Capitalistic Approach To Capitalism Essay

1317 Words 6 Pages
The capitalistic approach to economy has created a complex system of wealth distribution that functions in cycles leaving certain groups successful and other groups impoverished. Capitalism functions as a system with the end goal of creating profit. Two sides of capitalism, production and financialization, have a complicated relationship that creates and destroys global world powers. The cyclic nature of civilizations, from productive capital to financial capital, and eventually to demise, has lead to a frantic search for new strategies of opportunity to prevent economic decline. This capitalistic approach to the market economy inevitably leads to economic inequality, typically represented through race. Furthermore, during periods of crises, such as the Panic of 1819 and the Great Depression of the 1930s, attempts at financialization further structuralize racism into society. According to Silver and Arrighi, productive capital, or material expansion, is defined as “A period in which capital flowed predominantly into trade and production rather than financial intermediation and speculation” (Silver, 2011, p. 54). The significance of productive capital is in …show more content…
57-59). The key components of modern financial capital is spelled out in the acronym F.I.R.E. which stands for Finance, Insurance, and Real Estate. Investors in this field follow Marx’s "General Formula for Capitalism” M-C-M’, or money to commodity to increased money, in terms of real estate, or directly M-M’, money to increased money, in terms of finance or insurance (Marx, 1867, p. 251-252). The idea here is that the capitalist spends money with the goal of creating more money. Businessmen typically shifted their focus from material expansion to financialization due to an over-saturation of the commercial market, which created a need for more liquid forms of

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