Capitalism - created from Mind Map

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Socialism

Communism

Based on the people of the community owning and maintaining the market. Very high economic freedom.

A good example of who has this economy system is The United States.

An economy is useful to have because it sets the tone to how a country will operate. It sets the tone for how benefits and the profits of the people are to be handled. Like in the capitalist economy, people own and operate their own businesses so all profit, (excluding taxes) is theirs. Unlike the socialist or communist economy, if you are innovative or you have a well paying job, more than likely you will be successful in life. But if you are not successful, there aren't many programs that will help you when you are down.

Like communism, this economic system puts the major calls of production in the hands of the people. But it is also a belief that wealth and profit is to be shared among the people equally and fairly.

A good example of who has this economy system is China

Pros: All members share benefits, Those who cannot contribute to the economy by means of working can still receive the benefits of others, Everyone can survive since all needs are met, no one person or group of people are higher than the rest.

Cons: No incentives to work harder or make something of yourself, No innovative ideas or breakthroughs because of no incentives, Much higher taxes.

Communism is a lot like Socialism, this economic system puts the major calls of production in the hands of the people. But it is also a belief that wealth and profit is to be fairly given to those who have a harder time supporting themselves. They also tax the rich and give breaks to the poor.

A good example of who has this economy system is North Korea

Pros: Everyone is equal so no incentive to grow and be different, Very good healthcare, no one person is poor since everyine is equal, everyone gets what they need to survive.

Cons: No freedom of speech or religion, no economic freedom, power is in control of one person or few people, no incentive to grow and make more money since money is dispersed.

Pros: Incentives to be wealthy, Incentives to be the most efficient you can be, Prevents large governments.

Cons: High risk of monopolies, If this happens, employers can pay lower wages, leads to large inequalities, companies with exponential growth often don't last long because such a high increase in demand.

But in a Communist or socialist economy, all profits and money is evenly distributed to those in the community. So if you are broke, (which shouldn't happen ideally in this economy type) The government will lend a hand and make sure everyone's needs are met. This breeds laziness because there is no incentive to innovate because all extra money made from your ideas goes right back into the community.

Also, an economic system helps with how much the government can interveine in your business. In a capitalism economy, the government has very little say in what you can and can't do. Unlike the socialist or communist economy, the government has most say in what businesses and other individuals can do or produce. So again, this breeds a negative outlook towards innovation because the government will just take your idea and distribute any and all profits to those who need it more than you do.