What is Capitalism?Miss Jerome

What is the American Dream

“Capitalism”• As an Economic System• Means of production (capital) are privately controlled (not

government controlled)• Means of production—land, labor, capital• factories, tools, services, natural resources and raw materials

• Labor, goods and capital are traded in a market• Profits are distributed to owners or invested in new technologies

and industries• Wages are paid to labor• Prices• This is, and has been, the American way. That is why some

Americans do not want a GOVERNMENT health care plan.

Capitalism in your life• Your doctor has his/her own practice• You shop at the Sports Authority.• You eat at local restaurants. • You have Oxford health insurance (a private business) • NONE OF THESE ARE GOVERNMENT OWNED

We are not a PURE Capitalistic State

• We pay taxes that pay for…• Schools• Social Security• Highways• Post office

Hence…• We have the PUBLIC (government run) & the PRIVATE (private

businesses)

Adam Smith The Wealth of Nations• 18th century economist• Outlined modern capitalism• Believed in the “free market” (without government

interference)• Capitalism favors/believes in the

individual * Self-made man* Upward mobility* Rags to riches

Is Capitalism a good thing? Why? Why not?

• What is the alternative to capitalism? • How can capitalism be regulated?• What should be the relationship between government and the

workplace? Government and the individual?

Competition…

Why is competition good? Necessary?

• Within capitalist economic systems, the drive of enterprises is to maintain and improve their own competitiveness.

When is capitalism dangerous?

Karl Marx and Communism (attack on capitalism)

This is what Marx was seeing

The Haves

The “have nots”

Marx• May 5, 1818 – March 14, 1883) was a German philosopher,

political economist, historian, sociologist, communist. • Revolutionary book The Communist Manifesto (co-authored

with Friedrich Engels) 1848• Outlined communism• Writing in response to the Industrial Revolution in Europe

(what they saw as injustice)

Communist Manifesto1.) History of society is a history of class struggles• The oppressor and the oppressed• In Rome, in the Middle Ages. Rulers and slaves; nobility and

serfs. 2.) Today that struggle is between the modern bourgeois (owners of

the means of production in capitalist society—employers) and the proletariat (working class). -Lives only as long as they can find work-A “commodity” (is expendable, replaceable, homogeneous)

.

Marx Cont’d3.) Modern industry has converted the little workshop (artisans

—the shoemaker, the butcher, the basket-maker) into the great factory of the industrial capitalist. -Masses of laborers, crowded in the factory, organized like soldiers.

4.) The proletarians have attempted to unionize to varying degrees of success.

Marx Cont’d • 5. proletariat (the majority) can revolt against this system of

oppression (with nothing to lose).

Communism :• The overthrow of capitalism by the proletariat • This will cure the problems of the inequality.• Empower the “have nots” • Bring justice back into society.

A Communist Revolution

• What is Communism? • Why: To eradicate classes from society for the

purpose of ridding society of “haves and have nots”• To form an “egalitarian society” (society of equals)• A collective ownership of property and the

organization of labor for the common advantage of all members.• Eventually rule out government entirely. • Where did the individual go? Competition?

Communist motto: • “From each according to his ability, to each

according to his needs.”• You’re a farmer you produce what is necessary for

society. Hitting quotas (50 bushels of corn a day).• You’re a blacksmith you produce what is necessary

for society• There are no owners of business. • Everybody works for the common good of each

other. • No wages

Sounds good?

Perversions of “Communism”Communism becomes tyranny/dictatorship

America at the Turn of the Century