Capitalism

Definition

Etymology

Theword"capital"intheLatintermcomesfromthesaleandpossessionofanimals,and"capitalis"comesfromtheoriginalIndo-EuropeanlanguageThe"kaput"-meaning"head","head"isawayofmeasuringwealthinancientEurope:themore"heads"ofcattleapersonhas,thericherthepersonwillbe.Thewords"chattel"(meaningcommodity,animalorslave)and"cattle"(cattle)arealsoderivedfrom"kaput".Inthe12thto13thcenturies,theterm"capital"begantobeusedtodescribecapital,inventoryofgoods,amountofcurrency,orprofitfromcurrency.

DavidRicardousedtheterm"capitalist"manytimesinhis"PrinciplesofPoliticalEconomyandTaxation"in1817.TheEnglishpoetSamuelTaylorColeridgealsomentionedthisterminhisworksin1823.In1867Pierre-JosephPrudhonalsousedtheterm"capitalist"torefertocapital.Everyone.KarlMarxandFriedrichEngelsusedKapitalistinCapitaltodescribeprivateindividualswhoowncapital,butinsteadofdirectlyusingthetermcapitalism,theyusethe“capitalistmodeofproduction”.Thistermappearsmorethan2,600timesinCapital.ButlaterresearchconfirmedthatMarxusedthetermcapitalisminhismanuscripts.

Thesuffix"ism"canbeusedtoindicateacertainhistoricalstate,acertainmovement,acertainideologicalsystem,oracertaincombinationoftheabovemeanings.Thefirsttousetheterm"capitalism"wastheEnglishnovelistWilliamMakepeaceThackeray(WilliamMakepeaceThackeray),whoexpressedtheownershipoflargeamountsofcapitalratherthanasystemofproduction.However,thefirsttousetheterm"capitalism"todescribetheproductionsystemwastheGermaneconomistWienerSombartinhisbook"JewsandModernCapitalism"in1902.MaxWeber,aclosefriendandcolleagueofSombart,alsousedthetermin1904'sProtestantEthicsandtheSpiritofCapitalism.

Differentdefinitions

Therearedifferentopinionsonthedefinitionofcapitalism.

Thisentryusesthedefinitionof"socialsystem"becausethecapitalistmodeofproductionalsodeterminesitspoliticalandculturalsuperstructure.

The"DictionaryoftheCentury"publishedin1909isdefinedas:acountrywithcapitalorproperty;possessionofcapital.Alargeamountofcapitalisconcentratedinthehandsofafewpeople;and,thepowerorinfluenceoveralargeorcombinedcapital.

Westerneconomicsgenerallyregardsitasan"economicsystem."ThedefinitionofcapitalisminMerriam-Webster’sdictionaryis:“Aneconomicsysteminwhichindividualsorcompaniesowncapitalandproperty.Investmentismadebyindividualsratherthancontrolledbythestate.Prices,production,andsalesofproductsaremainlyTheyarealldeterminedbythefreemarket."The1987editionoftheOxfordEnglishDictionaryoftheUnitedKingdomdefinesitas:"Theconditionofpossessionofcapital;theidentityofcapitalists;thesystemthatsupportstheexistenceofcapitalists."

Features

Mainfeatures

Economically,theprivatesectorisdominated,withnogovernmentinterventionorlessgovernmentintervention.Politically,thebourgeoispartyisinpower,orthebourgeoisdemocraticpoliticalsystemisimplemented.

Capitalism(2photos)

Productionisforsaleratherthanforusebytheproducer;thereisamarketforbuyingandsellinglabor,andtheexchangemethodisbasedonacertainperiodoftime.Paymentofmonetarywages(hourlywagesystem)ormonetarywagesforaspecificjob(piece-ratewagesystem);theuseofcurrencyasamediumofexchange,ifnotuniversal,isadominantphenomenon.Becauseoftakingtheformofcurrency,capitalallowsitsownerstohavemaximumschedulingflexibility;capitalistsmaycontroltheproductionprocess,whichmeansthatnotonlydotheyhavecontroloverthehiringanddismissalofworkers,butalsothechoiceoftechnologyandproducts.Thepreparation,laborenvironment,andproductsalesalsohavecontroloverthefinancialdecision-making.Undercapitalistconditions,businessownershavetherighttoraisefundsbyborrowing,issuingstocks,andcollateralizingfactories.Workershavenorighttodecideonthis;

Thecontradictionbetweenthesocializationofproductionandtheprivateownershipofcapitalistmeansofproductionconstitutesthebasiccontradictionofcapitalistsociety.Thisbasiccontradictionrunsthroughthedevelopmentofcapitalism.ItiseconomicallymanifestedasThecontradictionbetweentheorganizedproductionofindividualenterprisesandtheanarchyoftheproductionoftheentiresocietyispoliticallymanifestedasthecontradictionbetweenthebourgeoisieandtheproletariat.

