1.
Nepotism
Definition: Nepotism is the practice of favoring relatives or close friends in various areas
like business, politics, or other fields, especially by giving them jobs, promotions, or
other advantages without regard to merit.
Example: A company promotes the CEO's son to a high-ranking position despite him
lacking the qualifications or experience needed for the role.
2. Capitalism
Definition: Capitalism is an economic system where private individuals or businesses
own the means of production and operate for profit. Prices, production, and distribution
of goods are determined by competition in a free market.
Key Features:
o Private property
o Profit motive
o Free market competition
o Minimal government intervention
Example: In the United States, most businesses, from large corporations to small
enterprises, are privately owned and operate for profit. Competition among companies
drives innovation and pricing.
3. Socialism
Definition: Socialism is an economic and political system where the means of
production, such as factories and natural resources, are owned or regulated by the
community or the government. The goal is to distribute wealth more evenly and provide
for the collective welfare.
Key Features:
o Government or collective ownership of key industries
o Redistribution of wealth
o Emphasis on social welfare and reducing inequality
Example: In Norway, the government owns significant portions of key industries like oil
and gas, and it uses the revenue to provide extensive welfare programs, such as free
healthcare and education.
4. Communism
Definition: Communism is a political and economic ideology in which all property is
communally owned, and each person contributes and receives according to their needs
and abilities. It advocates for a classless society where there is no private ownership of
the means of production.
Key Features:
o No private property
o Classless society
o Centralized control over resources and production
Example: The former Soviet Union is often cited as an example of a communist state,
where the government controlled all industries and resources, and wealth was distributed
(in theory) according to individuals' needs.
5. Mixed Economy
Definition: A mixed economy combines elements of both capitalism and socialism. It
allows private enterprise to operate in many sectors but also includes significant
government regulation and public ownership of certain industries or services to promote
social welfare.
Key Features:
o Private and public sectors coexist
o Government regulation of certain industries
o Welfare programs and social services
Example: Canada has a mixed economy where private businesses thrive, but the
government controls essential services like healthcare and provides social safety nets like
unemployment insurance.
Nepotism Nepotism is not an economic system, but rather a practice where favoritism is given to family
members or friends in business or professional settings. This can lead to unfair advantages and
corruption. For example, a company owner might hire their unqualified nephew over a more qualified
candidate simply because of their family relationship.
Capitalism Capitalism is an economic system where private individuals and businesses own the means of
production, and goods and services are produced for profit. The government plays a limited role in
regulating the economy. Characteristics of capitalism include:
Private ownership of resources
Free market: supply and demand determine prices
Profit motive: businesses aim to maximize profits
Competition: businesses compete with each other for customers
Example: The United States is a capitalist economy, where companies like Apple and Amazon operate to
maximize profits and compete with each other in the market.
Socialism Socialism is an economic system where the means of production are owned and controlled by
the state or by the workers themselves. The goal of socialism is to promote social welfare and equality.
Characteristics of socialism include:
State or collective ownership of resources
Central planning: the government plays a significant role in allocating resources
Redistribution of wealth: the government aims to reduce income inequality
Social welfare: the government provides essential services like healthcare and education
Example: Sweden is a socialist economy, where the government provides universal healthcare and free
education, and there is a strong social safety net.
Communism Communism is an economic system where the means of production are owned and
controlled by the community as a whole. The goal of communism is to create a classless society where
everyone is equal. Characteristics of communism include:
Collective ownership of resources
No private property
No profit motive: goods and services are produced for the benefit of all
Central planning: the government plays a significant role in allocating resources
Example: Cuba is a communist economy, where the government owns most of the means of production,
and there is a strong emphasis on social welfare and equality.
Mixed Economy A mixed economy is an economic system that combines elements of capitalism and
socialism. The government plays a role in regulating the economy, but private individuals and businesses
also own and operate businesses. Characteristics of a mixed economy include:
Private ownership of resources
Government regulation: the government plays a role in protecting the environment, ensuring
worker safety, and promoting social welfare
Public-private partnerships: the government collaborates with private businesses to provide
essential services
Balance between profit motive and social welfare
Example: France is a mixed economy, where the government provides universal healthcare and
regulates industries like energy and transportation, but private businesses also operate freely.
