Economic Systems: Foundations - Vocabulary Flashcards

Vocabulary flashcards covering key terms, definitions, and concepts from the lecture notes on economic systems.

Economic system

A framework that determines how resources are allocated, goods are produced, and wealth is distributed in a society.

Capitalism

An economic system with private ownership of the means of production, profit-driven production, price-based resource allocation, limited government, and competition.

Socialism

An economic system with social or public ownership of major industries, production for use, potential centralized planning or democratic control, and redistribution to ensure equity.

Communism

A system with collective ownership of all means of production, a classless and stateless society, production based on need, and the principle from each according to ability, to each according to need.

Mixed economy

An economy that blends elements of market and command systems, with government intervention to address equity and market failures.

Private ownership

Ownership of property and resources by individuals or firms rather than the state.

Means of production

Facilities, resources, and inputs used to produce goods and services (land, capital, labor, technology).

Price mechanism

The system by which prices coordinate supply and demand to allocate resources.

Government intervention

Active involvement by the government in economic activity through regulation, taxation, or programs.

Externalities

Unpriced effects of economic activity that affect third parties (positive or negative).

Market economy

An economy guided largely by private markets and voluntary exchange, with prices guiding decisions.

Command economy

An economy where the government makes the major decisions about resource allocation and production.

Nordic model

A form of social democracy combining market economies with universal welfare, high taxes, and strong labor protections.

Marxism

A theory focusing on class struggle and critique of capitalism, emphasizing historical materialism and the labor theory of value.

Historical materialism

The view that material economic relations drive social structures and historical change.

Labor theory of value

The idea that a good's value is determined by the amount of socially necessary labor embedded in its production.

Class consciousness

Awareness by individuals of their social class and shared interests within the economic system.

Dialectical approach

A method of understanding change through opposing forces and their resolution (dialectics).

Five-Year Plans

Centralized planning cycles used to direct production targets in economies like the Soviet Union.

Central planning

Government-directed allocation of resources and production across the economy.

State ownership

Ownership and control of enterprises and resources by the government.

Collectivization

Consolidation of private farms or enterprises into collective or state-owned forms.

Market socialism

An economic system that retains some market mechanisms under social ownership and democratic control.

Circular economy

An approach aiming to minimize waste by reusing, repairing, and recycling resources.

Solidarity economy

Economic activity grounded in cooperation, social responsibility, and democratic ownership.

Digital commons

Open-source information and shared digital resources available to all.

Platform cooperativism

Worker-owned alternatives to gig economy platforms and digital platforms.

Belt and Road Initiative

China's strategic program to improve international connectivity through infrastructure and trade.

Common prosperity

Policy goal of spreading wealth more evenly and reducing inequality.

Institutional quality

Strength and effectiveness of legal systems, property rights, and governance.

Global integration

A country’s participation in international trade networks and financial systems.

Human capital

The education, skills, and health of a workforce contributing to productivity.

Path dependence

How historical development trajectories constrain current economic possibilities.

Free market principles

Ideals of minimal government interference and voluntary exchange in markets.