Capitalism

Definition

Capitalism is an economic system characterized by private ownership of the means of production and the operation for profit, where supply and demand dictate prices. This system fosters competition, encourages innovation, and often results in significant wealth disparities. The connection to social movements, particularly in recent years, highlights how capitalism intersects with issues of gender, race, and class, influencing activism and economic opportunities.

5 Must Know Facts For Your Next Test

1. Capitalism promotes individual entrepreneurship, allowing people to start their own businesses and innovate based on market needs.
2. In capitalist societies, economic power often translates into social power, resulting in structural inequalities based on wealth accumulation.
3. The rise of digital technology and the internet has transformed capitalism into a more globalized system, where businesses can operate across borders.
4. Critics argue that capitalism can lead to exploitation of workers and environmental degradation as companies prioritize profit over social responsibility.
5. Recent movements have sought to address the impact of capitalism on marginalized groups, advocating for reforms that promote economic justice and equality.

Review Questions

• How does capitalism create opportunities for individual entrepreneurship while also contributing to wealth disparities?
  • Capitalism fosters a competitive environment where individuals can pursue their entrepreneurial ambitions, leading to innovation and new business ventures. However, this system also tends to favor those with existing wealth or resources, resulting in wealth disparities. Those with capital can invest more easily in businesses or take risks that others may not afford, thus perpetuating inequalities within society as some individuals accumulate more wealth while others struggle.
• In what ways has digital technology influenced the evolution of capitalism in recent years?
  • Digital technology has significantly transformed capitalism by enabling globalized commerce, allowing businesses to reach broader markets through online platforms. This shift has changed traditional economic structures and created new business models like e-commerce and gig economies. However, it has also led to new challenges, such as the rise of monopolies in tech industries and increased scrutiny over labor conditions for gig workers, prompting discussions around economic reform.
• Evaluate the impact of capitalism on marginalized communities and how recent social movements are addressing these challenges.
  • Capitalism often exacerbates inequalities faced by marginalized communities due to systemic barriers that limit access to resources and opportunities. Social movements have emerged in response to these inequities, advocating for changes that promote economic justice, fair wages, and corporate accountability. These movements highlight the need for reforms within capitalist systems that address exploitation and ensure equitable access to economic opportunities for all individuals.

Related terms

Neoliberalism: A political and economic philosophy that promotes free-market capitalism, deregulation of industries, and reduction in government spending on social programs.

Intersectionality: A framework for understanding how various forms of social stratification, such as race, gender, class, and sexuality, intersect to create unique dynamics of privilege and oppression.

Consumerism: The cultural and economic ideology that encourages the acquisition of goods and services in ever-increasing amounts, often seen as a driving force in capitalist societies.