Capitalist Market

Examples of Capitalist Market in the following topics:

• State-Centered Theories

  • The laissez-faire era of United States economic history, which occurred around the turn of the 20th century—when the government generally left the economy unregulated—reflects a belief in market-driven theories of inequality.
  • Laissez-faire policy led to corporate monopolies and a vast gap between the wealth of capitalist business owners and wage laborers.
  • In contrast to market-oriented theories of inequality, state-centered theories do not assert that the capitalist free-market will naturally regulate prices and wages.
  • State-centered theories of inequality critique market-driven ones on the basis that capitalists embroiled in the free-market will act to increase their own wealth, exploiting the lower classes.

• Market-Oriented Theories

  • Market-oriented theories of inequality are focused on the laws of the free market.
  • The free market refers to a capitalist economic order in which prices are set based on competition.
  • In a free market, prices are supposed to be regulated by the law of supply and demand.
  • The model is commonly applied to wages, in the market for labor.
  • Considering inequality, market-oriented theories claim that if left to the free-market, all products and services will reach equilibrium, and price stability will reduce inequality.

• Capitalism

  • Capitalism is a system that includes private ownership of the means of production, creation of goods for profit, competitive markets, etc.
  • An example of the state's involvement in capitalist economies is the development of minimum wage laws.
  • Economists usually focus on the degree that government does not have control over markets (laissez-faire economics), and on property rights.
  • The differing extents to which different markets are free, as well as the rules defining private property, are a matter of politics and policy, and many states have what are termed mixed economies.
  • The relationship between the state, its formal mechanisms, and capitalist societies has been debated in many fields of social and political theory, with active discussion since the 19th century.

• The Economy

  • The United States is an example of a capitalist economy.
  • A market is a central space of exchange through which people are able to buy and sell goods and services.
  • In a capitalist economy, the prices of goods and services is mainly controlled through the principles of supply and demand and competition.
  • The market coordinates itself through pricing until a new equilibrium price and quantity is reached.
  • Though the market is encouraged to act on its own, in any capitalist economy, the government is intimately involved in regulating the economy.

• Capitalism

  • The origins of modern markets can be traced back to the Roman Empire and the Islamic Golden Age and Muslim Agricultural Revolution where the first market economy and earliest forms of merchant capitalism took root between the 8th–12th centuries.
  • As labourers, individuals may decide which jobs to prepare for and in which markets to look for work.
  • Competition is important in capitalist economies because it leads to innovation and more reasonable prices as firms that charge lower prices or improve the quality of their product can take buyers away from competitors (i.e., increase market share.
  • A monopoly occurs when a firm supplies the total output in the market.
  • This results in a market equilibrium, with a given quantity (Q) sold of the product.

• Work and Alienation

  • Alienation in capitalist societies occurs because the worker can only express this fundamentally social aspect of individuality through a production system that is not collectively owned, but privately owned.
  • The product's design and the manner in which it is produced are determined not by its actual producers, nor even by those who consume products, but rather by the capitalist class.
  • This capitalist class appropriates labor, including that of designers and engineers, and seeks to shape the tastes of consumers in order to maximize profit.
  • The fourth is the alienation of the worker from other workers, in which the capitalist system reduces the act of work to a simple economic practice, rather than recognizing the social elements of the act of production.
  • A capitalist system sees the labor of the worker to a commercial commodity that can be traded in the competitive labor-market.

• World-Systems Theory

  • India is an example of a semi-peripheral country -- it is largely dependent on foreign investors for capital, but has a growing technology industry and emerging middle class consumer market.
  • Cape Verde is a peripheral country -- foreign investors allow for the extraction of raw materials and the production of cash crops, but all are for export to wealthier consumer markets.
  • The theory originated with sociologist Immanuel Wallerstein, who suggests that the way a country is integrated into the capitalist world system determines how economic development takes place in that country.
  • Core countries (e.g., U.S., Japan, Germany) are dominant, capitalist countries characterized by high levels of industrialization and urbanization.
  • The wealthy in peripheral countries benefit from the labor of poor workers and from their own economic relations with core country capitalists.

• Socialism

  • Social ownership contrasts with capitalist ownership, in which the means of production are used to create a profit.
  • By contrast, in market socialism, the means of production may be publicly or cooperatively owned, but they operate in a market economy.
  • That is, market socialism uses the market and monetary prices to allocate and account for the means of production and the products they create.
  • A capitalist society, they argue, does not utilize available technology and resources to their maximum potential in the interests of the public.
  • Instead, it focuses on satisfying market-induced wants as opposed to human needs.

• Industrial Conflict

  • This book analyzed capitalist productive relations from a Marxist perspective.
  • Following Marx, Braverman argued that work within capitalist organizations was exploitative and alienating, and therefore workers had to be coerced into servitude.
  • For Braverman, the pursuit of capitalist interests over time ultimately leads to the deskilling and routinization of the worker.
  • Braverman argued that capitalist owners and managers were incessantly driven to deskill the labor force to lower production costs and ensure higher productivity.
  • The lack of capitalist reliance on human skill reduces the need of employers to reward workers in anything but a minimal economic way.

• Alienation

  • Marx argues that in emerging systems of capitalist industrial production, workers inevitably lose control of their lives and their selves by not having any control of their work.
  • Marx's criticisms were directed at capitalist structures, not urban areas specifically.
  • However, capitalist economies do tend to encourage individuals to congregate in urban areas when seeking out industrialized work.
  • Countries' populations tend to trend more urban the more capitalist the country's economy.
  • When there is more stress on limited available resources, one pays more attention to how those resources are distributed, such as by the free market means of capitalism.