Capitalism

Capitalism


        SENIOR PROJECT RESEARCH PAPER


        BY    JASON GERKEN


        CAREER ENGLISH

        MRS. CONLON

        5/14/95


          Today in the United States, a free market system or capitalism is the

main economic system.  I am interested in this subject because I someday wish to

own my own business.  I believe that in the future this topic will be very

useful to me.  Among the topics that I will discuss are the greeks and romans

early practices of capitalism,  the ideas of Joseph Schumpeter, Rush Limbaugh,

and Karl Marx,  corporations, regulation by the government, and Reaganomics.  I

will also discuss the relationship between inflation and unemployment.  In

addition, I will give my own perspective on the economic theories that I'm

presenting. These are just a few of the things that I will be discussing in this

paper.


HISTORY OF CAPITALISM


          Many of the institutions of capitalism can be traced back to Greek and

Roman times.  Things such as trade, moneylending, and insurance were well known

practices to them.  Unfortunatly, growth of the Roman Empire prevented further

development of a private business class.  As power over economic growth came

back to the people or lords during the Middle Ages, modern capitalism started to

evolve.  (The Software Toolworks Illistrated Encyclopedia)


          In the late Middle Ages, the medieval economy was based on MANORALISM.

This system said that peasants worked on the land that the lord's owned,  but

everthing that was produced by them was kept in return they had to perform

services or pay dues to there lord.  During this time period, there was no

incentive to produce large and productive resources.  The end of the midieval

Manoralism was brought about by a larger demand for goods.  Kings competed

against lords, and lords competed with peasants for the rights to what was

produced.  As a result, there was an emergence of merchants and businessmen who

accumulated large sums of capital.  In addition, there was also a large

emergence of banks and the start of corporations.  (Galbraith Pg. 58)

          The only other economic system that got much attention was a new idea

called Communism.  A person named Karl Marx wrote a book called the Communist

Manifesto which thought of the state as being the main controller of economic

growth,  unlike capitalism where the people in a free market are the main

controllers of economic growth.  In the 19th century when most of the world like

Britan, France, Germany, and the United States were in the age of Laissez-Faire

economic capitalism, other countries like the Soviet Union and China followed

Karl Marx's Communism.  (Galbraith Pg. 97)


Modern Capitalism


          The main thing that drives capitalism today is the large corporations

that are able to finance large operations to promote economic growth.  As

corporations got bigger and bigger, many liberals favored breaking up

corporations and putting them under state control.  They pressed for antitrust

laws to get a competitive economy.  This meant that some corporations that got

too big had to be broken up to make smaller companies in order to create a

competitive economy.  The large corporations fought back by saying that they

were no less competitive than smaller businesses.  An Austrian-American

economist named Joseph Schumpeter who argued in defense of large corporations

said, "the prime mover in capitalist progress is not the small businessperson

but the entrepreneur who introduces new technologies and develops them."  He

also said "Capitalism gives creative people the freedom to make innovations,

unlike state-runned economies which tended to stifle this creative force."  He

also predicted that capitalism would eventually be replaced by some form of

socialism in order to protect the people and the global environment.  (The

Software Toolworks Illistrated Encyclopedia)


Arguments for and Against


          Capitalism today differs from capitalism of the 19th century because

of its dependence on the state.  Today government isThis is ONLY a preview of the article. If you would like to view the entire document, you must subscribe to Electronic References. Please register below now!


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