Portal:Capitalism

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The Capitalism Portal

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. The defining characteristics of capitalism include private property, capital accumulation, competitive markets, price systems, recognition of property rights, self-interest, economic freedom, meritocracy, work ethic, consumer sovereignty, economic efficiency, profit motive, a financial infrastructure of money and investment that makes possible credit and debt, entrepreneurship, commodification, voluntary exchange, wage labor, production of commodities and services, and a strong emphasis on innovation and economic growth. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

Economists, historians, political economists, and sociologists have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free-market capitalism, anarcho-capitalism, state capitalism, and welfare capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition, and state-sanctioned social policies. The degree of competition in markets and the role of intervention and regulation, as well as the scope of state ownership, vary across different models of capitalism. The extent to which different markets are free and the rules defining private property are matters of politics and policy. Most of the existing capitalist economies are mixed economies that combine elements of free markets with state intervention and in some cases economic planning.

Capitalism in its modern form emerged from agrarianism in England, as well as mercantilist practices by European countries between the 16th and 18th centuries. The Industrial Revolution of the 18th century established capitalism as a dominant mode of production, characterized by factory work and a complex division of labor. Through the process of globalization, capitalism spread across the world in the 19th and 20th centuries, especially before World War I and after the end of the Cold War. During the 19th century, capitalism was largely unregulated by the state, but became more regulated in the post–World War II period through Keynesianism, followed by a return of more unregulated capitalism starting in the 1980s through neoliberalism.

The existence of market economies has been observed under many forms of government and across a vast array of historical periods, geographical locations, and cultural contexts. The modern industrial capitalist societies that exist today developed in Western Europe as a result of the Industrial Revolution. The accumulation of capital is the primary mechanism through which capitalist economies promote economic growth. However, it is a characteristic of such economies that they experience a business cycle of economic growth followed by recessions. (Full article...)

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Towards the late 1970s, Hong Kong became established as a major entrepôt between the world and China. The city has developed into a major global trade hub and financial centre, and is regarded as a world city and one of the eight Alpha+ cities. It ranked fifth on the 2014 Global Cities Index after New York City, London, Tokyo and Paris. The city has one of the highest per capita incomes in the world, and the most severe income inequality among the advanced economies. It has a high Human Development Index and is ranked highly in the Global Competitiveness Report. Hong Kong is the third most important financial centre after New York and London. The service economy, characterised by low taxation and free trade, has been regarded as one of the world's most laissez-faire economic policies, and the currency, the Hong Kong dollar, is the 13th most traded currency in the world. (Full article...)

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Karl Marx (/mɑrks/; German pronunciation: [ˈkaɐ̯l ˈmaɐ̯ks]; 5 May 1818 – 14 March 1883) was a German philosopher, economist, sociologist, journalist, and revolutionary socialist. Marx's work in economics laid the basis for much of the current understanding of labour and its relation to capital, and subsequent economic thought. He published numerous books during his lifetime, the most notable being The Communist Manifesto (1848) and Das Kapital (1867–1894).

Born into a wealthy middle-class family in Trier in the Prussian Rhineland, Marx studied at the Universities of Bonn and Berlin where he became interested in the philosophical ideas of the Young Hegelians. After his studies he wrote for Rheinische Zeitung, a radical newspaper in Cologne, and began to work out the theory of the materialist conception of history. He moved to Paris in 1843, where he began writing for other radical newspapers and met Friedrich Engels, who would become his lifelong friend and collaborator.

Marx's theories about society, economics and politics—the collective understanding of which is known as Marxism—hold that human societies progress through class struggle: a conflict between an ownership class that controls production and a dispossessed labouring class that provides the labour for production. States, Marx believed, were run on behalf of the ruling class and in their interest while representing it as the common interest of all; and he predicted that, like previous socioeconomic systems, capitalism produced internal tensions which would lead to its self-destruction and replacement by a new system: socialism. He argued that class antagonisms under capitalism between the bourgeoisie and proletariat would eventuate in the working class' conquest of political power and eventually establish a classless society, communism, a society governed by a free association of producers. Marx actively fought for its implementation, arguing that the working class should carry out organized revolutionary action to topple capitalism and bring about socio-economic change. (Full article...)

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What are the alternatives to getting healthier and safer products produced and consumed under capitalism? We have seen that bans don't generally work.

The first alternative is suggested by the cigarette example, where putting higher taxes on cigarettes reduced their sales. We could put higher taxes on items that are harmful to health or safety. Such taxes would most likely be passed on to consumers. But they would accomplish the goal of reducing consumption of these items.