Thedevelopmentofcapitalismhasgonethroughtwomajorstages-freecompetitioncapitalismandmonopolycapitalism.

Inlinewiththerulingformofcapitalistproductionrelations,varioussuperstructuresbeforecapitalismwerereplacedbybourgeoissuperstructures,resultinginabourgeoisstatepower,legalsystem,andideologicalsystem.Includingthecapitalistmodeofproductionandthesocialsystemofthesuperstructureadaptedtoit.

Thereasonfortheoppositionbetweenthebourgeoisieandtheproletariat:Thesystemformulatedbythecapitalistsismainlytoprotecttheinterestsofthecapitalists;whilesocialismisruledbytheproletariat,andthesystemformulatedbytheproletariatmainlyrepresentstheproletariat.Interests;theinterestsofthebourgeoisieandtheinterestsoftheproletariatareclearlyopposed.

Quantitativeindicators

Ineconomicresearch,thecontroversialeconomicfreedomindexissometimesused.OneofthetwomostfamousindexesispublishedbytheWallStreetJournalandtheHeritageFoundation,andtheotherispublishedbytheFraserInstituteinCanada.Bothindexesattempttomeasurethedegreeofeconomicfreedomofeachcountry,mainlybasedonregulations,thedegreeofgovernmentintervention,privatepropertyrights,andtradefreedom.Theeconomicfreedomindex"economicfreedom"isdefinedas"thepeople'sproduction,sales,andconsumptionofproductsandservicesarenotsubjecttogovernmentcoercionandrestriction"(thisisalsocalledlaissez-faire).

TheyusedatafromindependentorganizationssuchastheUnitedNationstocalculatethescoresofeachcountryondifferentitems,suchasgovernmentsize,taxrate,securityofpropertyrights,degreeoffreetrade,andmarketcontrolDegree.Manyofthepublishedmaterialsarealsousedbyotherindependentthinktankstostudytherelationshipbetweencapitalismandpoverty.TheFraserInstituteadvocatesthat“countriesthatimplementcapitalismmorethoroughlyhavehigherincomes,thepoorest10%ofthepopulationalsohavehigherincomes,higheraveragelifeexpectancy,higherliteracyrates,andlowerinfantmortality.Rate,moreopportunitiestousewaterresources,andlesscorruption.”Thepoorest10%ofthepopulationbetweencapitalistcountriesandnon-capitalistcountriessharethesametotalincomeratio.Somepeopleemphasizetheimportanceofthecreditsystemincapitalism,especiallythefunctionsplayedbysmallloans.

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Theoreticalbasis

Mosttheoristsknownascapitalismappearedinthe18th,19th,and20thcenturies,suchasDuringtheindustrialrevolutionandEuropeanimperialism(suchasSmithandRicardo),andduringtheGreatDepression(suchasKeynes)andtheColdWar(suchasHayek,Fleming).

Thesetheoristsdefinecapitalismasasysteminwhichcapitalisownedbyprivateindividuals(sometimescalled“capitalists”),andeconomicdecisionsanddecisionsaremadebythemarket—thatis,throughThetradecarriedoutbyagreementbetweenthesellerandthebuyer;itisoperatedbythewisdomofthemarketandentrepreneurialspirit,aswellasthepropertyrightsandcontractsystemprotectedbylaw.Thesetheoristsalsotrytoexplainwhycapitalismcanproducegreatereconomicgrowththanthegovernment-involvedeconomy.(SeeEconomics,PoliticalPhilosophy,Laissez-faire)

TheFinnishParliamentaryMemberAndersChydenius(AndersChydenius)publishedthebook"TheNationalGain"in1765,becomingthefirsttoadvocateAmanoftradeandindustrialfreedomandliberalprinciples,11yearslater,in1776,AdamSmithpublishedthebook"TheWealthofNations".

In1867Pierre-JosephProudhon(Pierre-JosephProudhon)usedtheterm"capitalist"torefertotheownerofcapital.However,thefirsttousetheterm"capitalism"todescribetheproductionsystemwastheGermaneconomistWernerSombartinhis1902book"DieJudenunddasWirtschaftsleben".MaxWeber,aclosefriendandcolleagueofSombart,alsousedthetermin1904'sDieprotestantischeEthikundderGeistdesKapitalismus(DieprotestantischeEthikundderGeistdesKapitalismus).

Theconceptofcapitalismhasalsochangedovertime,anditalsovarieswithpoliticalviewsandanalyticalmethods.TheeconomicliberalismsupportedbyAdamSmithfocusesontheenlightenmentroleplayedbyhumanself-interest(the"invisiblehand")andthespecificroleitplaysinincreasingtheefficiencyofcapitalaccumulation.

