Capitalism is a socioeconomic system that espouses privately-owned property, freely-formed contracts, and non-interfering government. http://business.clemson.edu/bbtcenter/cci/capres/wci/int/int.html Its economic components are division of labor, competition, prices, money, and banking. http://business.clemson.edu/bbtcenter/cci/capres/wci/econ/econ.html Achievement of economic order requires an individual's right to pursue economic self-interest. http://business.clemson.edu/bbtcenter/cci/capres/wci/econ/econ.html The social components of a capitalist society are the individual's right to life, property, and execution of contracts. http://business.clemson.edu/bbtcenter/cci/capres/wci/bp/bp.html Government's role is the protection of those rights. http://www.capitalism.org/faq/government.htm http://business.clemson.edu/bbtcenter/cci/capres/wci/bp/bp.html
Modern capitalism developed from the concepts presented in Adam Smith's Wealth of Nations. http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM Smith's proposal contained four basic principles. 1) Limit the number of people owning the resources (means of production). http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM 2) Work uninvested individuals (production labor) for a wage to produce and distribute goods. http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM 3) Increase individual productivity through "division of labor". http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM 4) Manipulate labor and the means of production to "realize a profit". http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM
Capitalism is profit driven. http://econlib.org/library/Enc/Capitalism.html It depends on a consumer culture that defines itself "by the objects they purchase rather than the objects they produce." http://econlib.org/library/Enc/Capitalism.html http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM Capitalists own the means of production and hire individuals at wages to realize a profit. http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM He acquires goods, distributes them to consumers at a higher price, and earns a profit. http://www.wsu.edu/~dee/GLOSSARY/CAPITAL.HTM
Capitalism Helping the Poor
In 2008, Microsoft founder Bill Gates promoted creative capitalism. http://www.time.com/time/business/article/0,8599,1828069,00.html Creative capitalism involves corporations making a profit from helping the world's poorest citizens. http://www.time.com/time/business/article/0,8599,1828069,00.html He suggests making technological innovations accessible, expanding into developing markets, and discounting current products and services. http://www.time.com/time/business/article/0,8599,1828069,00.html
In 2010, an investment in SKS Microfinance netted venture capitalist and Sun Microsystems co-founder Vinod Khosla $117 million. http://blogs.forbes.com/csr/2010/10/20/khoslanomics-how-capitalism-can-solve-poverty/?boxes=leadershipchannellatest SKS Microfinance lends money to poor women in India. http://dealbook.blogs.nytimes.com/2010/10/06/sun-co-founder-uses-capitalism-to-help-poor/
Creative Capitalism
Time Magazine editor Richard Stengel interviews Microsoft founder Bill Gates about creative capitalism. Gates defines creative capitalism as large companies focusing their wealth, resources, and innovation power on the needs of the world's poorest citizens. He cites medical breakthroughs, better food nutrition, and new forms of banking as some ways to close the gap between the rich and poor.
References
Fast Facts
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Earliest form
Mercantilism of Rome, the Middle East, and the early Middle Ages
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Laissez-faire capitalism
Separation of economy and state
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Division of labor
Expanding labor productivity via specialization
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Key figures
Max Weber, Adam Smith, Ludwig von Mises, Jean-Baptiste Say, and Carl Menger http://econlib.org/library/Enc/bios/Weber.html http://econlib.org/library/Enc/bios/Smith.html http://econlib.org/library/Enc/bios/Mises.html http://econlib.org/library/Enc/bios/Say.html
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Modern Critics
Ralph Nader, Mark Green, Charles Lindblom, and Robert Dahl
