The document discusses different economic systems such as capitalism, socialism, and mixed economies. It provides definitions and characteristics of each system. Capitalism involves private ownership and operation for profit, while socialism involves social ownership and cooperative management. A mixed economy combines aspects of both systems. The document then compares capitalism and socialism, noting differences in ownership, incentives, equality, and employment. It outlines benefits of capitalism like efficient allocation and production but also drawbacks like inequality, pollution, and exploitation. In the US, issues highlighted include high poverty and wealth inequality.

1. • Submitted by: Abdul Hadi
• Roll No: Ms48 5367
• Submitted to: Maliha Khaqan

2. FLAWS
OF
CAPITALISM

3. TYPES OF ECONOMIC SYSTEMS
• Capitalism
• Socialism
• Mixed economy

4. CAPITALISM
• “Capitalism is an economic system in which trade, industry, and the means of production
are largely or entirely privately owned and operated for profit. Central characteristics of
capitalism include private property, capital accumulation, wage labor and, in many
models, competitive markets.”

5. SOCIALISM
• “Socialism is a social and economic system characterized by social ownership of the
means of production and co-operative management of the economy, as well as a political
theory and movement that aims at the establishment of such a system.”

6. MIXED ECONOMY
• “There is no precise definition of a "mixed economy". Theoretically, it may refer to an
economic system that combines one of three characteristics: public and private ownership
of industry, market-based allocation with economic planning, or free-markets with state
interventionism.”

7. • Socialism is concerned with redistributing resources
from the rich to the poor. This is to ensure everyone
has both equal opportunities and equal outcomes.
• The State will own and control the main means of
production. In some models of socialism, ownership
would not be by the government but worker
cooperatives.
• It is argued that state ownership often leads to
inefficiency because workers and managers lack any
incentive to cut costs.
• Employment is often directed by the state. Therefore,
the state can provide full employment even if workers
are not doing anything particularly essential.
• In a state managed economy prices are usually set by
the government this can lead to shortages and
surpluses
• Capitalism is unconcerned about equity. It is argued
that inequality is essential to encourage innovation
and economic development.
• Private businesses will be owned by private
individuals.
• It is argued that the profit incentive encourages firms
to be more efficient, cut costs and innovate new
products that people want.
• In capitalist economic systems, the state doesn’t
directly provide jobs. Therefore in times of recession,
unemployment in capitalist economic systems can rise
to very high levels.
• Prices are determined by market forces. Firms with
monopoly power may be able to exploit their position
and charge much higher prices.
DIFFERENCE BETWEEN CAPITALISM AND SOCIALISM
Capitalism Socialism

8. ORIGIN OF CAPITALISM
• According to some historians, the modern capitalist system has its origin in the "crisis of
the fourteenth century.
• According to some historians capitalism can be traced back to early forms of merchant
capitalism practiced in Western Europe during the middle Ages.
• Traders in Amsterdam and London created the first chartered joint-stock companies
driving up commerce and trade, and the first stock exchanges and banking and insurance
institutions were established.

9. LIST OF BIG COUNTRIES USING CAPITALIST
ECONOMIC SYSTEM
• America (USA)
• India
• South Africa
• Thailand
• Australia
• Korea
• Russia

10. BENEFITS OF CAPITALISM
 Efficient Allocation of Resources
 Efficient Production
 Financial Incentives
 Growth

11. DRAWBACKS OF CAPITALISM
• Inequality
• Anti-Social
• Pollution
• Manipulated Demand
• Lower Employment Ratio
• Inflated Costs
• Exploitation
• War
• Propaganda

12. CAPITALIST ECONOMY IN DESTRUCTION OF
AMERICA
In America
• 37 million people live below the official poverty line that is 12.6 percent of the total
population.
• The richest among them has more wealth than the bottom 45 percent of the household
combined.
• Outrageous taxation and prices are being put on products that shouldn't be put on those
products
• Capitalism has put small business owners into the poorhouse and forced them to do
something else that they never planned for.