Concept in Definition ABC

Capitalism is the name by which the economic regime that is based on the predominance of capital is called, as a fundamental element of production and responsible for the creation of wealth, and in which the state barely have participation. In capitalism, the production of capital in the form of money or wealth is the main objective.

Private property is the owner of the means of production. Little state participation

In capitalism the means of production and distribution are privately owned and have a concrete profit, meanwhile, the decision of supply, demand, prices, distribution and the investments They are not defined by the government of the day but it is the market itself that makes that definition.

Profits are only of the owners of the means of production

The profits, on the other hand, are distributed among the owners of the means of production and part of them are invested in the company and in the payment of wages to the workers. Of course, the workers do not have any interference in the profits that are obtained, this being one of the great flags that historically raised the

communism in their face-to-face fight against capitalism.

We must say that since the 18th century, capitalism has imposed itself as a socio-economic regime in the entire world.

The actors involved in its operation according to

The functioning of capitalism demands the presence of several actors in order to function accordingly, including we must point out to the social and technological media that are essential to guarantee consumption and treasure capital; the employer or owner of the means of production; the employees who in exchange for a salary sell their work to the owners; and consumers, who are those who consume what is produced to satisfy desires or needs. This oiled mechanism is what allows the maintenance of this system and the continuation of the production of wealth.

Social inequality, one of the main criticisms against capitalism

Now, we must say that just as it has many followers, capitalism has many detractors, especially because they argue that capitalism is the system of economic laws that governs the world today and is based on the existence of certain elements that allow access to significant gains for a part of the population, but which add to deep levels of poverty for most of the population. her.

Origin and history

The birth or initial development of capitalism can be located historically at the moment in which the feudal states began to fall and European cities (mainly Italian) began to stimulate the use of trade as principal economic activity (from the 15th and 16th centuries).

This situation allowed the emergence of a new social group, the bourgeoisie (or those who lived in the boroughs or cities), who began to base their power on their own work and on the margins of profits that it left him, instead of in divine or ancestrally established rights as used to be the case with the nobility or the royalty. Historians and economists divide the history of capitalism into three great periods or stages: that of capitalism. mercantile (15th to 18th centuries), that of industrial capitalism (18th and 19th centuries) and that of financial capitalism (20th and 18th centuries). XXI).

System that privileges the market and limits state interference

Capitalism is established on the existence of a system of markets and capitals that limits interference to the states and that, According to liberal theories, it must be managed by itself, that is, by the flow of capital itself between a region of the planet and other. Although this notion of a free market is related to the freedom to negotiate and generate wealth, it also implies a framework rather weak and highly chaotic regulatory framework in crisis situations (which are periodic and usually very powerful).

System benefits and more critical

In the social aspect, capitalism has been understood by its most faithful defenders as the first socioeconomic system that gives full freedom to the individual to succeed according to his possibilities and not to established privileges ancestrally. However, those who criticize this system of private property, exaggerated consumption and marital property, maintain that capitalism is just another form of exploitation (this time veiled), as it implies that for some to profit in abundance, others must be exploited, dominated and oppressed in all aspects of their lifetime.

Economic inequality and environmental damage

Today, the capitalist system is the one that really drives most of the world's activities and its negative effects become visible not only on a social level, but also on a cultural and ecological.

The economic inequality that exists in many societies today is always attributed to capitalism and its effects

Now, although it is a fact that in many cases can have an impact, there are also direct responsibilities of the state, due to its inaction or bad policies in generating that inequality Social.

But not only in the social plane are tremendous catastrophes attributed to him, capitalism is also attributed a great responsibility in terms of environmental damage since in this desire to grow and produce constantly it is impossible that at some point the resources that cannot be renewed.

Topics in Capitalism