Chapter 6
18K - views

Chapter 6

Pump Primer. Identify the two questions that help determine whether an economy is capitalistic or socialistic. Chapter 6. Economic Systems. Chapter 6. Objectives. Describe mercantilism. Describe Adam Smith’s contribution to economics.

Download Presentation

Chapter 6




Download Presentation - The PPT/PDF document "Chapter 6" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.



Presentation on theme: "Chapter 6"— Presentation transcript:

Slide1

Chapter 6

Pump Primer

Identify the two questions that help determine whether an economy is capitalistic or socialistic

Slide2

Chapter 6

Economic Systems

Slide3

Chapter 6

Objectives

Describe mercantilism

Describe Adam Smith’s contribution to economics

Define laissez-faire liberalism

Identify the two questions that help determine whether an economy is capitalistic or socialistic

Describe each of the major forms of capitalism

Describe each of the major forms of socialism

Explain how free-market capitalism compares to scriptural principles

Explain how socialism compares to scriptural principles

Slide4

Chapter 6

Biblical Integration

Christians should avoid coveting others' wealth, for God considers wisdom to be of more valve than wealth. (Ex.20:17; Prov. 16:16)

Slide5

pp. 106-110

Chapter 6

wealth

the ability to do or have the things that bring personal satisfaction

Slide6

Mercantilism

promoted the acquisition of precious metals, not as the means to an end, but as the end itselfgoal = increase holdings of gold and silvermisled into thinking that stockpiling money was the same as accumulating wealth

pp. 106-110

Chapter 6

Slide7

Mercantilism: Five-Point Program

exploration: discover and seize new sources of good and silvertrade: reach a favorable balance of tradedomestic manufacturing: increase domestic manufacturing to produce more goods to sell abroad

pp. 106-110

Chapter 6

Slide8

Mercantilism: Five-Point Program

colonization: encourage colonizing new territories to acquire new supplies of the factors of productionalliances/treaties/conquest: use foreign relations to minimize competition

pp. 106-110

Chapter 6

Slide9

Five-Point Program Problems

explorationplunder to reach this balancesupport privateers to steal from neighboring nations

pp. 106-110

Chapter 6

Slide10

Five-Point Program Problems

tradedifficult to reach this balancedomestic manufacturinglimited amounts of goods available for purchase in home nation

pp. 106-110

Chapter 6

Slide11

Five-Point Program Problems

colonizationincreased tensions between the colonists and their monarchsalliances/treaties/conquestdrove up prices and caused inflation

pp. 106-110

Chapter 6

Slide12

Adam Smith

“Father of Laissez-Faire Economics”Wrote The Wealth of Nations

pp. 106-110

Chapter 6

Slide13

The Wealth of Nations

wealth = economic prosperity of the citizensmercantilist nation:wastes itself to produce for othersdespised for its hostile practices

pp. 106-110

Chapter 6

Slide14

The Wealth of Nations

a treatise against mercantilism misconception = money is wealthmoney:provides ability to purchase wealthprovides no utility of itselfis only a tool

pp. 106-110

Chapter 6

Slide15

pp. 106-110

Chapter 6

laissez-faire

from the French, to “let alone”

Slide16

Laissez-Faire

Rulersleave subjects aloneallow subjects to seek personal profitCitizensfree to specialize in jobsfree to exchange goods with one another

pp. 106-110

Chapter 6

Slide17

Laissez-Faire

Criticism: creates a selfish, greedy, anti-social nationDefense: seek out needs of others to profitably satisfy them“The Invisible Hand”

pp. 106-110

Chapter 6

Slide18

Modern Economic Systems

Capitalism: economic freedomSocialism: state-controlled economies

pp. 111-120

Chapter 6

Slide19

Modern Economic Systems

Two fundamental questions:Who owns the nation’s factors of production?Who answers the three economic questions?

pp. 111-120

Chapter 6

Slide20

pp. 111-120

Chapter 6

socialistic

a central authority, committee, or the people in common own the factors of production and make nearly all significant economic decisions

Slide21

pp. 111-120

Chapter 6

capitalistic

private individuals own the factors of production and make almost all significant economic decisions

Slide22

Economic Systems

Socialismless personal ownershipless personal decision-makingCapitalismmore personal ownershipmore personal decision-making

pp. 111-120

Chapter 6

Slide23

p. 111

Chapter 6

Slide24

Radical Capitalism

Most extreme form of capitalismPrivate citizens:own all the factors of productionmake all economic decisionshave no government

pp. 111-120

Chapter 6

Slide25

Radical Capitalism

Unscripturaldenies legitimacy of government (Rom. 13:1, 4)impracticalfree market cannot exist without governmentanarchy without government

pp. 111-120

Chapter 6

Slide26

Classic Liberal Capitalism

Adam SmithGovernment must exist, but with minimal control

pp. 111-120

Chapter 6

Slide27

Classic Liberal Capitalism

Responsibilities of government:to protect citizens from foreign aggressionto protect the rights of its citizens from infringements by othersto provide public goods

pp. 111-120

Chapter 6

Slide28

State Capitalism

Citizens own:natural resourcesfinancial capitallabor

pp. 111-120

Chapter 6

Slide29

State Capitalism

Government intervenes:decision-making processinsuring egalitarian goalsWelfare state: extreme state capitalism

pp. 111-120

Chapter 6

Slide30

Social Democracy

State control of cornerstone industriesPrivate ownership of nonessential businesseshighly regulated

pp. 111-120

Chapter 6

Slide31

pp. 111-120

Chapter 6

nationalization

large scale government ownership of a nation’s companies

Slide32

pp. 111-120

Chapter 6

privatization

selling nationalized businesses back to private stockholders

Slide33

Centralized Socialism

National government:central ownerdecision makerEnvisioned by Karl Marx

pp. 111-120

Chapter 6

Slide34

Centralized Socialism

Criticisms:destroys incentives for entrepreneurseliminates incentives for individual workers to produce better goods and servicescreates shortages and black markets

pp. 111-120

Chapter 6

Slide35

Communism

Most extreme form of socialismFactors of production managed by everyone in common

pp. 111-120

Chapter 6

Slide36

Contrasting Capitalism and Socialism

What does the Bible say?Supports for capitalism:the principle of personal, private ownership of propertythe principle of individual accountability for decisions (rewards and punishments)

pp. 111-120

Chapter 6

Slide37

Contrasting Capitalism and Socialism

Instructions for business owners:treat employees with respectpay them a decent wagepay them on timeWealth should not draw us away from God

pp. 111-120

Chapter 6