Definition of 'Capitalism'

An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.

Investopedia explains 'Capitalism'

In such a system, individuals and firms have the right to own and use wealth to earn income and to sell and purchase labor for wages with little or no government control. The function of regulating the economy is then achieved mainly through the operation of market forces where prices and profit dictate where and how resources are used and allocated. The U.S. is a capitalistic system.

Capitalism is an economic system characterized by private or corporate ownership of capital assets and goods. In a capitalist economy, investors are free to buy, sell, produce, and distribute goods and services with at most limited government control, at prices determined primarily by a competition for profit in a free market.[1][2][3] Central elements of capitalism include capital accumulation, competitive markets, and a price system.[4] Capitalism has existed under many forms of government, in many different times, places, and cultures.[5] Following the demise of feudalism, capitalism became the dominant economic system in the Western world. Capitalism successfully overcame a challenge by communism and is now the dominant system worldwide.[6][7] Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice. These include laissez-faire capitalism, welfare capitalism and state capitalism, all characterizing varying levels of state power and public capital control. A pejorative characterization, crony capitalism, refers to a state of affairs in which insider corruption, nepotism and cartels dominate the system. This is considered to be the normal state of mature capitalism in Marxian economics but as an aberrant state by advocates of capitalism. All such characterizations are subjective and tend to mark out a point of view either more or less sympathetic to attempts by voters to regulate business. Laissez-faire economists emphasize the degree to which government does not have control over markets and the importance of property rights.[8][9] Others emphasize the need for government regulation, to prevent monopolies and to soften the effects of the boom and bust cycle.[10] Most political economists emphasize private property as well, in addition to power relations, wage labor, class, and the uniqueness of capitalism as a historical formation.[11] The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy. Many states have what are termed mixed economies, referring to the varying degree of planned and market-driven elements in an economic system.[11]

Proponents of capitalism use historical precedent to claim that it is the greatest wealth-producing system known to man, and that its benefits are mainly to the ordinary person.[12] Critics of capitalism associate it with economic instability[13] and an inability to provide for the well-being of all people.[14] The term capitalism, in its modern sense, is often attributed to Karl Marx.[5][15] However, Marx was far more concerned with characterizing the sociological effects of capital economics. The "ism" was used only twice in the more political interpretations of Marx's work, which were primarily authored by Frederick Engels. In the 20th century defenders of the capitalist system often replaced the term capitalism with phrases such as free enterprise and private enterprise and replaced capitalist with investor in reaction to the negative connotations sometimes associated with capitalism.[16] The author Ayn Rand attempted a positive moral defense of capitalism as such but in highly romantic or literary terms that did not stand logical or historical scrutiny.[17] By contrast modern welfare economics has produced a number of detailed defenses of the mixed capitalist economy based on public ownership of infrastructure and defense of positive human rights such as housing or education. Amartya Sen in particular, in Development as Freedom[18] , his Nobel Prize winning work, outlined the reasoning by which many human societies have reached the common conclusion that mixed democratic capitalist economies with welfare systems were optimal to support human life. In practice, all early 21st century developed economies devote 40-60% of their GDP to taxes and the public sector. Those that devote more, such as Scandanavian countries, are also rated the most successful by their citizens, and by measures of economic well-being such as literacy, housing, lifespan, and gender equality. This suggests that capitalism is or has evolved towards some kind of compromise or truce with democracy, as Joseph Schumpeter first clearly predicted.[19] A "mode of production" (in German: Produktionsweise) means simply "the distinctive way of producing," which could be defined in terms of how it is socially organized and what kinds of technologies and tools are used. Under the capitalist mode of production

both the inputs and outputs of production are mainly privately owned, priced goods and services purchased in the market. production is carried out for exchange and circulation in the market, aiming to obtain a net profit income from it. the owners of the means of production (capitalists) are the dominant class (bourgeoisie) who derive their income from the surplus product produced by the workers and appropriated freely by the capitalists. A defining feature of capitalism is the dependency on wage-labor for a large segment of the population; specifically, the working class (proletariat) do not own capital and must live by selling their labour power in exchange for a wage.

The capitalist mode of production may exist within societies with differing political systems (e.g. liberal democracy, Social democracy, fascism, Communist state, Czarism), and alongside different social structures such as tribalism, the caste system, an agrarian-based peasant society, urban industrial society and post-industrialism. Although capitalism has existed in the form of merchant activity, banking, renting land, and small-scale manufactures in previous stages of history, it was usually a relatively minor activity and secondary to the dominant forms of social organization and production with the prevailing property system keeping commerce within clear limits.[3] This article deals with the rise of prosumer capitalism. Prosumption involves both production and consumption rather than focusing on either one (production) or the other (consumption). It is maintained that earlier forms of capitalism (producer and consumer capitalism) were themselves characterized by prosumption. Given the recent explosion of user-generated content online, we have reason to see prosumption as increasingly central. In prosumer capitalism, control and exploitation take on a different character than in the other forms of capitalism: there is a trend toward unpaid rather than paid labor and toward offering products at no cost, and the system is marked by a new abundance where scarcity once predominated. These trends suggest the possibility of a new, prosumer, capitalism.

COMMUNISM
The members of the society own them collectively. They are run by administrators but with no one having ownership interests. -Their answer Communism is an economic and political system in which the state owns the means of production and a single party rules. Consumer capitalism is a theoretical economic and social political condition in which consumer demand is manipulated, in a deliberate and coordinated way, on a very large scale, through mass-marketing techniques, to the advantage of sellers.

