collectivization
leaders in Russia wanted to collect food from the peasants in order to feed urban places; combining small farms into large, factory-like farms run by the government. Forced common ownership of factors of production
Perestroika
A restructuring of the Soviet economy to permit more local decision making, begun by Mikhail Gorbachev in 1985.
black market
underground" or illegal market in which goods are traded at prices above their legal maximum prices or in which illegal goods are sold
piecework
System in which workers are paid not by the time worked, but by the number of items they produce
quotas
a set goal that workers in the factories are required to make
storming
Soviet practice of rushing production at month's end to meet quota numbers. Usually poor quality
Solidarity
1980s Solidarity Labor Union under rule of Leck Walesa led peaceful protests against communism
5 year plan
Stalin's economics. Forced, rapid industrialization, targets for production. Collectivization of farms, complete state takeover
USSR
Union of Soviet Socialist Republics. Created by Lenin in 1922.
Traditional economy
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.
Command Economy
economic system in which a central authority is in command of the economy; a centrally planned economy
Market economy
An economic system in which people choose freely what to buy and sell
barter economy
Economy of exchanging goods and services for other goods and services without using money.
advantages of traditional economy
Everyone knows role to play. Little uncertainty exists over HOW and WHAT to produce. Custom determines FOR WHOM to produce
advantages of command economy
Can change direction drastically in short period of time. Little uncertainty about WHAT, HOW, and FOR WHOM to produce
disadvantages of traditonal economy
Discourages new ideas/innovations. People ultimately break the "rules", lower standard of living
disadvantages of command economy
not designed to meet all wants and needs of consumers, no incentive to work hard, large decision making bureaucracy, not flexible for day to day production, people with unique ideas cant get ahead
examples of Command Economy
North Korea, Cuba, China, Soviet Union
Advantages of Market economy
Adjusts to change over time. High degree of individual freedom. Little government interference. Decision making is decentralized. Availability of a wide variety of goods/services
Disadvantages of Market Economy
there is no provision of public goods and only profitable goods are produced. No help for the weak, old, sick, unempoyed who don't contribute to production which may lead to a large gap between rich and poor.
mixed economy
an economy in which private enterprise exists in combination with a considerable amount of government regulation and intervention
capitalism
an economic system based on private ownership and on the investment of money in business ventures in order to make a profit
Seven major economic and social goals of the US
economic freedom, economic efficiency, economic equity, economic security, full employment, price stability, economic growth
Asian Tigers
Collective name for South Korea, Taiwan, Hong Kong, and Singapore-nations that became economic powers in the 1970s and 1980s. (p. 861)
Lenin
founded the Communist Party in Russia and set up the world's first Communist Party dictatorship. He led the October Revolution of 1917, in which the Communists seized power in Russia. He then ruled the country until his death in 1924.
stalin
Russian leader who succeeded Lenin as head of the Communist Party and created a totalitarian state by purging all opposition (1879-1953)
Karl marx
German philosopher, economist, and revolutionary. With the help and support of Friedrich Engels he wrote The Communist Manifesto (1848) and Das Kapital (1867-1894). These works form the basis of all communist theory, and have had a profound influence on the social sciences. Wanted a "classless society
Adam Smith
Scottish political economist and philosopher. His Wealth of Nations (1776) laid the foundations of classical free-market economic theory, government should not interfere with economics. Supported division of labor and specialization. Free Market ultimately brings about greatest good for society.
What caused fall of Soviet Union
Never became fully industrialized, incentive programs failed (piecework/storming), Production Quotas failed, poor supply of consumer goods, economic collapse, collapse of political leadership, stress and unrest of ethnically diverse people
privitization
Conversion of state owned factories and propeties to private ownership. Letting the private sector take over an area that was typically run by the government. VOCHERS allow individuals to buy shares in gov't owned companies that then become private corporations.