Question 2 [33]
2.1 Study the picture below and answer the questions that follow.
2.1.1 State the economic system represented in the above picture and explain the reason for your answer. (3)
2.1.2 Using academic sources, tabulate three (3) differences between the three economic systems, state the philosophers who coined each system, and describe the basis upon which they coined those economic system. (10)
2.1.1 The economic system represented in the above picture is capitalism. This is because the image depicts individuals freely trading goods and services with minimal government intervention. In a capitalist system, the means of production are privately owned, prices are determined by supply and demand, and competition drives innovation and efficiency.
2.1.2
| Economic System | Differences | Philosopher | Basis |
|------------------|-------------|-------------|-------|
| Capitalism | 1. Private ownership of means of production | Adam Smith | Based on the idea of self-interest and the "invisible hand" guiding the economy |
| | 2. Market-driven prices determined by supply and demand | Friedrich Hayek | Believed in the importance of individual freedom and limited government intervention |
| | 3. Emphasis on competition leading to efficiency and innovation | Ayn Rand | Advocated for rational self-interest and individualism |
| Economic System | Differences | Philosopher | Basis |
|------------------|-------------|-------------|-------|
| Socialism | 1. Collective ownership of means of production | Karl Marx | Based on the idea of historical materialism and the class struggle |
| | 2. Centralized planning of the economy | Vladimir Lenin | Advocated for a vanguard party to lead the proletariat in revolution |
| | 3. Emphasis on social welfare and equality | Rosa Luxemburg | Focused on the need for workers to unite globally against capitalism |
| Economic System | Differences | Philosopher | Basis |
|------------------|-------------|-------------|-------|
| Communism | 1. Stateless, classless society | Karl Marx | Envisioned as the ultimate goal of the socialist revolution |
| | 2. Common ownership of all property | Friedrich Engels | Saw communism as the end result of historical materialism |
| | 3. Abolition of money and the market economy | Lenin | Believed in the need for a transitional socialist state to achieve communism |