Week 3 Flashcards
Capitalism
Capitalism- an economic system that operates on the basis of profit and market exchange and in which the major means of production and distirbution are in private hands.
Key features of Capitalism: (4)
- Companies are the key players
- Profit driven
- Companies compete with one another
- Private ownership
2 arguments for capitalism:
- The natural right to property- people have a fundamental, natural right to property and due to this right, we have the capitalist system.
- Adam Smith’s concept of the invisible hand- Smith argues that when people are left to pursue their own interests, they will, without intending it, produce the greatest good for all
Criticisms of capitalism (4)
- Inequality
- Human nature (only making money)
- Selective power/competition
- Exploitation and alienation
Explain the “inequality” criticism of capitalism
some critics of capitalism go on to maintain that the inequality inherent in the worker-capitalist relationship is itself morally undesirable
Explain the “Human Nature” criticism of capitalism
critics claim that capitalism presents no higher sense of human mission or purpose (besides making money), whereas other views of society and human nature do
Explain the “Selective power/competition” criticism of capitalism
Karl Marx argued that capitalism leads to oligopolies- a concentration of property and resources, and thus economic power, in the hands of a few.
Explain the “Exploitation and Alienation” criticism of capitalism
Critics believe that capitalists are only able to make a profit through exploitation.
- The more capital they accumulate, the more they can exploit workers.
Possible counter-arguments to Capitalism (3)
- Benefits of the system outweigh its weak points
- The system can be internally modified by political action
- Blaming the government for interfering too much
