Capitalism and communism vocab

Law of competition

Open trade and competition promote innovation and lower production costs as manufacturers compete for consumers

Law of supply and demand

The relationship between a good's price and consumer's willingness to buy. Demand increases lead to higher prices until supply meets demand.

Law of self interest

People are motivated by personal goals, which in free market economy promote innovation and productivity.

Invisible hand

The unseen force that guides economic activity toward socially beneficial outcomes as individuals pursue their self-interest.

Man of systems

A person who seeks control over complex systems often through government intervention, which Smith argues is inefficient and immoral

Forces of production

Include the natural world, tools, and human labor. Ownership of these forces is crucial for Marx

Relations of production

The organization of labor, including systems, hierarchy, and processes that define how surplus value is owned and distributed

Modes of production

Different ways, labor can be organized such as primitive communist and ancient feudal and capitalist modes

Labor theory of value

Value is created through human labor. The more labor is used the more valuable and item becomes.

Capitalism

An economic system based on private ownership of the means of production with the goal of making a profit

Communism

An economic system where resources are owned collectively with the goal of an equal distribution of goods and services