Adam Smith vs Karl Marx

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Adam Smith vs Karl Marx

• Whos the man with the economic plan?

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Adam Smith

• individuals own the means of production
  (factories, machines, land) and reinvest profits
  as capital to expand business
• Capital wealth that is invested in order to
  create more wealth

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Adam Smith- The Wealth of Nations

• Laissez-faire- (let do) non-interference of the
  government in business
• HANDS
  OFF!

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Capitalism

• Free Market Economy One in which consumer
  choice, the law of supply and demand and
  competition drives companies decisions regarding
  what products to produce and the prices of those
  products.

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Adam Smith3 Laws

• Law of Competition

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Law of Self Interest
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(No Transcript)
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Law of Supply and Demand
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Socialism

• a theory or system of social organization that
  promotes
• that the community as a whole should own and
  control of the means of production (factories /
  land)
• profits from production should be divided amongst
  the community as a whole

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Socialism Continued

• Believe capitalist take advantage of workers
• Community or state (govt) must act to protect
  workers
• Unequal distribution of wealth is unfair (caused
  by capitalism)
• Goods should be divided according to each
  persons needs

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Karl Marx and Freidrich EngelsThe Communist
Manifesto
Haves Have-nots
Patrician Plebeian
Noble Serf
1st 2nd Estates 3rd Estate
Bourgeoisie Proletariat
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The New Struggle

• Bourgeoisie owners of business, capital and
  means of production
• Proletariat working classes, own nothing

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Karl Marx (and F. Engels)The Communist Manifesto

• Radical Socialism or Marxism
• Workers will seize control of the government and
  businesses

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Dictatorship of the Proletariat

• Workers would take control of the government

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Then what

• redistribute profits equally
• own all property in common (no private property)

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Socialism ? Communism

• From each according to his ability, to each
  according to his need (all must work, all share
  in profits)
• Economic equality (no more classes)
• No government or police would be needed in a
  community of equals where all is shared
  government would fade away ? Communism

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Communist Countries Today

• Communism Dictatorship
• never moved passed Marxs Dictatorship of the
  Proletariat stage
• Examples
• Former USSR (Soviet Union)
• China
• Cuba
• North Korea

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Socialist Countries Today

• Tend to be democracies
• Major Industries owned by the people (Railways,
  Telephones, TV stations etc.)
• Government taxes provide benefits to all citizens
  (healthcare, free higher education, pensions
  (retirement), Social security
• Examples
• France, Canada, England

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What system would they support?

• For the following people decide whether they
  would support
• Socialists - All means of production and all
  profits are owned by the community together
  (Owen, Marx)
• Laissez-Faire Capitalism - Government should keep
  its hands off business and allow owners to act in
  their own self interest to seek profit (Smith,
  Malthus and Ricardo)

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Donald Trump

• If you don't make him a profit YOU'RE FIRED!

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Robin Hood

• Robs from the rich and gives to the poor (ie
  redistribution of wealth).

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Papa Smurf

• Leads a self-sufficient community of little blue
  people living in harmony. All members of the
  community work together to meet their needs. All
  have an equal share.

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Gargamel

• He is in constant pursuit of wealth and doesn't
  care how many little Smurfs had to die to make
  him rich. In fact he thought he could turn Smurfs
  into gold...hmmmmm