Capitalism

Samantha CohenHannah Sadosky

What is Capitalism?

What is Capitalism?

An economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled

Means of production are privately owned and production is guided

Income is distributed through the operation of markets

An economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled

Means of production are privately owned and production is guided

Income is distributed through the operation of markets

Synonyms for Capitalism

Synonyms for Capitalism

Free market economyFree enterprise economy

Free market economyFree enterprise economy

History of CapitalismHistory of Capitalism

Has been dominant in the western world since the breakup of feudalism

Dates from the 16th century Pre capitalist nations existed in the ancient world

pockets of capitalism were present in later European middle ages

Has been dominant in the western world since the breakup of feudalism

Dates from the 16th century Pre capitalist nations existed in the ancient world

pockets of capitalism were present in later European middle ages

The Development of Capitalism

The Development of Capitalism

The growth of the English cloth industry during 16th, 17th, and 18th centuries

Capitalism was different from other previous systems: excess production over consumption enlargement of productive capacity rather than to invest in unproductive practices such as the pyramids or cathedrals

World war I turning point for capitalism

The great depression brought an end to laissez-faire in the 1930’s

The growth of the English cloth industry during 16th, 17th, and 18th centuries

Capitalism was different from other previous systems: excess production over consumption enlargement of productive capacity rather than to invest in unproductive practices such as the pyramids or cathedrals

World war I turning point for capitalism

The great depression brought an end to laissez-faire in the 1930’s

Capitalist Countries

Capitalist Countries

Over 80% of countries in the world today use capitalism such as:

United States BritainUnited Kingdom Cuba Japan China

Over 80% of countries in the world today use capitalism such as:

United States BritainUnited Kingdom Cuba Japan China

Government Planning

Government Planning

There is no government planning in a pure capitalist nation

There is no government planning in a pure capitalist nation

Government Interference

Government Interference

The only government interference is in protecting citizens

Constitution and Bill of Rights protects individuals rights

Laws: legal system, criminals punished

Police officers enforce the laws Court systems prosecute the laws

The only government interference is in protecting citizens

Constitution and Bill of Rights protects individuals rights

Laws: legal system, criminals punished

Police officers enforce the laws Court systems prosecute the laws

Advantages

Advantages

Can own property or businesses Can produce wealth No government interference Law and order Bankruptcy protection Patents and copyrights Banking regulation and insurance Consumer holds power in the economy

Can own property or businesses Can produce wealth No government interference Law and order Bankruptcy protection Patents and copyrights Banking regulation and insurance Consumer holds power in the economy

Disadvantages

Disadvantages

Rich get richer, the poor get poorer

It’s not accepted in most societies

People in power limit diversity and competition (weakens the system as a whole)

The consumer holds power in the economy

Rich get richer, the poor get poorer

It’s not accepted in most societies

People in power limit diversity and competition (weakens the system as a whole)

The consumer holds power in the economy

Government Structure

Government Structure

Operates in a democracy Free enterprise system State and federal regulations to keep the market safe for the customers and consumers

Laissez faire government (“leave to do”)

Operates in a democracy Free enterprise system State and federal regulations to keep the market safe for the customers and consumers

Laissez faire government (“leave to do”)

Land Ownership

Land Ownership

Anyone can own property They can use their land for almost anything they want such as open a business or have a farm

They can also rent their house on their property

Anyone can own property They can use their land for almost anything they want such as open a business or have a farm

They can also rent their house on their property

Business OwnershipBusiness Ownership

Everyone has the right to start a business

People have the right to produce whatever they want

People also have the right to distribute their products

Everyone has the right to start a business

People have the right to produce whatever they want

People also have the right to distribute their products

CompetitionCompetition

Sellers want a profit, customers want quality goods

Competition: the rivalry among sellers for consumers money

Competition benefits society: improves quality of products development of new products lower prices Allows individuals to start businesses and make more competition

Sellers want a profit, customers want quality goods

Competition: the rivalry among sellers for consumers money

Competition benefits society: improves quality of products development of new products lower prices Allows individuals to start businesses and make more competition

Profits

Profits

Definition: The incentive and reward for producing goods and services

subtract costs from revenue Profits are usually over estimated sometimes there is a loss not a profit

Must produce goods and services that there is a demand for to make a profit

Definition: The incentive and reward for producing goods and services

subtract costs from revenue Profits are usually over estimated sometimes there is a loss not a profit

Must produce goods and services that there is a demand for to make a profit

Consumer ChoiceConsumer Choice

The right of the customer to be able to choose what products or goods they want and where they want to get them

Consumer choice is always possible in a capitalist country You can choose whether you want a cheese burger from MacDonald's or Burger King

You can choose if you want Nike sneakers or Addidas

You can choose if you want a notebook from Staples or CVS

The right of the customer to be able to choose what products or goods they want and where they want to get them

Consumer choice is always possible in a capitalist country You can choose whether you want a cheese burger from MacDonald's or Burger King

You can choose if you want Nike sneakers or Addidas

You can choose if you want a notebook from Staples or CVS

Labor UnionsLabor

Unions Labor unions were formed because of bad working conditions such as:

low wages Long hours Unsafe working conditions

Labor unions are allowed in capitalist nations and some jobs even require you to join the unions

Labor unions were formed because of bad working conditions such as:

low wages Long hours Unsafe working conditions

Labor unions are allowed in capitalist nations and some jobs even require you to join the unions

Taxation

Taxation

Taxes provide revenue for the country’s government

The country then uses this money to serve its people

Taxation makes it hard for people to get rich

Taxes provide revenue for the country’s government

The country then uses this money to serve its people

Taxation makes it hard for people to get rich

Careers and EmploymentCareers and Employment

Many jobs are possible in a capitalist society

You could work in a factory or even own the factory

There are many jobs in politics too such as governor, senate, or even president

Many jobs are possible in a capitalist society

You could work in a factory or even own the factory

There are many jobs in politics too such as governor, senate, or even president

Works CitedWorks CitedLeone, Bruno. Capitalism. 2. St. Paul, Minnesota:

Greenhaven Press, 1986.

Ceanothus, Bayeu. “Capitalism.” Encyclopedia Britannica. 15.1998.

Amy, Douglas J.. "Capitalism Requires Government." Capitalism Requires Government. 2007. Politics at Mount Holyoke College. 16 Mar 2009 <http://www.governmentisgood.com/articles.php?aid=13&p=1>.

"What is Capitalism?." World Socialist Movement. 13-8-2006. World Socialist Movement. 16 Mar 2009 <http://www.worldsocialism.org/articles/what_is_capitalism.php>.

Everard, Kenneth E., and James L. Burrow. Business Principles and Management. 10th ed. cincinnati, Ohio: South Western Educational Publishing, 1996.

Leone, Bruno. Capitalism. 2. St. Paul, Minnesota: Greenhaven Press, 1986.

Ceanothus, Bayeu. “Capitalism.” Encyclopedia Britannica. 15.1998.

Amy, Douglas J.. "Capitalism Requires Government." Capitalism Requires Government. 2007. Politics at Mount Holyoke College. 16 Mar 2009 <http://www.governmentisgood.com/articles.php?aid=13&p=1>.

"What is Capitalism?." World Socialist Movement. 13-8-2006. World Socialist Movement. 16 Mar 2009 <http://www.worldsocialism.org/articles/what_is_capitalism.php>.

Everard, Kenneth E., and James L. Burrow. Business Principles and Management. 10th ed. cincinnati, Ohio: South Western Educational Publishing, 1996.