Capitalism: an economic system in which ownership of property and industry are put in the hands of individuals rather than the government.
Socialism: an economic system in which the government wholly runs the economy, sets wages and prices, and decides who can work and where.
Communism: an extreme form of socialism derived from Karl Marx in which all property is publicly owned and economic decision-making power, including the allocation of all resources, is entirely controlled by a centralized government.
Marxism: refers to the political and economic theories produced by Karl Marx and Fredrich Engels. It is the basis for the practice of communism.
Authoritarianism: the denial of personal freedom in favor of strict obedience to an authority.
Dictatorship: a type of authoritarian government in which a small group or individual person rules with almost unlimited power. North Korea is a modern-day example of a dictatorship.
Monopoly: when one provider of goods or services is able to legally prevent others from offering competing products or services. This often leads to capturing a large market share of that good or service.
Oligopoly: when a market is shared by a small number of providers. Unlike a monopoly, an oligopoly does have multiple providers. However the small number of providers means collusion is more common than free competition within the market, and consequently prices to consumers are artificially high.
Liberal democracy: a form of representative democracy with free and fair elections, characterized by a competitive political process. All adult citizens are given the right to vote regardless of race, gender, or property ownership. A liberal democracy may take various constitutional forms such as constitutional republic, a federal republic, a constitutional monarchy, a presidential system, a parliamentary system, or a hybrid semi-presidential system. For example, countries such as the United States, India, Germany, and Brazil each take the form of a constitutional republic.
Rule of law: a structure in which laws are applied equally to everyone, no matter their political or economic status. It means that if you break a law, you face the consequences. When followed, the rule of law leads to a more just and prosperous society.
Cash nexus: a term coined by Thomas Carlyle, refers to the basis of connections between people being reduced to “cash payment” transactions. Marx and Engels popularized the phrase in The Communist Manifesto, arguing that the cash nexus essentially dehumanizes laborers.
Fiscal redistribution: refers to using a combination of taxes on wealthy citizens and targeted government-sponsored social programs to reduce economic disparities.
Central planning: refers to a central power (typically the government) maintaining economic control over the economy.
Free enterprise: refers to a system in which minimal government control allows private business to operate without interference.
Market economy: In a market economy, production and prices of goods are determined through competition among privately owned businesses. Freedom of choice, limited government, competition, and the right to private property are all important characteristics of a market economy.
Individual liberty: refers to the freedom to exercise rights without undue government control. Recognizing individual liberty affirms a limited sphere of government influence in an individual’s life.