Capitalism is a name given to a socio-economic system in which private ownership means profit to the owner. The means of production is controlled by the owner, so the profit belongs to the private business owner. In capitalism, the production, distribution and price of goods and services are determined by free market.
Labor are referred to as wage labor
Usually capitalistic competition policies are based on the efficiency of economic feasibility. In a capitalist system the labor is called wage labor as wages must be paid to the laborers. The means of production means everything else that is needed to produce goods including land and the property rights to it. Capital is the value of items of value that can produce more wealth.
Capitalism is a socio-economic system
Capitalism is considered a socio-economic system as it is not considered just as a way of earning money and making a living, but it is also a way of thinking about social organization. The basis of capitalism is the idea of individualism and that individuals have the right to economic freedom.
It’s important to notice the existence of laissez-faire capitalism and then afterwards its replacement by the Keynesian system.
Laissez-faire
In French Laissez-faire means ‘letting go’ and laissez-faire capitalism takes place when the government lets all of its control over trade and economic concerns go and lets the market take over in all aspects. There is a crucial theory behind laissez-faire capitalism and that is unemployment is voluntary due to the individual choice to pursue economic gain.
Keynesian system
The Great Depression, which is known as a period of harsh economic decline in the 1930s, led to high unemployment rates and these were not at all voluntary and this led to the death of laissez-faire capitalism. Capitalism’s rescue is credited to English economist John Maynard Keynes. He has got an innovative approach of macroeconomics by which business cycles and labor markets are analyzed and his theory ans suggestions helped prevent further economic depression. Today the further growth of of capitalism is by following Keynesian economic methodology.
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{ 4 comments… read them below or add one }
Capitalism? Here I thought it was Karl Marx’s term describing European mercantilism, for which he was familiar, where the elite few in government and business unite to rule the rabble, or “maggots,” as Sunstein called us. In America, far removed from those Old World ideas, individul freedom led to a free market and prosperity unknown anywhere else, which I gather many would like to critically call capitalism today. This is explained on my site http://www.claysamerica.com if you care to look it up.
Corporatism, and the laws and regulations surrounding incorporation reveal a totally different face on the realities in American life today! The corporation’s synthetic “person-ship” under the law has become a most insidious extraction tool to humanity, and has destroyed America, the richest country resource-wise, the world has ever known – raped to fill the coffers of its businessmen in unscrupulous fashion, and through wars and bullying of other nations the consumption of over 80% of the worlds resources to evolve, in the last 200+ years the great hulking American Neanderthal, force fed, bigger bones not found in history! Appetite beyond sustainability, a carnivore of greatest proportion known in all mankind, eats more meat in a day than required to sustain large groups outside his country for weeks! This poor beast and his ilk face a sad end, as the tool of corruption, his “dollar” collapses and he is abandoned for a more productive, easy to maintain, cheaper, Asian vegetarian form of labor, a malleable, peaceful, light, fast individual, more suited to the modern, nuclear powered, hydraulically assisted, electro-mechanically muscled, computer driven factories, built with capital the American Neanderthal generated, his businessmen absconded with, to Asian markets, and are currently receiving Greater ROI rewards from – GM(China) up 30% this year! GM(America) bankrupt! The money, now in unmanipulated Yuan, safe, invested on the Beijing , Shanghai, and Hang Seng markets, and gold backed! The great hulking large bodied, high maintenance, American Neanderthal stands in “Unemployable lines”, soup kitchens, Tent cities, Hoovervilles, Shanty Towns, Tar Paper Shacks at cities edges, bused there by even New York City, who pay one-way bus tickets for him, out of the City! These are the “Legacy Workers” of the capital flight, job flight, industry flight, factory flight – to Asia! Corporatism and Capitalism have migrated to Asia! The great hulking American Neanderthal is still entrapped by the American Medical Cartel, the Oil Barons, for whom he fights as mercenary in Afghanistan to push clearance for Halliburton(Dubai)’s pipeline to Turkmenistan and the oil fields there! American patent law, not enforcible world-wide has been breached so many times by Asian manufacturers, industries as to be laughable, American educational standards once the benchmark from which all others were measured have fallen to 32nd in the world, China has more post-graduates with IQ’s of 130+ than America has high-school students, drop-outs included, India leads the way in Computer Engineering, and new Medical Stem Cell research exceeds American understanding, and is published in Mandarin, a language we cannot read, while they remain, to a man, multi-lingual! The Asian intelligentsia have hi-jacked the American position of supremacy here too! and the Great Hulking American is facing extinction with his dollar, his own great appetite his downfall, unable to survive physically on the amount of calories his efforts are now worth, unable to pay for the gasoline or vehicle it takes to haul his great hulking carcass to and from his workplace, and struggling to pay for big enough housing for his family, in face of the Asian Fact in the world today, his corporatism his own undoing!
I started to get upset at how you were misrepresenting capitalism, but then I read “He has got an innovative approach of macroeconomics” and realized you’re just stupid.
Uncle B, move to fricking China or some other communist country. It is people like you that are RUINING the very reason this country was created! Life can’t be fair to EVERY single person, my life hasn’t been so great. I don’t have health insurance, work has been bad the last 2 yrs (I am in a construction industry) and am uneducated (2 year degree), but I BELIEVE in what and why this country started, and it was because of government that tried to control too much. Let’s not forget that, lest we start another civil war and another country spawn from this one as we did over 200yrs ago. Wait, let us do that, I am willing to fight for what I think is MY rights!