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.

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According to the central bank and government studies, the US demand for loans fell in the second quarter for every major category bar prime residential mortgages due to tightened credit standards set by the banks making the borrowers cautious.

The US Federal Reserve observed in its quarterly survey of senior loan officers, conducted between July 14 and July 28, that the percentage of banks that tightened loan standards for business and households was slightly lower than in the first quarter.

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The recent economic crisis may be the worst time for many of us, but it may be an opportunity for us to look back at history and learn how the previous generations have dealt with such situations and apply the same rules.

The current downfall may be exactly like the Great Depression that occurred long time back and thus taking some tips from the grandparents or great grandparents that went through it, we can gain perspective on our own situations and make things better. Here are some of the steps to help us fight in this time of crisis.

The 7 Golden Tips of Survival

1. Quit going on credit.

One of the first lessons learned by people who survived the Great Depression was to never borrow money unless you have a clear plan for how you’re going to pay it back. And when layoffs are a reality, expecting to pay for it with your Christmas bonus or your next paycheck is not a sound plan.

If you don’t have the cash to make a purchase, then don’t buy it. If you have credit cards, make sure to pay the balance off every month. If you can’t pay off the balance, then cut up the credit card(s) and work on paying down what you owe.

2. Build good relationships with family and friends.

Be honest with your family and friends about your financial difficulties. They will see you through difficult times. Try to find out ways to help each other and discover new ways to barter. Families that stick together in difficult times develop stronger bonding by cherishing the simple pleasures of life.

Having fun doesn’t necessarily mean spending a lot. People still had fun during the Great Depression. Teenagers had dance competitions; people played monopoly, did puzzles, read books and listened to the radio. It did take some effort but they had fun without hanging out at the mall and so can you. Talk to you children about the financial crisis and get the adult kids to put in their share. This way the whole family will feel connected and the hard times won’t be so difficult to pass.

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