What is Capitalism?
SORRY for my audio 3:30-5:30, my mic broke 😞
Capitalism is defined most easily by its two main characteristics. Firstly, in a capitalist system, something called private property exists. This means that property ranging from factories and businesses, to more material things like books and tvs, are privately owned by individuals, as opposed to by the state. Secondly, in a capitalist system, people can trade this property, or these assets, freely. What this means is that nobody can force somebody else to buy or sell something.
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So, you own yourself your time and your skills. You sell these things which are your private property, to a business for wages. then you see a tv that you like it belongs to somebody else, and you freely, under no coercion, buy it from somebody else using your wages who freely and under no coercion from you, sells it to you and now it’s your private property. This is basically how capitalism works.
In a capitalist system, individuals own private property, and can do what they want with it, sell it, buy more of it, or give it away, anything. This can partly be done by ensuring people have good property rights, which businesses or government cannot easily encroach upon, and that businesses remain competitive, and do not illegally force people to buy or sell things.
In a capitalist system, businesses tend to be focused on profit, which is the financial gain you get from selling something for a price more expensive than you bought it. The more things you sell, the more profit you make. Proponents of capitalism argue that this profit motive produces competition between businesses because each one wants to make the most profit, which in turn makes businesses work more efficiently to produce better products, faster. Opponents say the profit motive rewards greed, and selfishness, and it doesn’t always make products better. With increasing profits supposedly incentivizing competition, this requires a lot of faith in customers buying a range of products large enough to create competition between the different producers, but sometimes monopolies exist which is where one business dominates a market, also some industries simply can’t be competitive, like tap water and the railways. The existence of monopolies and uncompetitive industries reduces the need for businesses to make the products good, and it allows them to charge customers whatever they want. Also, in capitalist systems customers often buy things they simply don’t need or that they throwaway easily, like fast fashion, or the latest iphone, which is bought and then thrown away when the next generation comes about. As well as this, capitalism’s almost singular focus on profit and competition means that external costs to the environment are often ignored by businesses and individuals. For example fossil fuels are finite, coal and oil are running out, and our burning it at the rate we are is also accelerating climate change. In a capitalist system, businesses have no need or incentive to care about these external costs, all they focus on is in increasing profit.
Proponents also argue that capitalism is a fairer system than its alternatives. According to proponents, in a capitalist system, the best businesses, the ones that can make the best products the fastest, and in the most bulk will receive the most money from investors and customers alike, and thus rise to the top. Opponents of capitalism however disagree that capitalism is fair or that it lets the best products and people rise up. What if you come from a rich family where you’ve got a headstart in the capitalist system because you don’t need to rise up or try hard to do well
Proponents of capitalism also argue that Capitalism is one of the fundamentals to individual freedom. Governments are more likely to leave people alone and not be authoritarian in the capitalist system they say because they are not allowed to encroach upon individuals right to own and do what they want with their own property. People can change between jobs and there is often, not always, a transactional relationship between how much work you put in, in terms of hours and skills amassed, and what you get out of a job, in money. Proponents also say that capitalism has brought millions out of poverty.Opponents of capitalism disagree, they say the poorest individuals, no matter how hopeful or optimistic, often find rising to the top much harder.
Sources: https://docs.google.com/document/d/e/...
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