-Isms

There are different types of economics systems. Economic systems are how the money is distributed and how the economy works.

Traditional economies include bartering (trade). Bartering only works if someone wants what you have. This is an undeveloped and unsophisticated economy, and is hard to find nowadays. Most economies are more advanced.

Capitalism is based on money as a medium to trade. Money is a medium of exchange, which means people value it. In capitalist economies, there is a profit motive. A profit motive is where you need to make money in order to survive, so you're motivated to work. The "invisible hand" regulates capitalism - since the government does not control the economy, costs fluctuate with no one to change them. The wants and needs of society, and the greediness of people, mean that capitalism self-corrects, and self-correcting causes competition. However, since capitalism is unrestrained, monopolies can form. Monopolies are when one company or person controls a lot of the economy, and it causes problems. Capitalism can get out of control easily, and it can get unfair to the people because the government doesn't regulate it.

Socialism is similar to capitalism. In socialist economies, money is still a medium of exchange, there is still the invisible hand, and there is still sort of a profit motive. However, the government regulates some of the economy.

Communism is the opposite of capitalism. The government completely controls the economy. In communist economies, it can get too controlled and dictatorship-like. Communism only works with force, and it goes against human nature.