Capitalism is a liberal-market system: an economic system based on the private ownership of the means of production and distribution of goods, characterized by a free competitive market and motivation by profit. Capitalism has three essential features: 1. Private ownership- where individuals own land, machines, and factories. 2. Marketing competition- competing with one another, where the own decide what the price is and what product is produce.
Capitalism Capitalism is an economic and political system where economy production is controlled by private owners and consumers instead of the government. The theory of capitalism was created by Adam Smith, author of “The Wealth of Nations” to achieve economic freedom. He reinforced the term “Laissez- Faire” meaning the government should not interfere with the economy because the “Invisible Hand” or supply and demand will naturally set the prices and quantity. Consumers’ actions influence business owners’ decisions on what to produce, how to produce and for whom to produce. Capitalism is most often seen in a market economy.
In modern society it is a capitalist class who own and conrtrol these means of production. Marx pointed out that in early societies such as the hunter gatherers it was a classless structure, which he called "Primitive Communisim" and this worked because everyone owned the means of production communally. There was no need for a nuclear family, people lived in tribes or as Engels called it the "Promiscuous Horde". As production developed wealth was created, some members of society saw the advantages of private property and so society changed by being split into those who controlled the means of production and those who no longer did. This led to the patriarchal monogomous nuclear family.
In the United States personal freedoms were highly valued. Citizens had maintained freedoms, opposing political parties and economic choices. However, the USSR was a classless society in which the government owned everything. Citizens living in the Soviet Union were under a totalitarian government. Citizens had no freedoms and did not pick their own leader.
Capitalism mostly has a "free market" economy, which means people buy and sell things by their own judgment. Opposingly, socialism is an economic system characterised by a kind of society where people work together to get a fair standard of living (TheFreeDictionary, 2013). Socialists believe capitalism is bad for society and the government is responsible for reducing it via programs that benefit the poor such as free public education, free or subsidized healthcare, higher taxes on the rich. In contrast, capitalists believe that government does not use economic resources as efficiently as private enterprise and therefore society is better off with the free market determining economic winners and losers (Diffen, 2013). In capitalism, the market determines price, including the price of labour.
According to the bizfinance.com, Capitalism and Socialism are political, economic and social systems in use by many countries around the world. In Capitalist system the means of production are owned by private individuals. That is to say, that main goal of such a system is maximizing profit for shareholders and partners. A good example of the Capitalists system is the United States of American where land and businesses etc are owned by private individual, but the Government interferes by putting in and enforcing necessary legislation to protect individuals. Competition between various businesses ensures a variety of goods and services to consumers, in a range of prices.
Capitalism and communism have always been viewed as two opposing political and economic structures. First and foremost, capitalism is an economic system influenced by individuals and private organizations by which there is freedom of the market. Communism however, is defined as an economic and political system whereby all resources are collectively owned and governed by the state. Even though communism is subjected to bringing about ‘declining suffering of public condemnations’; still, it is a maintained political system within various Countries. So could communism be a practical idea?
Capitalism for example, thrives on the idea that the Government is democratic, property can be privately owned by its citizens, wealth is not evenly distributed, and there are social classes of people from rich to poor. Capitalism is designed by nature to allow individuals, not the Government, to control resources. Profit is then distributed at the will of the private owner. Capitalism promotes competition and individualism through aggressive business tactics not controlled by any government authority. Capitalism was the child of feudalism, ruled the middle ages, and still thrives in the modern world to date (Hands,
Neoliberalism refers to the concept of restricting government involvement in stimulation of the economy, allowing the ‘invisible hand of the market’ to dominate, believing this will lead to greater economic prosperity and growth. The model stresses the efficiency of private enterprise, liberal trade and free markets and therefore looks to maximise the role of the private sector in leading the economy, rather than the public sector. Of course there is an element of overarching government regulatory control in place however the model is very much capitalism driven. One of the most prominent factors of neoliberalism is the rule of the market. As mentioned previously, Adam Smith, a highly regarded economist, demanded that in order for economic success, the”invisible hand of the market” must be in control, rather than the government.
Now we will talk about mode of production. It is the organization of economic production in a given society and the way it evolves over time. In the capitalist mode of production both the inputs and outputs of production are privately owned, the main goal of production is to achieve maximum profit, and in capitalism you have the working class selling their working power in exchange for wages and the capitalist paying them at