Capitalism Is Not Dead Essay

1621 words - 6 pages

This essay shall illustrate the point that capitalism is not dead. Capitalism, indeed, has brought on successes, including market failures. A capitalist economy is an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. Centrally planned economies do not bring in decisions of firms and household, thus ignoring what many buyers demand and sellers want to sell. A centrally planned economy does not promote the efficiency of an economy, but tries to address the issue of equity. However, Adam Smith made an important observation which was illustrated in his book— An Inquiry into the Nature and Causes of Wealth of Nations. This observation is that “households and firms that interact in market economies act as if they are guided by an "invisible hand" that leads the market to allocate resources efficiently.” The prices agreed upon by buyers and sellers leads to a more favorable outcome which is an increase in the well-being of a society (Mankiw 83-85).
Markets are usually a good way to organize economic activity, however, market failure may result if the market does not allocate resources efficiently, thus, leading to government intervention. The government enforces rules to help prevent market failure. A major impact the government plays in a market economy is enforcing property rights so an individual can own and control scarce resources. The government provides police and courts to enforce people’s rights on goods and services produced or owned by an individual. Market failure may be caused by an externality, which is the impact of one person or firm’s actions on the well-being of a bystander, or market power, which is the ability of a single person or firm to unduly influence market prices. When this occurs the government may intervene to promote both efficiency and equity. Market failure is inevitable in every economic system because economies fluctuate and growth rate will rise and fall overtime. In addition, private decisions can help prevent externalities by using the Coarse Theorem; merging companies so as to consider the uncompensated cost/benefit, or by basic moral sanctions. A capitalist system encourages competition, thereby leaving little room for companies with market power. The only essence of the government is to enforce necessary human rights. In summation, the invisible hand (capitalism) increases the market pie while the government tries to share it evenly.
The successes brought about by low taxation and minimal government intervention are evident. Taxes raise revenue for the governement but makes buyers and sellers worse off. The deadweight loss (D + E, from the figure below) exceeds the revenue raised by the government. Incentives motivate people to act. In this case, the tax levied gives an incentive to buyers to consume less (because of the higher prices), and sellers to produce less (because of the lower prices). The size of the...

Find Another Essay On Capitalism is not dead

Laissez- Faire Capitalism vs. Modified Market Capitalism Which has Biblical support?

632 words - 3 pages , however, a definition of capitalism itself would be helpful. Capitalism is defined as being an economic system based on private ownership of capital. With this definition it is easier to proceed to the definitions of Laissez-Faire and Modified Market capitalism.Laissez-Faire is defined as being an economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate

The Corporation Essay

1462 words - 6 pages demonstrates that capitalism in particular profit motive, inequalities, and exploitations are useful to analyze not only the film Capitalism: A Love Story, but also business corporations in today's society. Corporations comprises of each of the components that is described, where profit motive is one of the main reasons for competition against corporations, because everyone wants to earn profit; Inequalities among corporations, where the top 1


970 words - 4 pages capitalistic society, where the proletariat and the bourgeoisie alike, will not be driven by religious motivation, but instead by a constant struggle to benefit from the system. He reasons that this future of the capitalist society is a direct consequence of the teachings of Calvinism.The Calvinist work ethic of 'living to work' forms the core of modern capitalism. This ethic originated from the Calvinist doctrine of predestination and the notion of a

Analysis of Max Weber's Theory of Capitalism

949 words - 4 pages prove a statistical and specific point as to the origin of capitalism, it’s a generalization he refers to. ‘The Protestant Ethic and the Spirit of Capitalism’ must be taken as a whole work, additions and explanations of this work given at a later date by Weber must also be included. Weber’s work is theoretical. It is based on one man’s view of the evidence, and must be taken as a whole, and as a theory. Whether or not the Protestant ideal was


1141 words - 5 pages capitalism developed in another unique direction called mercantilism. The mercantilist system focused on the interests of the state rather than self-interest. The key idea of mercantilism is a surplus of exports over imports. This idea was the product of the state's preoccupation with accumulating national wealth. Mercantilism eliminated much of the self-interest needed for capitalism. Therefore mercantilism did not survive when capitalism evolved to

