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Keylonnie M
Inquiry Skills, Funk
Block 21
4-28-14
Capitalism: Made Anew
Capitalist has become an accusation. The creative destruction that is at the heart of a
growing economy is now seen as evil. Americans increasingly appear to accept the mindset that
kept the world in poverty for millennia, If youre rich, it is because youve made someone else
poorer. And so capitalisms reputation has fallen on hard times and the principled case for
capitalism must be made anew. (Warren Capitalism) In light of recent events, capitalism has
been on the mind of many Americans, thus the American people are asking what exactly
capitalism, should it be allowed in America, do the values that drive capitalism follow the theme
of our constitution, and Americans need to realize that our capitalist economy is the most
beneficial type of economy for America to prosper.
Defining Capitalism
Before making a case for capitalism, we must first define it. Capitalism is made up of
four major characteristics; a privately owned market, buyers and sellers ability to control the
economy, the free-will to spend money, and minimal government involvement. Capitalism is
often associated with economic growth. The basic theory behind capitalism is that buying and
producing more goods will be better for a country and its people.(Haskell Capitalism) For,
over-production leads to competition, the fuel of a capitalist economy. Capitalism is simple a
system of competitive exploitation. In a capitalist economy, every business is permanently in
competition with other businesses; corner stores compete with corner stores, department stores
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compete with other department stores, restaurants compete with other restaurants, etc. That is
capitalism.
So how does capitalism work? Well stated before, capitalism locks businesses into
permanent competition with other businesses, due to over-production. This introduces the basic
theory of survival of the fittest, in a capitalist economy only the best businesses will make it, and
every business out there is trying to make it big. Capitalism rewards those who work hard and
strive for excellence. It does not reward the lazy or those who make excuses for their lot in life.
The best part is that anyone can be rewarded for striving for excellence, the opportunity is open
to all. (Roberts, Capitalism)
The History of Capitalism
The term Capitalism comes from an economist by the name of Karl Marx in the 19
th

century. Yet, the concept of capitalism originates from a Scottish political economist, Adam
Smith, in 1776. It was through his book, An Inquiry into the Nature and Causes of the Wealth
of Nations, that Adam Smith introduced the idea of capitalism to the world. Many believe that
Adam Smith created the idea of a capitalist economy due to the humanistic ideals of the 18
th