Someproponentsofcapitalism(suchasMiltonFleming,AynRand,andAlanGreenspan)emphasizetheroleofthefreemarket.TheybelievethatthefreemarketcanPromotecooperation,innovation,economicgrowth,andfreedombetweenindividuals.Somepeople(suchasthesociologistEmmanuelWallerstein)believethatthehubofcapitalismliesinaneconomicsystemthatallowsproductsandservicestobetradedinthemarket,andthattheproductsofcapitalbelongtonon-stateentitiesandareintheglobalmarket.Operateonscale.

TheeconomistsoftheAustrianSchoolofEconomicsarguethatduetothephenomenonofself-organizationoftheeconomy,theeconomywithoutgovernmentplanningandguidancewillhavebetterefficiency.

Produced

Capitalistrelationsofproductionoriginatedwithinthefeudalsociety.Thedisintegrationoftheeconomicstructureoffeudalsocietyliberatedtheelementsofcapitalism.Inthe14thand15thcenturies,somecitiesalongtheMediterraneancoast(suchasVenice)hadsparselyemergedthebudsofcapitalistproductionrelations,butthecapitalisteraonlybeganinthe16thcentury.

Attheendoffeudalsociety,thedevelopmentofcommodityeconomypromotedthedisintegrationofthenaturaleconomyoffeudalsocietyandcausedthepolarizationofsmallcommodityproducers.Theprimitiveaccumulationofcapitalhasacceleratedthisdifferentiation.Thebasicconditionsfortheproductionofcapitalistmodesofproductionare:ontheonehand,alargenumberofproletarianswhohavelosttheirmeansofproductionandhavetoselltheirlaborareproduced;ontheotherhand,hugeamountsofmoneyandmeansofproductionareconcentratedinafew.Transformedintocapitalinhumanhands.Theso-calledprimitiveaccumulationofcapitalisthehistoricalprocessofforciblyseparatingnaturalpersonsfromtheirmeansofproduction,andthedeprivationofpeasants'landisthebasisoftheentireprocess.Therearetwowaystoproduceit:oneistodifferentiatefromthesmallcommodityeconomy;theotheristotransformfrommerchantsandusurers.Theself-sufficientnaturaleconomywasdestroyed,andalargenumberoffarmersandhandicraftsmenwentbankrupt,thusprovidingcapitalismwithfreelaborandcreatingacommoditymarketforit.Thehistoryofdeprivingfarmersandhandicraftsmenhasdifferentcharacteristicsindifferentcountriesandhasgonethroughdifferentstages.Thetransformationoflaborforceintocommoditiesandthetransformationofmeansofproductionintocapitalmarksthetransitionfromsimplecommodityproductiontocapitalistproduction,aswellasthetransformationoftheformofexploitationoflaborers,thatis,fromfeudalexploitationtocapitalistexploitation.Theprimitiveaccumulationofcapitalalsoincludestheoccupationandplunderofcolonies,aswellasotherviolentmeansofusingstatepower.

Development

Thecapitalistmodeofproductionisincontradictionwiththefeudalsystem'slocalprivileges,hierarchy,andpersonalattachment.Withthedevelopmentofcapitalism,theeconomicandpoliticalpowerofthebourgeoisiehascontinuedtogrow,preparingconditionsforbourgeoisrevolutionsinvariouscountries.Attheendofthe16thcenturyintheNetherlands,theUnitedKingdominthemid-17thcentury,Franceattheendofthe18thcentury,andGermanyandothercountriesinthemid-19thcentury,bourgeoisrevolutionsbrokeoutsuccessively,whichchangedthefeudalsystem,thusclearingthewayforthecapitalistmodeofproductiontoreplacethefeudalmodeofproduction.Uptheroad.

