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Capitalism & State Capitalism (Definitions (Capitalism (Theoretically…
Capitalism & State Capitalism
Definitions
Capitalism
Theoretically enabling efficient allocation of resources and price discovery
Economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state - advocates believe state should not intervene
Capitalism
requires
a
free
market
economy to succeed
State Capitalism
Economic system in which private capitalism is modified by a varying degree of government ownership and control
Seeking an alternative economic model
Conclusion
do not believe capitalism itself has failed. It hasn’t even had a chance to succeed
There are alternatives to capitalism. We just need the political will
Capitalism
Benefits
Increased competition
- increased quality and decreased prices to the consumer and drives innovation
Economic growth
the production and price of goods are determined by the market rather than the government.
Efficiency
- Firms in a capitalist based society face incentives to be efficient and produce goods which are in demand.
Drawbacks
Economic stability is unstable
Profit incentive
biggest criticism - may lead to social and economic inequality. Money oriented economy