Definition of Capitalism What is capitalism? According to Adam Smith, both parties in a capitalist system, the buyer and the seller, act in a voluntary transaction to achieve the outcome that serves their self-interest. However, both parties cannot obtain what they want without delivering the needs of the other. In definition, capitalism is an economic system where properties can be controlled and owned by private sectors to suit their interest, which is to gain profits, while the demand and supply of goods and services set the market prices to serve the interest of the society. Foundations of Capitalism Most economies in the world today follow a capitalistic form.
An economy is one of the strong forces to balance the standard of living and political power, so it is important to understand how an economy functions. An economic system is defined as a group of people following the same principle to facilitate economic activities with identical purposes. Capitalism and Socialism are types of economic systems which provide effective methods to organize markets. However, Capitalism is a better form in terms of authorities, price control, and competition. First of all, the primary area Capitalism and Socialism are different is an authority to control the cost and an amount of products.
What is capitalism? Before we begin discussing our topic for today, we need to have a clear understanding of what the term “capitalism” stands for. Capitalism is an economic system of a country where private individuals or group of individuals are allowed to setup and run their own businesses where they control and decide the operations of the business and different companies compete for their own economic gains and free market forces determine the prices of goods and services. Such systems aim to separate the state activities from business operations. How does it work?
Capitalism is an economic system based on the private ownership of goods and services. Capitalist economies, also called “free market” economies, empower individuals and private businesses to decide most economic matters. This includes what things to make and sell, how much they cost, how to use resources and where to live and work. This system of “private enterprise” has been credited with unleashing human freedom and creating extraordinary wealth through individual initiative. Capitalism has also been credited with exploiting and oppressing humanity, spreading inequality, starting wars, and propelling the wholesale destruction of the global environment.
Yet the attempt to maximize profit has nothing to do with capitalism’s origins. For one thing, unlimited greed for personal gain is not capitalism-specific – it can be found in feudal and ancient civilizations as well. Furthermore, although capitalism begets instrumental rationality, instrumental rationality does not explicate its origins (Ibid: 30-31). Indeed, Weber posits that the origins of capitalism required an ethos to specifically refuse to enjoy the product of one’s
In the more developed regions of the world such as the United States, the United Nations and some of the Asian Countries, the form of economy there is Capitalism. Capitalism allows business owners to expand as much as they like since businesses are privately owned and the government have little to no influence on them. To the rich, capitalism is great, it allows them to be as rich as they want, but to the poor, capitalism only makes them poorer, it creates a disparity in social class system, and the varying changes in employment rate as a result of monopolization. Capitalism, due to monopolization makes the poor stay poor. To elaborate: a monopoly is when a person or a group owns the majority of the supply for the public.
Marx saw a similar use of appeasement in his economic system, where the rich capitalists conceded the bare minimum to maintain control of the working class. In his capitalist system “the worker receives means of subsistence in exchange for [their] labor power,” which serves no purpose but “immediate consumption,” whereas the capitalist receives “a greater value” than they had previously (Marx 209). The worker, despite creating additional earnings for the capitalist, only receives their “means of sustenance,” or their bare minimum for survival. Because the worker has been alienated from their work and the system however, they normalize this exchange, and are content with receiving a mere fraction of what they produce, unaware of their exploitation. Alienation provides the framework for both Douglass’ and Marx’s economic systems to function, as it allows the ruling class to establish a norm of
Marx understood capitalism to be founded upon a class division between the proletariat and the bourgeoisie. He believed society goes through five changes; Primitive, Ancient Slave owning, Feudal society, Capitalist and Communism being the final stage. A Capitalist society was considered to be the modern society where there will be conflict due to people striving for things that will benefit themselves, hence persons are self-interested. The devaluation of the human world increases in direct relation with the increase to the value of the world of things. Thus there is the alienation of the worker in the capitalist economy; the worker lacks control over the' disposal of his products, since what he produces is appropriated by others, so that he does not benefit from it.
Humans of this era and even civilizations before have always wanted three things: money, prestige, and freedom. All of these things are wanted, especially when it deals with economic structure. Communism, and capitalism have been compared on many levels, such as why they will or will not work, and which one works better. They are concepts that characterize opposite ways of thinking. One is extremely individualistic (Capitalism), while the other one (Communism) believes in putting the society before self.
The Cambridge dictionary definition of geography is “the study of the systems and processes involved in the world 's weather, mountains, seas, lakes, etc. and of the ways in which countries and people organize life within an area”. The idea of capitalism focuses on the human side of geography due to capitalism affecting peoples lives and socially, how the world develops. Capitalism is “an economic, political, and social system in which property, business, and industry are privately owned, directed towards making the greatest possible profits for successful organizations and people”, as defined in the Cambridge dictionary. Despite some criticisms towards capitalism, it is seen as the most successful economic strategy for a country compared to