Describe the concept of capitalism


I would wish to state you about capitalist economy which has been characterized as “creative destruction” . The chief ends of my undertaking are to depict the construct of capitalist economy, the history of capitalist economy and its basic lines, to turn out the thesis that capitalist economy is truly a originative devastation and to reply inquiry how the opposing forces of alteration bear on the inquiry of the significance and experience of work today.

The construct of capitalist economy

Harmonizing to Mark Block the word “capitalist” is “ a sliver of a slang of speculators at the first European stock exchanges ” . ( Blok,1973 )

Harmonizing to Akulov capitalist economy is the economic system of the industry and distribution based on a private belongings, general legal equality and a freedom of endeavor. The chief standard for the credence of economic determinations is the aspiration to increase a capital and to acquire a net income.

The celebrated scientific Yavlinsky considers capitalist economy to be an economic abstraction in which characteristic characteristics of economic system are allocated at a certain phase of its development. The existent economic system of the concrete states has ne’er based merely on a private belongings and has non given a full freedom of endeavor. There were ever unusual lines for capitalist economy such as category privileges, limitations on ownership of the belongings, including limitations on the sizes of the existent estate or the land countries, traffic walls, anti-monopoly regulations, etc. A portion from them is a heritage of the old era.

Capitalism is an economic system in which industrial determinations are supervised by those who invests in a private concern. Therefore, the joint-stock companies are supervised by stockholders.

The basic characteristics of capitalist economy are a domination of commodity-money dealingss and a private belongings on the agencies of production. The presence of the developed public division of labor, growing of nationalization of industry, transmutation of a labor into the goods, operation of hired workers by capitalists. The intent of capitalist industry is to have a excess value created by occupation of hired workers. Capitalism passes some phases in its development, but its typical lines are the same.

The basic capitalist economy ‘s contradiction between the public character of industry and the private-capitalist signifier of assignment of its consequences generates the industry lawlessness, unemployment, economic crises and the sturdy battle between the basic categories of a capitalist society.

Capitalism history

Mark Blok marks trouble to stipulate a concrete clip of happening of capitalist economy in his work “History Apologia” .

The happening of the industrial capitalist economy concerns a boundary of the eighteenth and 19th centuries. The usage of steam-engines leads to the fact that workshops and industries turn to immense mills. Owning their ain agencies of production, the handicrafts-men bend to a category of the hired workers. Capitalists form a opinion category and push aside the old landholders.

Colonialism was a characteristic component of developing capitalist economy. About 3rd of English investings had the Indian beginning. At this clip England wins Bengal and turns to colonial imperium.

Classical capitalist economy disappears in the XX-th century and the agencies of production base on balls to the province custodies ( the socialist undertaking ) or to the custodies of joint-stock companies ( the neoliberal undertaking ) .

But we can follow through the history that capitalist economy keeps the basic lines though undergoes certain alterations. The province, trade brotherhoods and other public institutes earnestly increase the size of a payment and societal tax write-offs. The figure of workers steadily falls in the domain of production of goods and the figure of workers rises in the domain of services.

The proprietors of the capital transportation the industry to developing states in order to cut down the disbursals on a payment of the labor, revenue enhancement and societal tax write-offs.

Capitalism possesses the undermentioned lines

The footing of economic system is made by trade good industry. Everything is made for the sale or for the exchange. The exchange occurs in the free markets on the footing of reciprocally advantageous contracts ( market economic system ) .

The agency of production are used as a capital. Owners of the capital ( capitalists ) have a great chance non to accept a engagement in the productive work. The beginning of their critical approvals is the excess value in the signifier of the net income, rent or per centum.

The portion of a given capital in the general involved amount which was required for the given undertaking is a footing for the excess value subdivision between assorted capitalists.

Therefore, the grade of a personal labor engagement has no value. Such engagement can be compensated before the net income distribution ( for illustration, in the signifier of rewards to a manager or to a director ) or can be compensated as a payment of the capital of the certain size ( for illustration, in the signifier of the rational belongings ) .

The beginning of the critical approvals for the bulk workers is a occupation on the footings of employment.

Capitalism as a originative devastation

The celebrated economic expert Robert Shiller, who is the writer of a book: “How today ‘s Global Financial Crisis happened, and what to make about it? ” wrote in his work that capitalist economy is the universe engine of economic growing. But this dynamism is a originative devastation. Unsuccessful houses are rejected to allow go through to new and best houses and people whose productive ability lessenings ( frequently non on their mistake ) can be besides thrown out the market. Their calling can be interrupted and their investings are reduced to a portion from their old value.

Shumpeter, the former Minister of Finance of Austria and the professor of the Harward concern school has expressed a capitalist economy kernel as A«creative destructionA» . He says that capitalist economy is a uninterrupted replacing of outdated inefficient procedure or the administration new, more effectual. J. Shumpeter shows that the new merchandise, procedure or a manner of the administration can be effectual and favorable, therefore destructing the old administration. He considered a originative devastation to be a procedure of transmutation which accompanies the extremist inventions.


In decision I want to state that I proved the thesis that capitalist economy is a originative devastation because the cardinal urge which supports the capitalist economy engine in motion, returns from the new consumers, the new goods, new methods of industry and transit, from the new markets and new signifiers of industrial administrations. This procedure calls a originative devastation. The construct of a originative devastation is a cardinal word for capitalist economy. Furthermore, the chief deficiencies of capitalist economy are the unequal distribution of the approvals, the absence of uniting base, the lawlessness which was born by a private belongings and dividing to the policy and economic system. That ‘s why the opposing forces of alteration bear on the inquiry of the significance and experience of work today.

Plants cited

Akulov, V. B. & A ; Akulov, O. V The Economic Theory.. Petrozavodsk: PetrGU, 2002.

Blok, M. History apology, 2nd erectile dysfunction. ? : Cognition, 1973.

Shiller, R. The Subprime Solution: How Today ‘s Global Financial Crisis Happened, and What to Make about It. Princeton University Press, 2008.

Shumpeter, J.A. Capitalism, Socialism and Democracy: the Lane with English translated by V.S.Avtonomova. M: Economy, 1995.

Yavlinsky, G. We are traveling to build what economic system and what society and how it to accomplish? ( The economic policy and a long-run scheme of modernisation of the state ) . Meter: Lotos, 2004.