Chapter 5: Capitalism - A Brief Summary Of Its Origin Development and Critique

Question 1

What is the invisible hand

Answer 1

The invisible hand is a self-regulated market mechanism that stabilizes the markets and distribution of goods and services

Question 2

Define capitalism

Answer 2

A system in which goods and services are produced for profitable exchange

Question 3

Name the two important proto-capitalist developments

Answer 3

Feudalism and mercantilism

Question 4

Explain the commercialisation model (Adam Smith)

Answer 4

Commerce and trade were able to develop into a global market economy once social restraints and barriers to economic trade no longer existed.

The commercial model is a method used to understand the historical development of capitalism

Question 5

Explain feudalism

Answer 5

The hierarchy relationship between a lord and his peasants. Feudalism is a socio-economic system focused mainly on acquiring agricultural lands and promoting agricultural development for growth

Question 6

Explain mercantilism

Answer 6

It is a socio-economic system that focused on international trade to accumulate wealth. Whereas feudalism focused mainly on agricultural development and accumulation of farming lands

Question 7

What are the four aspects of mercantilism that promote unification

Answer 7

• firstly, mercantilism was a system of economic policy designed to promote a unified state, such as regulation of industrial activity
• the second aspect of mercantilism was intended to promote the power of the state and all economic activity was aimed at this objective. This included the supply of commodities and services such as ships
• the third aspect focused on protecting domestic production
• lastly mercantilism was also aimed at monetary policy

Question 8

Explain John Locke’s theory

Answer 8

Human have a natural right to private property and that unoccupied land should go to those who would render it fruitfully

Question 9

The theories focused on private property rights, limited government intervention, and a self-sustained economic mechanism are argued by

Answer 9

Locke, Hume and Smith

Question 10

Explain Adam Smith’s theory

Answer 10

Adam Smith explains that sympathy is developed through what he refers to as the “impartial spectator”. As the impartial spectator, one imagines what it is to be in another’s shoe and through that act of imagination one attempts to feel the pains and joys of the other person.

Humes view on sympathy somewhat differ, he believes sympathy to be feeling the emotions of the other person

Question 11

Explain utilitarianism (Jeremy Bentham)

Answer 11

Bentham argues that our actions should not be judged in terms of their motives, but only in terms of their utility or the outcome of those actions.

In that our actions should be directed at that which will maximize utility or “the greatest amount of good for the greatest number”

Question 12

What’s the difference between Mill’s ‘rule utilitarianism’ and Bentham’s ‘act utilitarianism’

Answer 12

• act utilitarianism: we must evaluate the morality of each act
• rule utilitarianism: we must confirm to rules that have shown overall to bring about the greatest amount of good

Question 13

Explain alienated labor

Answer 13

The condition where workers are completely separated from their labor, an example of this is the fact that the worker himself never enjoys the fruits of his labor or the product he produces

Question 14

What are the different forms of alienation

Answer 14

• workers are deprived off and hence alienated/separated from their products
• workers are also alienated from the environment in which they work because of the harsh working environment
• labor of workers is alienating because they feel indifferent about their work and they are not able to fulfill their true human needs and aspirations within their work
• division of labor is alienating because it’s separates people into rigid categories and set human activities in an ‘alien’ relation to each other

Question 15

Marx’s notion of capitalist exploitation makes which two claims

Answer 15

1. Exploitation is morally wrong and we should not tolerate or generate any form of it
2. If the working class is being exploited by wealthy capitalists then they have grounds for taking action against the system

Question 16

What are the different forms of exploitation that Marx identified

Answer 16

• child labor
• long working hours
• dangerous working environments

Question 17

What is historical materialism

Answer 17

Marx argues that all social institutions and social consciousness rely on the economic structure of society

Question 18

What is a Marxist revolution

Answer 18

It will be the uprising of the working class against the rich capitalist class which will result in the equal distribution of wealth and resources

Question 19

What is neoliberalism

Answer 19

The current global economic market system. It is a form of governmentality which legitimises and justifies the state which is responsible for the development of a country’s economy.