The second alternative is to apply a "nudging" strategy, which involves loading the choices in a way likely to lead customers to buy the healthier alternatives. Some studies show that high school students will end up eating healthier food if the healthier food items are put near the front of the cafeteria line. Students are usually hungry after classes and grab what they see first. Extending this idea further, we can imagine supermarkets such as Whole Foods giving better shelf positions to the healthier brands within each category. So, healthier cereals would be at eye level and cereals loaded with fat and sugar would be on the lower shelves.

A third alternative is to use "social marketing tools" to persuade people to make healthier choices. The 4Ps (product,price,place, and promotion) could be applied to convince people about healthier and smarter choices. Advocates of better eating would describe the benefits of eating the right foods and the bad effects of eating unhealthy foods. Mayor Michael Bloomberg of New York City was the kind of civic leader who "counter-marketed" by trying to get supermarkets not to carry 16-ounce of larger sizes of sweetened drinks and ordering cigarettes to be put out of the sight of consumers.

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— Philip Kotler (1931)
Confronting Capitalism , 2015

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General images

The following are images from various capitalism-related articles on Wikipedia.

Image 1Sir Josiah Child, an influential proponent of mercantilism. Painting attributed to John Riley. (from History of capitalism)
Image 2The gold standard formed the financial basis of the international economy from 1870 to 1914. (from Capitalism)
Image 3The Watt steam engine, fuelled primarily by coal, propelled the Industrial Revolution in Britain. (from Capitalism)
Image 4The economic model of supply and demand states that the price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D): the diagram shows a positive shift in demand from D₁ to D₂, resulting in an increase in price (P) and quantity sold (Q) of the product. (from Capitalism)
Image 5The New York stock exchange traders' floor (1963) (from History of capitalism)
Image 619th-century Great Britain become the first global economic superpower, because of superior manufacturing technology and improved global communications such as steamships and railroads. (from History of capitalism)
Image 7Robert Clive with the Nawabs of Bengal after the Battle of Plassey which began the British rule in Bengal (from Capitalism)
Image 8Map of a medieval manor. Notice the large commons area and the division of land into small strips. The mustard-colored areas are part of the demesne, the hatched areas part of the glebe.
William R. Shepherd, Historical Atlas, 01923 (from History of capitalism)
Image 9Augsburg, the centre of early capitalism (from Capitalism)
Image 10The Spinning mule, built by the inventor Samuel Crompton. (from History of capitalism)
Image 11The Rothschild family revolutionised international finance. The Frankfurt terminus of the Taunus Railway was financed by the Rothschilds and opened in 1840 as one of Germany's first railways. (from History of capitalism)
Image 12The New York Stock Exchange. (from History of capitalism)
Image 13Decaying hedges mark the lines of the straight field boundaries created by an inclosure act. (from History of capitalism)
Image 14The New York stock exchange traders' floor (1963) (from Capitalism)
Image 15Adam Smith (from Capitalism)
Image 16The subscription room at Lloyd's of London in the early 19th century (from Capitalism)
Image 17An industrial worker among heavy steel machine parts (Kinex Bearings, Bytča, Slovakia, c. 1995–2000) (from Capitalism)
Image 18A painting of a French seaport from 1638 at the height of mercantilism (from Capitalism)
Image 19The city of Genoa, one of the birthplaces of capitalism. (from History of capitalism)
Image 20The gold standard formed the financial basis of the international economy from 1870 to 1914. (from History of capitalism)
Image 21British East India Company 1801 (from History of capitalism)
Image 22The Industrial Workers of the World poster "Pyramid of Capitalist System" (1911) (from Capitalism)
Image 23Gustave Doré's 19th-century engraving depicted the dirty, overcrowded slums where the industrial workers of London lived. (from History of capitalism)
Image 24The Anglo-Dutch Wars were fought between the English and the Dutch for control over the seas and trade routes. (from History of capitalism)
Image 25Cosimo de' Medici (pictured in a 16th-century portrait by Pontormo) built an international financial empire and was one of the first Medici bankers. (from Capitalism)

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Did you know

... that rational egoism is the idea that it is always in accordance with reason to pursue one's own interest, used by Ayn Rand as the rationale behind objectivism?
... that in the 16th century people convicted of sedition had their ears nailed to the pillory in Norwich Market, and when their pillory time was completed their ears were cut off?
... that the economy of Tolkien's Middle-earth has been described as a mix of feudalism and capitalism, with one scholar even suggesting it had communist elements?