2. What is economic activity?
The organization of
the decisions that
allow the use, as
rational as possible,
of the resources,
that is, of the
PRODUCTION
FACTORS
(labor, land,
capital)
We define the set of
structures
(technical,
economic, political,
etc.) that make this
decision-making
possible as
ECONOMIC
SYSTEM
4. EXAMPLE: INDIGENOUS GROUPS
Agricultural,
livestock, hunting
and fishing goods
what to
produce?
Pens, nets, bows,
arrows, basic tools
how to
produce?
For the community
itself. They put in
common
harvests and
distribute goods.
For
whom?
5. In the history of humanity, the ways of coordinating the factors of production
(land, labor and capital) have been very diverse. In our western world the
following economic systems can be mentioned:
HISTORY OF ECONOMIC SYSTEMS
Primitive
economy
Slavery
Feudalism
Mercantilism
Capitalism
Communism
Mixed
economy
?
7. It was generated in Paleolithic times, at this
time man was a nomad and hunter, as a
result of this man saw the need to associate
with other people to satisfy their primary
needs (food, clothing and survival).
The groups were called: clans or tribes,
where their main objective is simple
cooperativism or mutuality. It is
characterized because the goods it
produces are consumed almost immediately,
there are no economic surpluses (profits).
There is no exploitation or social class.
Besides that the division of labor occurs
naturally or socially.
9. The slave system of economic organization
reached its peak in ancient Greece and
Rome. The dominant economic activity was
agriculture. The production system was
based on the exploitation of slave labor by
the patricians (Roman nobility).
The result of it was distributed between this
ruling class and freed or freed slaves and
commoners. Social relationships are based
on property and the right to something or
someone. At this time, social classes began
to be generated.
11. The feudal system had a slow evolution, reaching
its apogee between the 9th and 14th centuries in
Western Europe. Its economic structure was
fundamentally agricultural, with small artisans
who supported this main activity. Trade was very
small.
The dominant social classes were the nobility and
the clergy, majority owners of the land. The lower
classes were made up of serfs, who cultivated the
fields. The social product was distributed mainly
among the privileged classes.
15. Starting in the 18th century, the appearance of new
production techniques (the steam engine in the steel
industry and spinning - Jenny in the textile industry)
led to the shift from productive forms based on
agriculture and small manufacturing to one that was
based on large-scale industrial activity.
The modern company is born, the industrial worker
who offers his work in exchange for a salary. The
liberal ideas triumph over the conservative ones of
the Old Regime. Ultimately, a new economic, social
and political order emerges: capitalism.
In the middle of the 19th century, a second industrial
revolution took place; small businesses get bigger;
more financial means (financial capital) are needed.
16. Also, the large banking entities appear that little by
little are going to interrelate with the industries.
The great benefits accumulated during this time were
based on three basic pillars:
1. The progress of the technique that led to high
productivity.
2. Exploitation of the workforce to unimaginable limits.
3. The exploitation of the colonies that provided an
important flow of cheap raw materials.
All this sanctioned by a political regime in which the
State had no intervention in the economic system and
was limited to defending the political power of the
ruling class.
18. This situation definitely exploded at the end of the 19th
century with the appearance of trade unions, political
parties that advocated a more just social system,
following the theoretical postulates of Marx and Engels.
The Bolshevik Revolution of 1917 gave rise to a new
social, political and economic system: the communist
system. The most outstanding characteristics of this
system are the following:
1. The State is the owner of all the means of
production, thereby trying to avoid the exploitation
of man by man. There is no private initiative in
economic activity.
2. There is no market as we know them today. It is the
State that assumes the role of distributing
resources, setting productions and setting prices.
19. 3. The organization of production is carried out
through a Central Planning Body that sets
production plans (five-year in nature in the former
USSR). Everything is regulated in these plans. For
different reasons, but which we could sum up as
"inefficiency", the planning system failed in the
former USSR and with it a social way of life.
The consequences were immediately extended to other
countries, so that today it is difficult to find any
(perhaps Cuba) that maintains the economic forms of
action of the USSR. Most of them have evolved towards
market economy systems and others (China) towards
intermediate forms between both systems.
21. The mixed economy is an economic system
characterized by the combination of the public sector,
the State and the market, to facilitate economic
control of the region and optimize the supply of the
necessary resources for the population.
With this economic model, the private sector is the one
who establishes market prices, based on the law of
supply and demand. The State has the right to
intervene in the event of market failures, such as very
large inequalities or a shortage of resources.
The maintenance of free social rights for all its
citizens, led the countries to institute this system in
which the State participated in an important way in
the economy (public companies in strategic sectors)
and provided social services to the less favored social
sectors.
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