Economic Systems

At the root of the conflict between the United States and the Soviet Union during the Cold War was a fundamental difference between what each nation thought was the best way to run a modern nation. The US believed in a system of Capitalism, while the USSR was founded on the principals of Communism.

Market vs. Command Economy
A large part of the Cold War was nations aligning themselves economically with either the U.S. or the Soviet Union.  Capitalism, or a Market Economy and Communism, or a Command Economy came to dominate global economics.  The conflict became about which system better provided for the people.  In the end, Capitalism won out, but only by a slim margin.

 

Market & Command Economies
	Market Economy	Command Economy
Ownership	Private ownership of all property and means of production	Government control of all property and means of production
Economic Controls	Little public control; private citizens and business makes decisions.	Government makes all economic decisions
Market Forces	Supply and demand control prices, promotes competition.	Government planning of entire economy.  Focuses on industrial goods

We will complete the graphic organizer pg. 1 together in class.