1-page printable lecture notes

I.  How Capitalism Answers the Economic Questions

      A. What to produce?
           1. Which goods?
               a. Those that can be sold at a profit, consumers vote with dollars
               b. Accounting Profit: The amount by which total revenue exceeds
                   accounting costs (rents, wages, and interest) Note these are
                   three of the four Factors of Production    
               c. Normal Profit
                   1. Amount received for enterprise
                   2. Considered by economists to be a cost
              d. Economic Profits
                  1. The amount by which total revenues exceed all "Factor" costs.
                       Some think of it as a surplus.
                  2. Expanding industries have economic profit. 
                      a) Bill Gates, founder of Microsoft, has earned billions of dollars. 
                      b) So has Sam Walton of Wal-Mart 
                      c. Lester C. Thurow Profits, Concise Encyclopedia of Economics.  
              e. Difference between accounting economic and-normal
         2. How many goods?
             a. Level of demand and efficiency of supply determine output.
             b. Society determines total demand
                (who works, how often and for how many years).
            c. Success of economic system determines efficiency of supply.
            d. Wealth Hits Another Peak. Time to Celebrate or Worry? 8/1/17
          Editor's Note: Income distribution id a political question.

      B. How to produce?
          1. Companies must be competitive
          2. Competition is the "Invisible Hand" assuring
              a. High quality goods are produced.
              b. Efficient production methods are employed.
              c. Prices and profits are reasonable.
              d. For more read Adam Smith and the invisible hand by H Joyce
          3. Technology and innovation are instrumental to success.

     C. Who will receive production?
          1. Those willing and able to pay
          2 .Function of income, savings, and attitude toward debt financing
          3. In a Mixed Economy the government has a say in who receives production.
              See Taxes and history-of-us-taxes/
          4. Budget Deals from Congress where everyone has everyone receiving more!

Who Will Receive Production is a Political Question

Pure Socialism and Capitalism Lost to Mixed Economies

Here is One Reason

Gallup poll.

III. Other Economic Systems
     A. Introduction
           1. Pure capitalism of Adam Smith never existed.
           2. Recent economic systems are Mixed Economies Capitalism and Socialism mixed
               See Democratic Capitalism vs. Capitalistic Democracy
      B. Other Economic Systems         
          1. Socialism has some collective ownership and management of economic resources
               that are more equally distributed. See History of Socialism
           2. Democratic Socialism as practiced in Western Europe has public ownership of key
               industries such as transportation and communication.
               a. Economic systems of Europe began moving away from socialism
                   toward capitalism in the late 1970's.
              b. Margaret Thatcher former prime minister of England started this trend.
              c. Ronald Reagan agreed and stressed the market system during his presidency. 
              d. Capitalism and Socialism
                  1. Capitalism vs. Socialism Crash Course Video in World History
                      #33 uses humor teaching the basics.
                  2. Laissez fair Capitalism vs. Socialism Video See Social democracy 
                      Editors Question: Will China's system Democratic Socialism?
         3. Communism is the ideal of those practicing a "Marxian  system. " 
                     Bolsheviks wanted immediate revolution.
                        a. 19th century philosopher Karl Marx created the system.
                        b. Wealth is collectively owned/managed in a planned command economy.
                        c. The  Paris Commune of 1871 along with the French Revolution explains
                             why so many feared change promised by new liberal economic systems.
                        d. Some equate communism with a totalitarian political system democratic
                            communism has never existed.
                        e. This very left pro-labor anti-religious economic philosophy was despised
                             by most Western Oligarchs many of whom preferred Nazi Fascism over
                             any brand of Communism. 
                        f. Ten Questions and Answers About Americas Big Government

              Unit III. Review Socialism has government ownership and management
                           of large-scale means of production, Communism has
                           equal distribution of production and wealth