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European Economic Systems 1500-1900

Mercantilism, Capitalism & Socialism

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Directions:

  1. Use the LAHS databases
    1. Go to LAHS's Library Page
    2. Click on Research
    3. Use passcode: laeagles
    4. search: mercantilism & europe
  2. Read & fill out the next 4 slides as best you can in 10 minutes
  3. Discuss: your content 5 minutes
  4. Share w/the class 5 minutes
  5. Repeat for Capitalism & Socialism w/slight reading variations

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Mercantilism

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Mercantilism Definition

  • nation's economy tinkered with to improve
  • monopolies created
  • government want to control economy
  • wealth into the king's coffers
  • economic system that dominated Western Europe from around 1500 to the time of the Industrial Revolution
  • politically planned economy
  • income taken by rulers to be sent to the ruler for them to figure out how to use it

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Mercantilism People & Places

  • "that there is an irreconcilable conflict of interests among men and groups of men," wrote Ludwig von Mises in Theory and History
  • colonies were viewed as economic markets whose purpose was to serve the mother country
  • jean baptiste colbert, main pusher of mercantilism
  • louis xiv helped him

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Mercantilism: Why it Failed

  • monopolies became dangerous
  • "distorted" version of "natural" commercial system
  • taxes were repealed or reduced as the middle class began to exert its growing power
  • based off of old methods, therefore old mistakes
  • adam smith introduced capitalism, which the people were very interested in

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Capitalism

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Capitalism Definition

  • laissez faire
  • no government interference
  • market dictates success
  • obscene amounts of wealth to some
    • imbalance of distribution of wealth

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Capitalism: People & Places

  • Adam Smith
    • government shouldn't be controlling the economy
    • govt should allow people to determine what they want to do for themselves
    • laissez faire
    • market will dictate success
    • America "subscribes" to Smith
  • made Britain the economic colossus of the world, gave her supremacy on the seas for some 150 years

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Capitalism: Why it replaces Mercantilism

  • obscene wealth to a few, everyone else impoverished
  • cheap cloth for all
  • overall lifting
  • vladimir, karl marx "The Communist Manifesto"
  • no utopia
  • no happy place
  • everybody sad
  • die

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Communism

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Communism Definition

  • government takes all wealth, redistributes to people
  • Karl Marx
  • everything is a government monopoly
  • disgruntled employees
  • perverse incentives to sabotage total control

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Communism People & Places

  • Karl Marx
  • people angered
  • not happy working in factories
  • each according to his needs, each according to his wants
  • bodies are not communal properties
  • women get the right to vote 5 years before in communist countries

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Communism: Response to Capitalism

  • government controls everyone and everything
  • arises as a response to wealth divides
  • proletariats (working urban poor) and aristocrats are most opposed
  • bourgeoisie are for it

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Socialism

Research using the database again please!

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Socialism: Definition

  • pay proportional to work done in job
  • You have two cows. The government takes one and gives it to your neighbor

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Socialism: People & Places

  • robert owen, john stuart mill (utilitarian)
  • try to maximize people's happiness
  • by wealth, rendering services

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Socialism: A response to Capitalism & Communism

  • blending of the two systems