Notesale: Turn your study into money

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Karl Marx
Karl Marx was born in 1818 and soon became deeply critical of
Capitalism
...

This inequality frustrated Marx and so he believed that the final stage
in a country’s economic development was Communism
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What did he think about Capitalism?
● To make a profit Capitalists must exploit their workers by paying them low
wages
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● Competition would cause many firms to go bust
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● Due to its unplanned nature, the Capitalist economic system is weak (this
allows multiple crises to occur as no one controls the economy)
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A command economy
Marx believed that production should be directed on the basis of human need, rather
than profit
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This means that the government has control of resources and can - supposedly distribute them equally among their population
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Command economies often work well during times of national crisis, for example the
UK’s population relied on rationing during World War II to ensure that everyone
received the same amount of food
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Advantages of a command economy

Disadvantages of a command economy

Cooperation between firms can lead to
high levels of output

The price mechanism cannot operate so
markets may suffer from excess
demand/excess supply - inefficient
allocation of resources
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Government can fund public goods and
services more (e
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defence and
healthcare)

Less choice of goods and services and
fewer financial incentives for labourers
and managers

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