century European Enlightenment beliefs that each human being is individually unique and
valuable(Capitalism through the Years).
The major years of capitalism fall into two periods, 1700s to 1920, and 1920 to the
present day. Before these two time periods, handicraft, subsistence production and commercial
production of tobacco are the earliest components of the emerging capitalist economies around
the world. Before the 1790s capitalism could be found in its true form; a privately owned market,
buyers and sellers ability to control the economy, the free-will to spend money, and no
government involvement. However, with the Industrial Revolution came child labor, sweat
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shops, protest which led to government involvement through laws and regulations dealing with
labor. Still, during the first major period in the history of capitalism, five men; Cornelius
Vanderbilt, John D. Rockefeller, Andrew Carnegie, J.P. Morgan, and Henry Ford, take
capitalism and use to benefit them so well, that to this day very few people are known to have
used capitalism on the same scale as these men. All five men owned the largest industries in their
field of supply and dominated, and their companies still are one of the largest industries in their
field of supply. Finally, looking from the 1920s to the present and we see countries like the
U.S.A. and Canada dominating the capitalist market. Also as of lately, we are seeing tiger
economies coming from Asia aiming for the same capital success as the U.S.A. and
Canada.(Capitalism Page 1) However, capitalism is rarely found in its true form in todays
society. Nations that are said to have a capitalist economy, in fact have mixed economies. The
United States for example, uses two economic systems primarily, capitalism and socialism, to
run its economy. The U.S. uses capitalism for so long until the economy is unstable and then the
U.S. uses socialism to stabilize the economy again. This pattern is repeated over and over again,
rebounding from the Great Depression and rebounding now for the current recession.
Values of Capitalism
The basis of capitalism is individualism (Capitalism Page 4). Which is most likely due
to capitalism stemming from the humanistic ideals of the 18th century European Enlightenment
beliefs that each human being is individually unique and valuable. Today, capitalism has
become synonymous with the American ideal of self-determination. We see this due to the fact
that to succeed in a capitalist economy one must strive for excellence, they must seize the
opportunity and run with it. A capitalist economy provides an opportunity for everybody to
succeed, which is similar to the theme in our constitution, that every man is free and has
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unalienable rights. For instance, Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie,
J.P. Morgan, and Henry Ford, the five men who utilized capitalism on a scale untouched by
many in the first major period in the history of capitalism, all came from meager means.
(Comcast Spotlight). Yet, they seized the opportunities presented to them due to capitalism and
went from living meagerly to living with so much wealthy that in 1893 they could help bailout
the government with their own money. They achieved all of their success through self-
determination, a key value in capitalism and in the U.S. Constitution. Also, these five men
created the American Dream and they would not have been able to if not for capitalism.
However even though many of the values of capitalism are respectable, some are shady.
For, greed essentially powers the capitalist economy. A capitalist economy emphasizes the
consumption of goods. These competitive drive makes capitalism more dynamic than any
previous economic system, such as feudalism but also more destructive and dangerous.
(Molyreux Capitalism Causes Wars) Also capitalism is criticized for its basic focus on profit
and how that focus can lead to inequality. In addition, the things that stem from capitalism, like
corporatism -- a political system in which legislative power is given to corporations that
represent economic, industrial, and professional groups, monopolies -- a persistent market
situation where there is only one provider of a product or service, collusive capitalism --
centralized form of cohabitation between the government and the economic elite, and crony
capitalism -- an economy in which success in business depends on close relationships between
business people and government officials, ruin capitalism, giving it a corrupt name, and they
must be guarded against.
The Outcomes of Capitalism
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Capitalism builds wealth, which is why countries are so fond of a capitalist economy.
Plus, capitalism has lifted the world out of poverty because it gives people a chance to get rich
by creating value and reaping rewards.(Warren Capitalism).We can turn and look at China.
As China grows more capitalist, they are growing like crazy economically and are leading the
way when it comes to the emerging tiger economies of Asia. It is very common to see things
with Made in China stamped underneath them.
However we still have to view the negative outcomes. In a capitalist economy, even
though people dont like to focus on this, it is still true to some extent, if you are rich it is
because you made someone poorer. When people buy they give you their money making you
richer and them poorer, its as simple as that. Plus, capitalism is known to drive economic
systems into instability. For example, looking at the United States again, the Reagan and two
Bush administrations during their time in office got really ideological and deregulated a lot,
making the U.S. economy very capitalist, which caused a disaster. Same thing happened in the
20s. Its the simple idea that capitalism builds wealth and socialism builds stability. So when
capitalism drives the system into instability due to all the spending and greed, socialism comes in
to stabilize thing and then we move back toward capitalism until it crashes and destabilizes the
economy. Plus, not all societies can practice capitalism. First, they must inculcate certain
policies and principles which are necessary for capitalism to thrive. Also, the government on any
nation that practices capitalism must use a combination of monetary and fiscal policy to achieve
wealth distribution. The government must use a combination of tax and welfare programs to
attempt to strike a balance. (Naira Opinions on Capitalism)
Conclusion
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In conclusion, even though capitalism does have its faults, it is extremely beneficial to the
American economy. In addition, it is not only beneficial to our economy, but it exemplifies the
theme of our constitution and the values of the American people. Capitalism is an essential part
in the American Dream. Could you imagine a world without capitalism? Could you imagine our
country without capitalism? Capitalism has not only shaped the United States of America, but
the world.

















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Annotated Bibliography: Capitalism in America
Bruce, Scott R. "The Political Economy of Capitalism." (2006): 1-7. Web. 7 Apr. 2014.
Defining capitalism, very in depth and explaining how it works.

"Capitalism." Investopedia.com. Investopedia, n.d. Web. 7 Apr. 2014.
Covers what capitalism is all about and why it is thought of as a good and bad thing.

McChesney, Robert W., and John B. Foster. "Capitalism, The Absurd System: A View
from the U.S." Monthlyreview.com. Monthly Review, 1 June 2010. Web. 7 Apr. 2014.
Covers how even though capitalism powers the U.S. economy, it is an "absurd system" and
needs to be addressed

Meyerson, Harold. "The Growing Tension between Capitalism and Deomcracy."
Thewashingtonpost.com. The Washington Post, 25 Nov. 2011. Web. 7 Apr. 2014.
Covers the idea that capitalism is challenging democracy, yet the two can't survive without each
other. It also covers, the view of other countries on capitalism.

Murray, Charles. "Why Capitalsim Has an Image Problem." American Enterprise
Institute (2012): n. pag. Web. 7 Apr. 2014.
Covers the history of capitalism and its negative image today in America

Nunno, Rachael, and Jed Nunno. "Top 10 Greatest Benefits of Capitalism."
Listverse.com. ListVerse, 24 Dec. 2010. Web. 7 Apr. 2014.
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List ten benefits of capitalism, and then goes into detail about every point on the list.

Perry, Mark, and Thomas Hemphill. "Myths of American 'Cowboy Capitalism'" The
American (2013): 1. Web. 7 Apr. 2014.
Identifies false views of American capitalism

Roger, Daniel. "Capitalism Through the Years." (2008): n. pag. Web. 7 May 2014.
Covers the history of capitalism dating back to Adam Smith

Saint-Paul, Gilles. "Will Limited Needs Kill Capitalism?" Capitalism and Society (2006):
n. pag. Web. 7 Apr. 2014.
Understanding the assumptions made about capitalism, both false and true.

Thomas. "Capitalism vs. Democracy." Newyorktimes.com. The New York Times, 28
Jan. 2014. Web. 7 Apr. 2014.
Covers how capitalism leads to inequality and needs to be changed