capitalism and how it is suppost to produce the best possible outcome for society?

Question

who is capitalism that important i dont understand

i dont mean who i mean why*

Answer 1

That’s the theory. Capitalism is supposed to bring in the best society naturally through supply and demand. In communism someone has to arbitrarily set quotas and prices, based on some individual or worse, committee notions. This tends to lead to shortages. E.G. You priced new cars at $500 so everyone wants one because they are cheap. So who gets one? Who gets one is also arbitrary; it could be those willing to wait the longest in line for one, or society’s elite.

Capitalism says if people are willing to buy something at a certain price and people are willing to sell something at a certain price, things are more natural and efficient. If prices go up, more people may be willing to sell, and less people willing to buy. If prices go down, less people sell and more people buy. Thus you end up at an equilibrium point with the price, supply and demand that is most beneficial to society. If conditions change, the price, supply and demand change naturally too. IN THEORY!

Consider Oil. If the price of gas is too high, you have the option to drive less, or sell your gas guzzler SUV and buy a sensible car. Your intent is you buy less gas. If you are willing to pay the price, you do. With the price of gas high, we in Canada are booming. On one side, increased technology has reduced the cost of us extracting oil. As well, the increased sales price means we operate at a profit and Canadian oil production is booming. That is supply that wasn’t there at a lower price as we are willing to sell (profitably) at this price.

Perfect? Far from it. The first assumption is people are willing and able to compete, and not monopolies. What you have in oil industry are a few companies that are able to control the US market. A new competitor can’t get in on the action as the existing companies have a lot of money to run them out of business. Thus they limit the supply and artificially inflate the price. The model also assumes everyone has perfect access to information. What if the media keeps telling you that we are going to run out of oil? What if the media prefers doom and gloom stories and reports to you every time the price goes up 5 Cents and says expect more of the same, while for the reverse they report only when the price goes down 25 cents and tells you it is a refreshing short term break. What if every war and every hurricane is used as an excuse to raise the price. But did they tell you better technology increased Canada’s supply of oil? Then, people’s expectation is skewed and they are lead to believe the price of oil is higher than it should be. If your information is controlled they can sell you at the wrong price.

Answer 2

Because it's also called Free Enterprize where the customer is king. The market place decides what is for sale and how much is available. Just think about the local grocery store.

They don't know when you are going to be there or what you are going to buy when you arrive. Yet some how they almost always have what you want. How do they do that. There is no government department of produce to make sure they order the correct amount. This is an how a free market works. And why it is so important. It is the most efficient system ever devised to deliver goods and services. The best part it wasn't devised it evolved from market forces. The entire system is too complicated to be centrally controlled.

Answer 3

Ok so capitalism lets get the definition:

An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

Ok what this all mean? Well we have to go back to the age of discovery where England founded Jamestown. Well the company that suported Jamestown was the Virginia Company (named after The Virgin queen). This was a joint stock company where many investors put in money {share} in hopes of making a profit. Ussualy the person with the most stocks controls the company this is called capitalism. The more the marier!!

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Answer 4

Capitalism is the most natural social system. It goes with nature, survival of the fittest etc.. It produces the best possible outcome for society because it promotes competition and when we compete that's when we get the best results in everything, science, new drugs for diseases, better technology etc.. sure it has its downfalls, but what doesn't. There isn't any perfect social system and life is not fair so why should anything else be perfect? Anyone who tells you that capitalism is bad is an ignorant idealist who lives in fantasy land.

Answer 5

Capitalism is an economic system. That means it has to do with how goods and services are distributed. Communism is another economic system, here is a brief comparison:

Capitalism - you work hard because then you get more money and you can buy yourself more stuff

Communism - everyone is given an equal share of stuff

Capitalism is where you buy and sell goods and services for money. That means, that in order to survive, you need to be producing goods or services that other people value. So if you want to have a lot of money, then you need to provide more quantity and/or quality goods/services to get more money. The fact that you need money to buy goods/services motivates you to be productive.

Communism is another economic system. In communism, everybody gets a fair share of what everybody produces. An example would be that everyone would get an equal car, for free. In this system, there is nothing motivating people to work as hard as they can, because everyone gets the same car anyway.

Answer 6

Trust me, capitilism is bad. It means that the whole economy and mentality of society revolves around money and material things. Big corporations like Microsoft etc rely on capitalism and while it might be good for rich people, it tends to increase the gap between the rich and the poor, and is incredibly bad for the environment because people don't want to spend extra money on making their factories or whatever more efficent, it is easier to make money if things are quick and dirty.

Capatilism creates corportations, which is a company that is owned by many many people, that's what the share market is all about.

The main reason captialism is bad is because it is really selfish and the whole mentality behind it is MORE MORE MORE MORE!!!!

Answer 7

In capitalism you get a chance to build it - own it - profit from it, IT being a farm, store, baby sitting business whatever. Your profits go to you and the bigger and better you can grow that IT the more cash you have - the better your life style. But as you grow you are also employing other people which betters their life style. So it is a win win situation.

Answer 8

Capitalism = Everybody gets a chance.

Communism/Socialism = Nobody gets a chance.

Answer 9

Capitalism is important because people like owning stuff.