Chapter 1: What Is Capitalism Flashcards
Unit 1: what is capitalism
Capitalism is the ideology or set of ideas about how the economy works. Capitalism is an economic system practised in the USA
difference between communism and capital
capitalism
- people need freedom
- when people compete against one another, they achieve greater things
- some people have more than others because they make better use of their abilities
- governments should not interfere with the economy or with the way that people make their own living
- private ownership of the economy and profits for individuals
Communism
- people need one another
- when people work together as equals, they achieve greater things
- No one should have more than anyone else, everybody’s needs are equally important
- Governments should make sure that everyone’s needs are met
- total government controls the economy. No private ownership or individual profit
The main idealogy of capitalism
there should be a free market economy in which there is no involvement of the government
There is nothing wrong with society in which some people are rich and other people are poor. They believe that people will work harder if they can make more money and keep it
what does capital mean
money used to buy or invest in land, mines, factories, and businesses
the most important part of the government economic policy in capitalist countries
is to protect the rights of individuals which may mean protecting the rights of individuals who own huge industries and gather great wealth while others remain poor
most powerful capitalist country in the world after WW 1
The USA
Main features of American capitalism
entrepreneurship
entrepreneurship
- taking risks
- using initiative
- investing their own money in the business
being willing to start a new business
- accepting full responsibility for the profits or losses made
Main features of American capitalism
competition
competition between businesses is an important feature of Capitalism. Capitalists believe that hard work and creative imagination can lead to success
When a company develops a new product, it is usually sold at a high price this may be because the demand for it is greater than the supply. When it has been on the market for some time, the price goes down as other companies make new and similar products.
A successful business makes consistent profits against its competitors
Main features of American capitalism
(Rugged individualism) meaning
Rugged individualism is the belief that all individuals can succeed if they try hard enough. The republican’s party president Herbert Hoover used the term in the USA during the 1920s
If you were in financial trouble, you should help yourself and not expect others to help others
The republican party was in power in America in the 1920s it believed that the government should not offer much help to people in economic difficulties
Main features of American capitalism
A free market
America’s free-market economy was based on supply and demand with little or no government control. The price of goods and services was determined by supply aand demand.
Main features of American capitalism
Minimal state control over the business
the government should interfere as little as possible in the economy. the economy should be driven by market forces, not by the government.
Herbert Hoover believed that individuals are responsible for their economic situations
Laissez-Faire meaning
means “let go”
The American dream of individual possibilities (1920s)
the 1920s in America were the golden ages where all things seemed possible
The economy was booming and it was a time of great prosperity and wealth for many Americans. People from all over the world came to the US in search of the American Dream meaning that anyone can become rich if they work hard
What does the American national anthem contain?
“the land of the free and the home of the brave”
What did the American dream promise?
The American dream is that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to ability or achievement… It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are regardless of the fortuitous circumstances of birth or position
