Capitalism

Definition

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. It is characterized by the accumulation of capital, competitive markets, and wage labor.

5 Must Know Facts For Your Next Test

1. Capitalism emphasizes the role of private property, capital accumulation, and the creation of goods or services for profit in an open and largely unregulated market.
2. The pursuit of economic self-interest and the accumulation of capital are central to the capitalist system, which is often contrasted with socialist or communist economic models.
3. Feminist theorists have criticized capitalism for perpetuating gender-based inequalities and the exploitation of women's unpaid labor in the domestic sphere.
4. Enlightenment thinkers, such as Adam Smith, laid the philosophical foundations for capitalist economic theory, emphasizing the role of the free market and the 'invisible hand' in regulating the economy.
5. Marxist theory views capitalism as a system of exploitation, where the bourgeoisie profit from the labor of the proletariat, leading to class conflict and the eventual overthrow of the capitalist system.

Review Questions

• Explain how the concept of capitalism relates to the feminist theories of ethics discussed in 9.6.
  • Feminist theorists have criticized capitalism for perpetuating gender-based inequalities and the exploitation of women's unpaid labor in the domestic sphere. They argue that the capitalist system, with its emphasis on the pursuit of economic self-interest and the accumulation of capital, often fails to recognize and value the essential contributions of women, particularly in the realm of caregiving and household labor. Feminist theories of ethics challenge the patriarchal underpinnings of capitalism and call for a more equitable and inclusive economic system that acknowledges the diverse experiences and needs of all individuals, regardless of gender.
• Describe how the Enlightenment social theory discussed in 12.1 influenced the development of capitalist economic thought.
  • The Enlightenment thinkers, such as Adam Smith, laid the philosophical foundations for capitalist economic theory. They emphasized the role of the free market and the 'invisible hand' in regulating the economy, promoting the idea that individuals pursuing their own self-interest would lead to the most efficient allocation of resources and the greatest societal benefit. This perspective, which prioritized individual liberty, private property, and the minimization of government intervention, became central to the capitalist worldview and shaped the development of modern economic systems.
• Analyze how the Marxist solution proposed in 12.2 challenges the capitalist system and its underlying assumptions.
  • Marxist theory views capitalism as a system of exploitation, where the bourgeoisie (the owners of the means of production) profit from the labor of the proletariat (the working class). This class conflict is seen as inherent to the capitalist system, leading to the eventual overthrow of the capitalist system and the establishment of a socialist or communist society. Marxists argue that the pursuit of economic self-interest and the accumulation of capital under capitalism inevitably lead to the exploitation and oppression of the working class, and they propose a radical restructuring of the economic and social order to create a more equitable and just society.

Related terms

Free Market: An economic system where prices, production, and the distribution of goods and services are determined mainly by competition in a largely unregulated market rather than by central planning or government regulation.

Bourgeoisie:

The social class that owns the means of production and employs wage labor in capitalist societies.

Proletariat:

The social class that does not own the means of production and sells its labor to the bourgeoisie in return for wages in capitalist societies.