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Capitalism Important Terms
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- 1Capitalmoney, assets, resources, wealth (anything to create wealth)
- 2Capitalistanyone who invests in a business
- 3Economicsthe study of the production, distribution & consumption of wealth & resources
- 4Free Market Economytype of economy based on private ownership
people can own & invest as they wish - 5Command Economytype of economy that is controlled by governments that own or control the means of production
- 6Adam Smithcredited for designing modern capitalist theory
published his book "The Wealth of Narions" - 7Laissez-fairetype of capitalist economy means the government is "hands off"
government shouldn't be involved in economy, protection of private property rights, ensure competition by breaking up monopolies (large businesses), low taxes for essentials (military) - 8Supply & Demandbalance between the supply of goods & consumer demand for those goods
a basic foundation of capitalism - 9Invisible Handa principle that governs the capitalist system
no government regulation, supply & demand, competition between businesses - 10Industrial Revolutioncapitalism led to a leap of economic progress
- 11Problems Created by Industrial Revolutionlow wages, unsafe working & living conditions, child labour,
- 12Karl Marxwrote the "Communist Manifesto" as a response to the problems of capitalism
- 13COmmunismMarx's solution to replace the capitalist system
- 14Factory ActsMarx's ideas led to the creation of the Factory Acts in 1833 in England
- 15Unionsworkers in the US banded together in unions to protest against powerful factory owners
- 16MonopoliesIn the US, huge finacial empires were forming which were harmful to the capitalist system
- 17BOom & Bustcycles of the capitalist system, where the system goes through periods of high & low economic development
- 18Depressionan economic downturn in a capitalist system, where demand for goods, services & labour decreases
- 19Great Depressionthe biggest economic downturn in modern capitalism (1929-1939)
- 20Stock Market Crashthis stock market crash in 1929 triggered the Great Depression
- 21New Dealduring the 1930's, the New Deal was US president Franklin Roosevelt's plan to turn the US economy around during the Great Depression
- 22John Maynard Keynesa British economist that invented a system of measuring economies on a large scale called macroeconomics
- 23Government's Role During Recessionresponsbile for controlling the supply of money & using resources to spend money during a time of recession
- 24Role of Government in Economy (Adam Smith)government restrictions inhibit economic growth
government has limited role to allow businesses to operate - 25Principles of Capitalismself-relaince, private property, profit motive, price system, competition, inequality
- 26Self-Reliancework hard & depend on yourself to be successful
- 27Private Propertyability to own property
real esate, labour, capital ($), intellectual - 28Profit Motivegoing to work to make money
in order to own property, must have money to pay for it - 29Price Systemprices increase when there is a higher demand for product
- 30Competitionessential because makes invisible hand work
businesses must compete for lower prices - 31Inequalitysome people are wealthy & some people are poor
different classes separated by wealth - 32Economic QuestionsWhat to produce?
How to produce it?
Who gets it? (how to distribute it?) - 33What to produce? (Capitalism)Consumer Demand
what are people willing to pay for a product? - 34How to Produce it? (Capitalism)Suppliers Goals
how much of a profit can producer make on a product? - 35Who Gets it/How to Distribute it? (Capitalism)Who can Afford the Product?
what wages are consumers earning?, which in turn will decide how many goods & services consumers recieve - 36Pros of Capitalismbusinesses produce what consumers want (economic growth), self-reliance, use resources in way that maximizes profits, allows for success & gaining wealth
- 37Cons of Capitalismwaste of resources, pollution, poverty, inequality, corruption, mistreatment of workers, unstable
- 38Thomas Malthus - Essay on Population (Extreme capitalism)stop supporting people who can't support themselves - population control
people who can survive will be successful - 39David Riccardo - Iron Law of Wages (Extreme capitalism)less-skilled workers shouldn't be getting paid higher wages
no minimum wage - people should be paid based on skills - 40Social Darwinismonly the strongest & most successful individuals will survive
- 41Cons to Laissez-faireinequality - lower classes & people without advantages don't benefit, only the wealthy benefit
- 42Stability of Market Economymarket economies are very unstable
boom & bust
higher demand & prices leads to decrease in demand so price decreases - 43Socialismdeveloped to combat the injustices of capitalism (not everyone benefits from capitalism)
cooperation VS competition - 44Utopiaa perfect society
- 45Robert Owenbelieved happy employees worked more efficiently - business prospers
- 46Opposition to Unionscapitalists oppose unions b/c they:
takes away business owners power & shares power with workers
decrease owners profits - 47Democratic Socialist Statecooperative government, businesses & workforce
EX. Sweden
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- Grade 11 (Unit 1) Social Studies Fichas sobre Capitalism Important Terms, creado por Emily Elder el 25/01/2019.
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- Emily Elder
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