Capitalism and the EconomyCapitalism and the Economy
An economic system in which1.Property and goods are privately owned.2.Investments are determined by private decisions.3.Prices, production and distribution of goods aredetermined primarily by competition in an unfetteredmarketplace.
Workers are more productive than ever, yet jobinsecurity is high. As a result, many people are workingmany people are workinglonger hourslonger hours, especially people at higherincome levels, in order to prove loyalty orachieve marginal benefits.
Adam Smith was an economist who believedthat:◦ Competition helps maintain a cohesive society.◦ Specialization increases productivity and innovation.◦ Using money, rather than barter, makes trading moreefficient.
Karl Marx◦ stated that capitalism created alienation inworkers—including alienation from the products theyproduced, from the production process, from otherworkers, and from themselves and their creativetendencies◦ predicted both that capitalism would ultimatelydestroy itself and that the working class would riseagainst the capitalist class, leading to a period first ofsocialism and then of communism
Max Weber◦ linked the rise of capitalism to technology,ideas, and beliefs, as well as the ProtestantReformation◦ expressed concerns about capitalism because hethought people became obsessed with workingand making money that they could neverenjoy
In society today, people actually earn less money(relative to the cost of living) compared to the early1900s. This is because:◦ Only men were “supposed to” work.◦ Men were paid enough to provide for the wholefamily.◦ Unfortunately, the higher wage was at the cost ofwomen’s freedom and autonomy.
Compared to other industrialized countries and somedeveloping countries, Americans work longer hours andhave fewer vacation benefits and less generous familyleave policies. Even when generous benefits are available, workersoften do not take advantage of them, which suggeststhat work is central in the lives of Americans.work is central in the lives of Americans.
Globalization refers to the processes thatcreate and intensify worldwide socialexchanges and interdependencies.◦ creates an increase in trade and economicexchanges◦ magnifies the division between the world’s rich andpoor