Capitalism Essay

733 Words Jun 29th, 2015 3 Pages
Capitalism, as defined by Austere is a social, political, and economic system that succeeded feudalism based upon recognition of the rights of private parties to choose how to employ their labor and capital in markets as indicated by market prices instead of tradition.(Austere 1966) Price is the main co-ordinating method rather than the command and control mechanisms and upholds the fact that,capitalists systems are differentiated among each other depending on the level and nature of governmental effectiveness and participation in their market.
Capitalism is more of an indirect governance system,whereby private players in the business field are motivated to own and use property for individual gain subject to the laws and regulations that
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Capitalism opposes the old economic systems that were characterised by forced labor, relationships based on tribalism, nepotism or any other locally known relationships .Again, capitalism contradicts recent economic systems whereby, the governments have acted more directly in the use of resources ,through ownership and central control.
Capitalist systems basically depends on the state to make certain provision of public goods and services, including roads, learning institutions and law enforcement, futhemore to stay away from the temptation to posses, run, or directly manage the economic players. Incase the state does become a direct economic player, for instance as the owner of big enterprises, it becomes a teacher as well as a student. This leads to conflict of interest,for instance, as a regulator and as player that need not be subject to the regulations of the markets. There emerges times when states may need to play both roles, for example in a situation of national tragedy or monopoly, but it is fair if these incursions are for reasons of state, e.g. national calamity. If direct interventions are rampant , they invite corruption and the destruction of market for the benefit of the mnority at the expense of the

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