THEME4; INTERACTION WITH THE REST OF THE WORLD TOPIC; LESSONS FROM
WORLD ECONOMIC TRANSFORMATIONSKEY WORDS
CapitalismCold warEconomic developmentSocialismTechnologyEdo
periodSamuraiWarrior.Learning outcomesBy the end of this chapter, you will
be able to;a)Understand the back ground for the growth of capitalism
and socialism.b)Know some of the world states that have used the
above ideologies to excel.c)Appreciate the journey of Singapore’s
economic transforma on from 3
rd
world to 1
st
world.d)Understand the history for economic development of Japan,
Singapore and south Korea.e)Appreciate the contribu on of south
Korea Japan and Singapore.Capitalism is an economic system based on
private ownership of property and individual ownership ofthe means of
producon.Property such as industries, banks, large corpora ons and hotels are
in the hands of private individualswho work for pro ts.The wealthy people with
capital invest in enterprise to make pro ts in order to increase on their
wealth.Capitalism is governed by price, which controls the demand and supply of
commodies and factors ofproducon as both the entrepreneur and
consumer go for the cheapest commodity.It emerged in northwestern Europe,
especially Britain and the Netherlands in the 16
th
and 17
th
centuries.The ideology of classical capitalism was advanced by an economist
and philosopher, Adam smith. Heproposed that economic decisions should be
le to market forces which are self-regulang.It spread a lot during the
industrial revoluon during the 18
th
century.During that me their focus shied from development to trade and this
resulted into colonialism, slaveryand imperialism especially in south America and
Africa in the 15
th
and 19
th
century respecvely.
These were done in order to acquire land for investment and market for the
produced goods. Thisfurther expanded capitalism in their colonies.However,
capitalism created a gap between the rich and the poor and also increased
exploitaon ofworkers. The rich became richer while the poor became
poorer.Those who accumulated wealth were able to 1nuence polics.The
growth of industrial capitalism and development of the factory system in the 19
th
century created anew class of industrial workers whose poor working condi ons
led to the rise of socialism.SOCIALISM.It is an economic system in which
members of the society own the major means of produc oncommunally.
It emphasizes the equality of all men. Therefore, no exploitaon .it deals with
stateownership of resources.With socialism all legal produc on and decisions are
made by government with individuals dependent of the state for means of
livelihood such as food, health care and educaon. Every thing that
peopleproduce is a social product hence it aims at beneng
the society.Socialism originates as far back as the ancient Greek mes in the
wrings of Greek philosophers such asPlato, Aristotle and the Bri sh Thomas
more.The fundamental view in socialism is that people, society and universe are
equal the socialists hatedprivate ownership of property.It was further fueled by Karl
Marx between 1818-1833. It further expanded during the 1917
Russianrevoluon, which resulted into other countries such as China,
north Korea, Cuba, east Germany,Yugoslavia, Bulgaria and Vietnam to embrace
it.Using ICT or libraryi ) R e s e a r c h a n d n d o u t t h e
f e a t u r e s o f ; a ) S o c i a l i s m b ) C a p i t a l i s m ii)In your
opinion which of the two ideologies above is beer.
FEATURES OF SOCIALISM
The means of producon are the property of the state.The pro ts of all
enterprises go to the government to be ulized for the benet of
the society.Payment for the work is to be according to the nature of work and is
not to be equal. Earnings varyaccording to ability.Every individual whether he
belongs to a poor family has an equal opportunity to rise in life
undersocialism.The state is in charge of both producon and distribuon where
the allocaon of the producveresources of the community will be determined
according to the direcon of the central government
