Capitalism & Values
assumptions & features of capitalism
modifications in American capitalism
values promoted by capitalism
critical questions for capitalism
II Values in American Society
Definition of Capitalism:
a constantly changing system in which the means of production are privately owned and the market operates to guide production and distribute income
first expressed by Adam Smith in The Wealth of Nations, 1776
Based on several fundamental assumptions:
1. humans are rational and capable of gaining full information
2. existence of full employment
only instance where freedom for all individuals exists
3. all factors of production are commodities
work and life are separate
4. recipients of income would accept rewards as equitable
Key features of capitalism:
the fuel of capitalism based on the assumption that people are motivated by their own self-interests
regulates individual economic activity, keeps supply and demand at bay
people may buy, sell, lease, franchise, and engage in a variety of contractual arrangements with respect to their assets
capitalism permits the creation of business organizations that exist separate from the people associated with them
A brief history of capitalism:
41BC-500AD: Expansion of Roman Empire
*driven by desire to control goods
1500-1700s: Merchant Capitalism & Mercantilism
*a system of trade for profit, although commodities were still largely
produced by non-capitalist production methods
1750-1870s: Industrial Capitalism & Laissez-Faire
*Polanyi: capitalism began with free trade in Britain in the 1830s
1870s-1930s: Finance Capitalism & Monopoly Capitalism
*control of large areas of industry came into the hands of financiers
*subordination of process of production to the accumulation of profits
1930s-1970s: Capitalism’s Great Leap Forward
*rise of welfare-statism, monetarism, neoliberalism
1970s-Present: Neoliberal Global Capitalism
*rise of post-industrialism, neo-imperialism
*”capitalism with the gloves off”
Modifications in American capitalism:
“Pure” form capitalism never existed.
Large amassings of corporate power have been built.
Serious social problems have emerged.
economic polarization, crime, environmental degradation
Profit motive swamped the other features.
Government intervention grew to curtail greed.
Corporate $$ influenced government in their favor.
r > g
5,000 Americans were recently asked how they thought wealth is distributed in the United States. Most thought that it is more balanced than it actually is. Asked to choose their ideal distribution of wealth, 92% picked one that was even more equitable.
Critical questions for capitalism:
Are humans merely economic creatures?
Does capitalism promote inequality?
Is competition a good thing?
Does capitalism exploit and alienate?
Radical Resource Productivity
slows resource depletion at one end of the value chain,
lowers pollution at the other end
redesign industrial systems along biological lines
Service and Flow Economy
a new perception of value, a shift from the acquisition of goods
as a measure of affluence to an economy where the continuous
receipt of quality, utility, and performance promotes well-being
Investing in Natural Capital
reversing world-wide planetary destruction through reinvestments
in sustaining, restoring, and expanding stocks of natural capital
An individual’s concept of what is good, worthy, important;
can also be generalized and attributed to a group or entire culture
Type of life each of us seeks to live reflects our individual values:
following a profession, devoting ourselves to community service,
raising a family, seeking solitude, pursuing scientific truth, striving
for athletic excellence, amassing political power, being popular
Brief chronology of American values:
Protestant Work Ethic: “survival of the fittest,” hard work,
discipline, self-reliance, saving & planning ahead, clear
definition of success & failure, competition, honesty &
observing the rules of the game
Bureaucratic Ethic: spending, consumption, immediate
gratification, self-fulfillment, efficiency, quantification,
progress, spiritual meaninglessness, as well as the more
traditional values of love, brotherhood, loyalty, honesty,
truth, justice, equity
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