Flashcards in Chapter 4 Deck (28):
An economic system that operates on the basis of profit and market exchange and in which the major means of production and distribution are in private hands
An economic system characterized by public ownership of property and a planned economy
Worker control socialism
Individual firms respond to a market when deciding what to produce and acquiring the necessary factors of production. Although the workers manage their factories, the capital assets of each enterprise are owned by society as a whole and not by private individuals.
Who was the foremost capitalist of the Renaissance?
What kind of capitalism emerged in the Fuggers' time?
capitalism that is based on mutual dependence between state and commercial interests.
During the Industrial Revolution, industrialists replaced merchants as the dominant power in a capitalist economy. This is associated with large-scale industry.
What produced industrial expansion in the US?
a sound financial base, the technology for mass production, expanding markets for cheaply manufactured goods, and a large and willing labor force
Came to be as carious industries strove to strengthen their financing and shore up their assets. It's characterized by pools, trusts, holding companies, and the interpenetration of banking, insurance, and industrial interests.
State welfare capitalism
Government plays an active role in the economy, attempting to smooth out the boom-and-bust pattern of the business cycle through its fiscal and monetary policies. Also, government programs like Social Security and unemployment insurance seek to enhance the welfare of the workforce, and legislation legitimizes the existence of trade unions.
What helped usher in state welfare capitalism?
The economic and political challenges of the Great Depression of the 1930s.
These days, the increasingly worldwide scale of capitalism leads many contemporary commentators to see _______ _______ as a new stage or level of capitalist development?
The process in which economies of most countries are becoming more and more integrated thanks to the computer, Internet, satellites, cell phones, and other technological advances.
What are the four key features of capitalism?
1. the existence of companies
2. profit motive
4. private property
Implies and reflects a critical assumption about human nature: that human beings are basically economic creatures, who recognize and are motivated by their own economic interests.
Who wrote An Inquiry into the Nature and Causes of the Wealth of Nations (1776)?
According to Adam Smith, what is free competition?
The regulator that keeps a community activated only by self-interest from degenerating into a mob of ruthless profiteers.
french meaning- to let people do as they choose
Money that is invested for the purpose of making more money. (closely related to private property)
Two arguments for capitalism
1. The argument that the moral right to property guarantees the legitimacy of capitalism
2. The utilitarian-based economic argument of Adam Smith
What is a common defense of capitalism?
The argument that people have a natural right to property
What does Adam Smith say?
Each person's individual and private pursuit of wealth results as if guided by an invisible hand in the most beneficial overall organization and distribution of economic resources.
A concentration of property and resources, and thus economic power, in the hands of few. (Karl Marx)
Assists business and protects it from competition
separation of individuals from the objects they create, which in turn results in one's separation from other people, from oneself, and ultimately from one's human nature. (Karl Marx)
3 issues relevant to the US today
1. decline of American manufacturing
2. business's obsession with short-term results
3. changing attitudes toward work
buying parts or whole products from other produces, both at home and abroad