SOCIALISM

Socialism is the collective ownership by all the people of the factories, mills, mines, railroads, land and all other instruments of production.

Socialism means production to satisfy human needs, not as under capitalism, for sale and profit.

Socialism means direct control and management of the industries and social services by the workers through a democratic government based on their nationwide economic organization. Under socialism, all authority will originate from the workers, integrally united in Socialist Industrial Unions. In each workplace, the rank and file will elect whatever committees or representatives are needed to facilitate production. Within each shop or office division of a plant, the rank and file will participate directly in formulating and implementing all plans necessary for efficient operations.

Besides electing all necessary shop officers, the workers will also elect representatives to a local and national council of their industry or serviceand to a central congress representing all the industries and services. This all-industrial congress will plan and coordinate production in all areas of the economy.

All persons elected to any post in the socialist government, from the lowest to the highest level, will be directly accountable to the rank and file. They will be subject to removal at any time that a majority of those who elected them decide it is necessary. Such a system would make possible the fullest democracy and freedom. It would be a society based on the most primary freedomeconomic freedom.

For individuals, socialism means an end to economic insecurity and exploitation. It means workers cease to be commodities bought and sold on the labor market, and forced to work as appendages to tools owned by someone else. It means a chance to develop all individual capacities and potentials within a free community of free individuals. It means a classless society that guarantees full democratic rights for all workers.

Socialism does not mean government or state ownership. It does not mean a closed partyrun system without democratic rights. Those things are the very opposite of socialism. "Socialism," as the American Socialist Daniel De Leon defined it, "is that social system under

which the necessaries of production are owned, controlled and administered by the people, for the people, and under which, accordingly, the cause of political and economic despotism having been abolished, class rule is at end. That is socialism, nothing short of that." And we might add, nothing more than that! Remember: If it does not fit this description, it is not socialism no matter who says different. Those who claim that socialism existed and failed in places like Russia and China simply do not know the facts. Socialism will be a society in which the things we need to live, work and control our own livesthe industries, services and natural resourcesare collectively owned by all the people, and in which the democratic organization of the people within the industries and services is the government. Socialism means that government of the people, for the people and by the people will become a reality for the first time.

Socialism has never existed. It did not exist in the old U.S.S.R., and it does not exist in China. Socialism will be a society in which the things we need to live, work and control our own livesthe industries, services and natural resources are collectively owned by all the people, and in which the democratic organization of the people within the industries and services is the government. Socialism means that government of the people, for the people and by the people will become a reality for the first time.

To win the struggle for socialist freedom requires enormous efforts of organizational and educational work. It requires building a political party of socialism to contest the power of the capitalist class on the political field, and to educate the majority of workers about the need for socialism. It requires building Socialist Industrial Union organizations to unite all workers in a classconscious industrial force, and to prepare them to take, hold and operate the tools of production. You are needed in the ranks of Socialists fighting for a better world to end poverty, racism, sexism, environmental disaster and to avert the still potent threat of a catastrophic nuclear war. Find out more about the program and work of the Socialist Labor Party and join us to help make the promise of socialism a reality.

Goals and Values of Economic Systems Leave a comment

These goals and values of economic systems are something that all countries follow in order to strive. These are considered the Core Democratic Values of economics. Economic efficiency: Due to scarcity most societies maximize all the resources they have to work with. In the end they want to distribute goods to people.

ex. What is better to produce cars or minivans. Economic freedom: limitations on economic freedom. There are nations that limit the amount of income that you can make and also forbid you to make certain purchases or pose certain items. This generally plays into patriotism. ex. Many people come to America for economic freedom where you can make your money and pursue your dreams. Economic Security and Predictability: The nations leaders know what to expect and rely on. The government and economy should be a safety net of sorts. It should protect people who are in the state of

Unemployment Natural Disaster Unfavorable Conditions Providing social security or retirement programs.

ex. The government has organizations that helped Katrina victims. Economic equity: How are we going to divide our economy? What is fair? What is equal? and many more questions are asked by society. ex. Government gets 50% of profits on taxes and the workers keep the other 50%. Economic Growth: A nations standard of living will increase if the economy will. ex. Indias standard of living grew due to the economy getting bigger and becoming a world power.
1. China

Source: CIA World Factbook, 2007 Mao Zedong took control over China in 1949 and proclaimed China as the People's Republic of China, a communist country. China has remained consistently communist since 1949 although economic reforms have been in place for several years. China has been called "Red China" due to the communist party's control over the country. Ads

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2. Cuba

Source: CIA World Factbook, 2007 A revolution in 1959 led to the taking over of the Cuban government by Fidel Castro. By 1961, Cuba became a fully communist country and developed close ties to the Soviet Union. 3. Laos

Source: CIA World Factbook, 2007 Laos, officially the Lao People's Democratic Republic, became a communist country in 1975 following a revolution that was supported by Vietnam and the Soviet Union. 4. North Korea

Source: CIA World Factbook, 2007 Korea, which was captured by Japan in World War II, was divided following the war into a Soviet north and American south. Despite being led by the USSR beginning in 1945, North Korea did not become a communist country until 1948. 5. Vietnam

Below, you will see some of the most socialistic nations in the world today:

China Denmark Finland Netherlands Canada Sweden Norway Ireland

New Zealand Belgium

Traditional

Ethiopia Uganda

Capitalist
The United States of America. Brazil Japan Sudan Sweden Colombia