Sunday, March 4, 2012
What truly is Capitalism...
Based on the reading and class discussion, I believe capitalism is a government system completely dependent on its economy and the competition that lies between certain merchants and business owners to manufacture the best product for the lesser cost. However it's more complicated that I previously thought. From the reading I learned that merchants developed a technique called supply and demand where they would buy a product of surplus with little value from one area and take it to sell to an area with high demand for the product, thus increasing the profit made by the merchant. Also, joint stock companies arose as a part of capitalism to eventually organize commercial trading on a larger scale than ever before in history. However, capitalism has its downfalls because while everyone had a desire to compete and earn money, the quality of the goods produced decreased because everyone was trying to create the most turnover the fastest and for the least amount of money. So while the quantity of everything was increasing, the quality was quickly declining.
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OK, I'm going to be picky, but it is important: Capitalism is an economic theory. It has nothing to do with a system of government. (so democracy, theocracy, monarchy, all are government systems. Capitalism, socialism, communism are all economic systems...) According to the theory, government has no impact on a capitalist system of economics. It doesn't regulate or involve itself in the marketplace. All it does is tax the profits so it can generate revenue...otherwise, you are all set with the above!
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