Get premium membership and access questions with answers, video lessons as well as revision papers.

Describe capitalism as a theory of economic growth

      

Describe capitalism as a theory of economic growth

  

Answers


Dana
Capitalism is an economic and political system founded on the ideas of classical economists. Capitalism is a system in which the means of production such as the factory, firms, mines, railroads, ships belong to individuals and are operated by their profit. In a capitalist economy, the decision on production, what shall be consumed, exchange and trade and the prices of commodities are determined by individuals. Most of the rest of the population in a capitalist economy work for profits if and when the capitalists employ them. The fact that means of production are owned by a few individuals is of great importance because if you do or don’t own the factors of production determines your position in the society. If you belong to the small class of owners, the capitalist class, you can live without working while if you belong to the large group that does not own the means of production, the working class, you cannot live unless you work. The capitalist class gets income through profits by employing other people to work for them while the working class gets income in form of wages and salaries for work done. Profits makes the wheels go round in the capitalists’ economic system and the smart businessman is the one who makes the largest profits as possible and so the power and prestige of the capitalist are in proportion to his wealth and so the main objective of the capitalist must be to get richer and richer than he is. Since wage labor is one of the major expenses in production, it is therefore in the interest of the capitalists to pay as low wages as possible but to get as much work from the workers as possible. But since it is in the interest of the workers to get as much decent wages as possible to enable them to live a decent life as possible, in a capitalist system therefore, the interest of the employer and that of the employee are always opposed.

Dana05 answered the question on July 3, 2019 at 11:23


Next: Highlight the Marxists criticisms of capitalism
Previous: Describe socialism as a theory of economic growth

View More Economics Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions