajjadM SajjadRoll# 907Roll# 907Bs (Hons)Bs (Hons)GeographyGeographyPH# 03346544625PH# 03346544625

ContentsContents

What is Economic System?What is Economic System? Factors of productionFactors of production Why Economic systems?Why Economic systems? Types of Economic systemsTypes of Economic systems

CapitalismCapitalism CommunismCommunism SocialismSocialism

Traditional Economic systemTraditional Economic system

What is Economic System?What is Economic System? An economic system is the combination of

the various agencies, entities (or even sectors as described by some authors) that provide the economic structure that defines the social community.

Oil & fuel

Land

Doctors

Technology

Factors of ProductionFactors of Production Economic ResourcesEconomic Resources

Natural ResourcesNatural Resources – raw materials found in – raw materials found in nature that are used to produce goodsnature that are used to produce goods

Human ResourcesHuman Resources – people’s knowledge, – people’s knowledge, efforts, and skills used in their workefforts, and skills used in their work

Capital ResourcesCapital Resources – used to produce goods – used to produce goods and services (buildings, materials, and and services (buildings, materials, and equipment)equipment)

Industrial ResourcesIndustrial Resources - recognize the need - recognize the need for new goods or servicefor new goods or service

Why Economic Systems?Why Economic Systems? Nations use economic systems to Nations use economic systems to

determine how to use their limited determine how to use their limited resources effectively.resources effectively.

Primary goal of an economic system Primary goal of an economic system is to provide people with a minimum is to provide people with a minimum standard of living, or quality of life.standard of living, or quality of life.

Types of Economic systemsTypes of Economic systems

CapitalismCapitalism“Economic system where the means of production

are owned by private individuals.”The term capitalism was first introduced in the mid-19th century by Karl Marx, the founder of communism

Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved.

Government control and interference at a minimum level Private ownership of natural resources allowed

CHARACTERISTICS OF CAPITALISM CHARACTERISTICS OF CAPITALISM

landland and capital are privately owned. and capital are privately owned. CapitalCapital in this sense means the buildings, machines, and in this sense means the buildings, machines, and

other equipment used to produce goods and services that other equipment used to produce goods and services that are ultimately consumed.are ultimately consumed.

Economic activity Economic activity is organized through the interaction of is organized through the interaction of buyers and sellers in markets.buyers and sellers in markets.

OwnersOwners of land and capital are free to follow their own self- of land and capital are free to follow their own self-interests in seeking maximum gain from the use of their interests in seeking maximum gain from the use of their resources and labor in production.resources and labor in production.

Consumers Consumers are free to spend their incomes in ways that are free to spend their incomes in ways that they believe will yield the greatest satisfaction. they believe will yield the greatest satisfaction.

Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reservedMicrosoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved..

Capitalism Capitalism

Types of Economic SystemsTypes of Economic SystemsCommunismCommunism““Economic system in which all people enjoy Economic system in which all people enjoy

equal social and economic status.”equal social and economic status.”(Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved.)(Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved.)

System of social and political organization System of social and political organization that was a major force in world politics for that was a major force in world politics for much of the 20th centurymuch of the 20th centuryKarl Marx and Friedrich Engels Karl Marx and Friedrich Engels

CHARACTERISTICS OF COMMUNISM CHARACTERISTICS OF COMMUNISM

Economic system in which means of production is owned and controlled by the government.

Government plans production by determining what produced and what quantity

Production determined by need not profit. Overproduction, duplication of effort, and

depressions avoided Competition is replaced by cooperation and

planning.

COMMUNISMCOMMUNISM

Types of Economic SystemsTypes of Economic Systems

SocialismSocialism“The term "socialism" was created by Henri de

Saint-Simon, a founder of ideal socialism. The term "socialism" was created to contrast against

the liberal policy of "individualism.“

The socialist doctrine demands state ownership and The socialist doctrine demands state ownership and control of the fundamental means of production, control of the fundamental means of production, distribution of wealth, to be achieved by distribution of wealth, to be achieved by reconstruction of the existing capitalist or other reconstruction of the existing capitalist or other political system of a country through peaceful, political system of a country through peaceful, democratic, and parliamentary means. democratic, and parliamentary means. Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved.Microsoft ® Encarta ® Encyclopedia 2005 © 1993-2004 Microsoft Corporation. All rights reserved.

SOCIALISM SOCIALISM

Traditional Economic systemTraditional Economic system Found in rural, under-Found in rural, under-

developed countries–developed countries– VanuatuVanuatu Pygmies of CongoPygmies of Congo Eskimos & Indian Eskimos & Indian

tribes tribes BelarusBelarus

Customs govern the Customs govern the economic decisions economic decisions that are made that are made

Farming, hunting and Farming, hunting and gathering are done gathering are done the same way as the the same way as the generation beforegeneration before

Economic activities are Economic activities are centered around the centered around the family or ethnic unit family or ethnic unit

Men and women are Men and women are given different given different economic roles and economic roles and tasks tasks

AdvantagesAdvantages: people : people have specific roles; have specific roles; security in the way security in the way things are donethings are done

DisadvantagesDisadvantages: : Technology is not used; Technology is not used; difficult to improvedifficult to improve

Traditional Economic SystemTraditional Economic System

GDP (Gross Domestic Product) per capita

References References http://www.economywatch.com/world_economy/world-economic-indicators/ty

pe-of-economic-system.html

http://en.wikipedia.org/wiki/Capitalism http://en.wikipedia.org/wiki/Capitalism

http://en.wikipedia.org/wiki/Communism http://en.wikipedia.org/wiki/Communism

http://en.wikipedia.org/wiki/Socialismhttp://en.wikipedia.org/wiki/Socialism

http://www.slideshare.net/RachalJames/economic-systemsppt-edited-http://www.slideshare.net/RachalJames/economic-systemsppt-edited-presentationpresentation

http://www.floatingsheep.org/2010/04/political-cyberscapes-ii-capitalism.htmlhttp://www.floatingsheep.org/2010/04/political-cyberscapes-ii-capitalism.html

http://conservatoons.deviantart.com/art/Obama-s-Pro-Socialist-logo-http://conservatoons.deviantart.com/art/Obama-s-Pro-Socialist-logo-198812751 198812751

Thanks for Thanks for Patience Patience