The Industrial Revolution Kirby-CHS

1. The Industrial Revolution Kirby-CHS *

2. Warning Concentration on these slides is guarantied to improve your World History grade.

3. We will be using Cornell Note Taking Format Today! Don’t be a victim….. Own the day! Relax and enjoy the ride In History Class!

4. North Clackamas School District Social Studies Priority Standards: • HK 2. Analyze the complexity and investigate causes and effects of significant events in World History. Unit Learning Objectives:

5. I Can…. Describe The Three basic Economic Systems Lesson Seven: Daily Learning Target

6. The Market System

7. Why Do We Have Economic Systems? • Survival for any society depends on its ability to provide food, clothing, and shelter for its people. • The Economic System is the organized way a society provides for the wants and needs of its people.

8. Markets are places where people can exchange the things they have for the things they want.

9. Adam Smith was the first economist. In his book, The Wealth Nations (1776), Adam Smith explained how free markets functioned.

10. The Free Market • In a free market economy, people are free to buy and sell whatever they want. • Obviously, we do not live in a completely free market economy. • There are some restrictions on what we can buy and sell.

11. In the United States today, there are some products that we cannot legally buy. We can buy a rifle but not this gun.

12. Laissez-faire • Laissez-faire is the doctrine that states that the government should not intervene in the marketplace. • It means “let them do (as they please)”. • In a free market, the government does not regulate the economy.

13. FREEDOM OF ENTERPRISE & CHOICE PRIVATE PROPERTY ROLE OF SELF-INTEREST COMPETITION Six Characteristics of Market Systems

14. FREEDOM OF ENTERPRISE & CHOICE PRIVATE PROPERTY ROLE OF SELF-INTEREST COMPETITION ACTIVE, BUT LIMITED, GOVERNMENT MARKETS & PRICES Six Characteristics of Market Systems

15. 3 Characteristics of all Economic Systems Use of Money Reliance on Technology and Capital Goods Specialization which makes workers more efficient

16. Iran South Africa France United Kingdom Hong Kong North Korea China Botswana Canada Singapore Cuba Russia Greece Peru United States Comparing Mixed Economies An economic system that permits the conduct of business with minimal government intervention is called free enterprise. The degree of government involvement in the economy varies among nations. “Not So Much” Free Enterprise

17. Ranking Development Levels of Development Northern Europe Western Asia Western Europe Eastern Europe Canada Southern Europe United States Northern Africa South Central Asia East Asia Tropic of Cancer Central America Caribbean Western Africa Eastern Africa Southeast Asia Equator Middle Africa South America Southern Africa Tropic of Capricorn Oceania High-income economies (Per capita GNP $9,386 or above) Middle-income economies (Per capita GNP $765 to $9,385) Low-income economies (Per capita GNP $764 or below) No data available Levels of development vary greatly among nations. High income economies [Per Capita GDP $9,386 + Middle income economies [Per Cap. GDP $765-$9,386 Low income economies [Per Cap. GDP-below $764 No data available

18. 1. Hong Kong 3. Ireland 5. United States 20. Belgium 31. Spain 48. France 101. Brazil 126. China 146. Russia 148. Venezuela 156. Cuba 179. North Korea Index of Economic Freedom [Ranking of 180 countries for 2013] FREE MOSTLYFREE MOSTLYUNFREE REPRESSED

19. The Market System At Work The Three Basic Questions... What, how, &for whom 1. What will be produced?

20. Economic Systems A. Traditional – “Custom rules” B. Command – “Government rules” C. Market – “Individuals rule” D. Mixed 1.) Capitalism – modified free enterprise 2.) Communism – command w. some market 3.) Democratic Socialism – socialist democracies

21. 1. Traditional Economy Strengths • Everyone knows their role. • Little uncertainty over what to produce or how to produce. • The question of For Whom to produce is answered by custom. • Life is generally stable, predictable, and continuous. • Economic activity is based on ritual, habit and custom. Weaknesses • Tends to discourage new ideas. • Lack of progress leads to lower standard of living.

22. 2. Command Economy • Government “rules”. • Economic decisions are made at the top and the people are expected to go along with choices their leaders make. Strengths • Change direction drastically in a relatively short time (The USSR went from an agrarian to industrial nation in a very short time). Weaknesses Fidel Castro • Not designed to meet the wants and needs of individuals. • Lack of incentives to work hard leads to unexpected results. • Large bureaucracy for economic planning. • Not flexible in dealing with minor day to day problems. • People with new or unique ideas are stifled. Karl Marx

23. Specialization Laissez Faire Economics (No government intervention) The Wealth of Nations 1776 Self Interest Adam Smith Scotland 1723-1790 The Invisible Hand Father of Economics [Adam Smith]

24. 3. Market Economy • Markets allow buyers and sellers to come together in order to exchange goods and services. • People and firms act in their own best interest to answer economic questions. Strengths • Markets can adjust over time. • Freedom exists for everyone involved. • Relatively small degree of governmental influence. • Decision making is decentralized. • Variety of goods and services are produced. • High degree of consumer satisfaction. “Invisible” hand

25. Weaknesses of a Market Economy • The primary weakness is deciding for whom to produce. • The young, sick and old would have difficulty in a pure market environment. • Markets sometimes fail. • Competition (monopolies may develop) • Resource mobility (resources are sometimes hindered from moving about) • Availability of information (producers often have more information than do consumers, which gives them an advantage)

26. Economic Freedom • You are free to: • Choose your occupation • Choose where and when you work • Work for yourself or someone else • Leave your job and to move to another job • Businesses are free to: • Choose which workers they want • Choose where and how they produce

27. Types of Economic Systems • Traditional • Economic decisions • are based on • customs & beliefs. • Change is discouraged and sometimes even punished. • Methods of production are often inefficient. • Family and community ties are strong. • Market • Economic decisions are made by individuals. • Individuals own the factors of production and choose what to produce based on the info provided by market prices. • Consumer choice is large. • Little incentive to engage in unprofitableventures like caring for the sick. • Command • Economic decisions are made by government leaders. • The government owns the factors of production. • Prices are set by the government. • Consumer choice is often limited. • Resources can be quickly rerouted. • Income distribution can be controlled by the government.