Economic Systems: Capitalism

explanatory Essay
1104 words
1104 words

Capitalism Capitalism is an economic system where people and private businesses are able to control their own trade and means of production for profit. It emerged as technology, production and trade began to increase. During the industrial revolution, capitalism started to influence people more. Some characteristics of capitalism are capital accumulation, competitive markets and wage labor. The government isn’t supposed to interfere with trade. Individual markets raise or lower their prices due to competition and demand for goods. There has been a lot of debate over the usefulness of capitalism. Some believed capitalism had negative effects while others saw more benefits. Adam Smith and Andrew Carnegie pushed for a capitalistic society, but had different beliefs on how economic wealth should be distributed; Karl Marx advocated for a communistic society where wealth was evenly distributed. Karl Marx was born middle-class in 1818 at Trier, Germany (Weber 39). He was more communistic than capitalistic; he saw many flaws in the system. Marx believed that everybody should have equal wealth. In his eyes, capitalism split people into two main classes, the bourgeoisie and proletariats. The bourgeoisie was the wealthy class that owned the factories and businesses. The proletariats were the wageworkers that could only sell their labor (Weber 14). Capitalism made the gap between to two classes even larger by making the rich richer and the poor poorer. In 1867, Das Kapital was published arguing about the unfair society capitalism creates. The bourgeoisie has the power to control who works when and for how much. They also control the media, government, and other social powers which give them more influence over the workers. The proletaria... ... middle of paper ... ...rnegie was a wealthy upper-class man and believed in survival of the fittest, he was worried about the “proper administration of wealth.” (Weber 45) He believed that wealth should be in the control of the only a handful of people and they should decide how to administer the wealth; however, he didn’t want a corporate aristocracy either. In 1889, Andrew Carnegie wrote a book called The Gospel of Wealth which offered a solution to these problems. He believed in philanthropy and wanted the wealthy to give their money away as they saw fit. His book stated, “A man who dies rich dies disgraced.” (Weber 46) It was the idea that the wealthy should give away their surplus money wisely to the lower classes. Carnegie wanted people to not spend money on useless luxuries and use it on society. The rich still had a choice as to how much and who to share their wealth with.

In this essay, the author

  • Explains that adam smith was against mercantilism and believed the government should stay out of the way of economics. he called his idea the "invisible hand" because it would benefit people without them realizing.
  • Explains adam smith's wealth of nations, which elaborates the idea of the invisible hand. it states that everyone has certain advantages over each other.
  • Explains that capitalism is an economic system where people and private businesses can control their own trade and means of production for profit.
  • Explains that andrew carnegie supported capitalism and the trickle-down theory. he was a wealthy upper-class man who believed in survival of the fittest, but worried about the "proper administration of wealth."
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