Dominate viewpoints of Capitalism

October 27, 2008

Capitalism is a very complex Economic system that is based on many factors that fundamentally set Capitalism apart from other Economic systems. Some main factors include the Free Market, Land/Labor/Capital, the Invisible Hand, Social Mobility, etc, that all interconnect to form Capitalism. Capitalism could be defined as follows " An Economic system in which goods and services are produced, distributed and consumed through the mechanism of free markets and profit motive." With this definition we are introduced to some terms that have already been mentioned, one being a Free Market. A Free Market consists of products being sold at a price that is agreed on by the seller as well as the buyer. Another word for the amount sound could be the Market Price, which is the lowest amount the seller is willing to sell for and the highest amount the buyer is willing to buy a product for. A product is also considered Capital, which is the combination of Land (natural resources) and Labor (actual work necessary or done) used together to create a product to be sold. The rules of Supply and Demand hold true in this system, but controlled market leading to fixed pricing of Capital goes against Capitalism. Another important term is the invisible hand. It is believed to be almost a " magical" force that organizes society without government intervention. The invisible hand is believed to guide and maintain order in the free market, which could be done by allowing all the factors involved to compete and strive to be on top. The fact that a Free Market gives everyone in the market the chance to compete, Capitalists believe that Social Mobility is an important idea. They think that because of the competition Free Market brings everyone strives because of the slightest chance that they could rise above the ranking they are already at, and gives them the incentive to work harder. They view incentive as freedom because of the choice to either strive to compete in the market or turn the other way and choose a different path. Overall Ca pitalism speaks to maintain the free Market and help better the Economy.