Capitalism: An economy in which the factors of production (such as land, capital) are owned by individuals; basic allocation decision are made by market forces.
Communism: A stateless, classless, economy in which there’s no private property and everyone shares in production and consumption according to individual abilities and needs.
Socialism: An economy in which all nonlabor means of production are owned by the state, which exercises control over resource allocation.
Market shortage: The amount by which the quantity demanded exceeds the quantity supplied at a given price; excess demand.
Suppressed inflation: Inflationary imbalances reflected in nonprice forms (like market shortages and rationing) when prices aren’t permitted to rise.
Involuntary saving: Consumer saving compelled by shortages of consumer goods.
Centrally planned prices are used to achieve specific planning goals, for example, to discouage consumption of luxury (or unhealthy (tobacco)) goods or ensure access to necessities. Resource allocations (production decisions) are determined by central planners (FDA) however; prices don’t function as conventional market signals.
According to Marx’s labor theory of value, all output was the product of the workers. Ownership of land and capital served only as a mechanism for “expropriating” part of labor’s (read also slaves and indiginous peoples) rightful income. Once capitalists were sent packing everyone would share equpally in access to the means of production and the output it yielded. The abolition of private property implied that nobody would have the means of exploiting anybody else. There’d be no central authority – no state – because the only function of a state was to express and pursue the interest of the dominant class. (Hmmm Those who run our state (elected officials) are millionaires.)
However, he foresaw that a central government (the state) would be required for some time to give direction to the “new society.” The proletariat wouldn’t be prepared to embrace fully the basic tenets of communism, nor would it have the “technical expertise” required to organize the means of production. In the interim, a central authority, a socialist state, would have to solidify class consciousness, reorganize property and production rights, and plan the transition to a truly communist society.
5 Comments
November 16, 2009 at 8:00 pm
You left out one definition: Fascism. Just curious, what’s your source for the definitions?
November 17, 2009 at 7:51 am
I will see about the ‘fascism.’ So – are you challenging the definitions?
November 19, 2009 at 9:49 am
Did you figure out why I didn’t include “fascism”? Because it is not an economic term, it is a political ideology. This post is economy focused. The definitions are taken directly from a college textbook. The book The Economy Today 8th Edition published by McGraw-Hill.
November 22, 2009 at 5:32 pm
Oh, I’m not challenging it…just curious as to the source. I just find it interesting that fascism isn’t included. Most of these definitions have political ramifications as well, and the state of the US economy is really neither socialism or pure capitalism these days.
November 23, 2009 at 12:14 pm
ML – Our economy hasn’t been “Pure” for ages.