Marxism Isn't Dead

3738 words - 15 pages by the working class, joined to democratic planning not by bureaucrats but "by the associated producers." (4) So Marx's own vision of socialism was not proved a failure by the demise of the USSR because it was not tested. Since Marxists are "unable to point to a social class or a movement" embodying change away from capitalism, Ronald Aronson, still a Marxist, concludes Marxism is "over" at least "as a project of historical transformation

Karl Marx and Capitalism

965 words - 4 pages scientific understanding of the history of capitalism. Through Marx’s critique, the history of society is revealed. Capitalism is not just an economic system in Marx’s analysis. It’s a “specific social form of labor” that is strongly related to society. Marx’s critique of capitalism provides us a deep understanding of the system to predict its pattern and protect ourselves from its negative sides. Capitalism dominates the world today. Known as a

Culture and Capitalism

1793 words - 8 pages Capitalism is responsible for the economic organization across the globe, as it in influenced mainly by culture. It affects the identity, sense of place, and the connection between how (b)orders distinguish the place of belonging. Culture gives meaning and values to particular goods. Capitalism uses monetary currencies to represent the exchange value of products, as profit is the main goal for corporations. Culture and capitalism both give

The Influence of the Communist Manifesto on the Development of Industrial Capitalism

1468 words - 6 pages sentence: Abolition of private property.” The absolute destruction of property rights, however, was not Marx’s intention. He did not seek to deprive the artist or the peddler of his property; there is no need to abolish that because the development of industry has to a great extent already destroyed it, and is still destroying it daily. Marx contended that capitalism involves production that is not only personal, but also collective in

The Connection between Slavery, Growth of Capitalism, and Colonization

1331 words - 6 pages economics of slavery was the idea of the racial superiority of non-black people (Robinson, 1984: 61). The underlying principle for the development of capitalism was slavery and it was thus not coincidental (Robinson, 1984: 47). Furthermore, the relationship between slave labour and the growth of capitalism resulted in the colonial conquest of Africa by Europe. South Africa is a geological area that was drastically transformed by the arrival and

The American Jungle

1081 words - 5 pages and dreams become crushed are intended to illustrate how capitalism fails the working class. Jurgis begins to experience hardships in Packingtown when he marries Ona. Traditionally, Lithuanian guests leave money at weddings to help cover expenses, but this did not happen for Jurgis therefore leaving him and Ona in debt. This is an indication that capitalism causes people to move away from traditional values and creates a community of people

Similar Essays

Ding Dong, Communism Is Dead! Or Is It?: How Marxism, As A Criticism Of Capitalism, Is Still Relevant In The Twenty First Century

2044 words - 9 pages Stalinism. Stalin’s insistence on the centrality of internationalism through the Comintern, does not reflect Marx’s concept of socialism which is the self-emancipation of the working class in one country. Therefore, the end of Marxism was not realized through the collapse of the Soviet Union, but instead it signified the end to Stalinism. The modern society, however, is still deprived of a clear solution to the problems created by capitalism

Analysis Of Dambisa Moyo´S Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa

759 words - 4 pages Dambisa Moyo, originally from Zambia, is an economist and author of the controversial book: Dead Aid: Why Aid is Not Working and How There is a Better Way For Africa. This very controversial book explores foreign aid and how it has harmed Africa, and in turn she offers ‘solutions’ to how Africa can thrive without foreign aid. Moyo offers four sustainable sources of funding which will allow Africa to flourish: free trade in agricultural goods

Wm. Shakespeare's "Macbeth" Essay Title "All That Bleeds Is Not Dead"

757 words - 3 pages Write a paper in which you clearly discuss the contribution of one of the motifs in Macbeth. Your essay must demonstrate how a particular motif contributes to the general theme of the play - the destructtive effects of unchecked ambition. Remember, this is an anylitical essay. Retelling the story does not constitute an anylisis. Please do not consult any secondary sources for this assignment.Red blood cells are the most important cells in the

This Essay Is About The Upsides And Downsides Of Capitalism And Why It Isn't The Utopian Government That Many People Believe It To Be

1793 words - 7 pages corrupts a capitalist society. Capitalism creates a system where profit is the ultimate means to an end and the process does not matter. Despite this fact there are many supporters of Capitalism and some strong arguments and examples of Capitalism being very successful. Yet because of the corruption capitalism instills in its people capitalist societies tend to do things that are abhorrent, unethical and wasteful. Capitalism is not the 'utopian