Thecapitalisteconomywasfinallyestablishedaftertheindustrialrevolution,fromthehandicraftindustrytothemachineindustry.Thegreatgeographicaldiscoveriesattheendofthe15thcenturyandthesubsequentcolonialdevelopmentexpandedthesalesmarketmanytimesandacceleratedthetransformationofhandicraftindustryintoworkshophandicraftindustry.Capitalisthandicraftsinworkshops,duetothedivisionoflaborwithintheworkshops,havegreatlyincreasedlaborproductivitythanthesimpleandcooperativehandicraftsintheearlydaysofcapitalism.Bythe18thcentury,inadvancedcapitalistcountriessuchastheUnitedKingdom,therapidexpansionofthedomesticmarketandtheworldmarketincreasinglycontradictedthenarrowtechnologicalfoundationofthehandicraftindustry.Inordertoobtainmoreprofitsinthecompetition,capitalistsrequirefurtherimprovementsinproductiontechnology.Inthiscase,theIndustrialRevolutionoccurred.ThemachineindustrybornintheIndustrialRevolutionmarkedtheestablishmentofthematerialandtechnologicalfoundationofcapitalistproduction.Thetwoantagonisticclassesofthebourgeoisieandtheproletariathavebecomethebasicclassstructureofcapitalistsociety.Thecontinuousadvancementofscienceandtechnologyanditsapplicationinproductionhavepromotedtherapiddevelopmentofproductiveforces,expandedcapitalistproductionrelationstoallbranchesofproduction,andatthesametimefurtherdevelopedtheconfrontationbetweentheproletariatandthebourgeoisie.Theemergenceanddevelopmentofcapitalismhavecommonlawsineachcountryandbringsimilarconsequences,buteachcountryhasitsowncharacteristicsduetodifferentspecifichistoricalconditions.

Thecontradictionbetweensocializedproductionandcapitalistownershipisalsomanifestedintheoppositionbetweentheorganizationalproductionofindividualenterprisesandtheanarchyofsocialproductionasawhole.Simplecommodityproductionalreadycontainsthegerminationofanarchyinsocialproduction,andthecapitalistmodeofproductionhaspushedthisanarchytotheextreme.Theformationoflarge-scaleindustryandtheworldmarketmadethestrugglebetweencapitalistsuniversalandunprecedentedlyintense.Inordertopossessmoresurplusvalue,capitalistsarealsounderthecontrolofthelawofcompetition,makingeveryefforttoapplytheresultsofscienceandtechnology,constantlyimprovingmachines,andstrengtheningtheorganizationofsocialproductionintheirownenterprises.Asaresult,theycontinuetointensifytheentiresocialproduction.Anarchy.Thehugeexpansionofcapitalistlarge-scaleindustrieshasencounteredrelativelynarrowmarketrestrictionscausedbycapitalistpossession,andtheobjectiveproportionnecessaryforsocializedproductionhasencounteredthedestructionoftheanarchyoftheentiresocialproduction,andconflictshavebecomeinevitable.Since1825,theperiodicoutbreakofcapitalisteconomiccrisesisaprominentmanifestationofsuchconflicts.Inthecrisis,allinstitutionsofthecapitalistmodeofproductionfailedunderthepressureoftheproductiveforcescreatedbythemselves.Thecyclicaleconomiccrisisshowsthatsocialproductivityrequiresitsincreasingpowertogetridofitsattributesascapital,andrequirestherecognitionofitsnatureassocialproductivityinfact.Thisresistanceoftheproductiveforcesforcedthecapitalistclasstopartiallyrecognizethesocialnatureofproductiveforceswithinthelimitsofpossiblecapitalrelations.Joint-stockcompanies,monopolyorganizations,andstateownershipresultingfromtheconcentrationofcapitalaremanifestationsofthistrend.Attheendofthe19thcenturyandthebeginningofthe20thcentury,capitalismtransitionedfromthestageoffreecompetitiontoitshigheststage,thestageofmonopolycapitalism.

Thebipolarworldtheoryreviewstheprocessofexternalpressureandthetransformationoftheinternalsocialformofcapitalisminstages,anddividescapitalismintothelandoccupationcapitalistcolonialsystem,thelandtaxcapitalistcolonialsystemandtherawmaterialmarketcapital.Thethreestagesofdevelopmentofthesocialistcolonialsystemcorrespondtothecolonizationofthepublicproductdomain,thecolonizationofthenaturalmonopolydomain,andthecolonizationofthecompetitivedomain.TheriseofBritaintothemiddleofthe19thcenturywasthestageoflandoccupationandcolonization.Thesocialformofthecolonialsystemwassimilartotheslaveryforlandoccupationintheprimitivesocietyandslavesociety;themiddleofthe19thcenturytotheendofWorldWarIIwasthestageoflandtaxcolonization.Themiddleofthecenturytotheendofthe19thcenturywasthefirstlinkoflandtaxcolonization,andtheendofthe19thcenturytotheendofWorldWarIIwasthesecondlinkoflandtaxcolonization.Thesocialformofthecolonialsystemwassimilartothatofthefeudalsocietyinordertoobtainlandbasedonacertainamountofland.Serfdomforthepurposeoftributetaxespaidbythesurvivingpeople;afterWorldWarIItothefirsthalfofthe21stcentury,itwasthestageofcolonizationoftherawmaterialmarket.AfterWorldWarIItothe1970s,itwasthefirststageofthecolonialstageoftherawmaterialmarket.Fromthe1970stothe21stcenturyThefirsthalfofthecenturywasthesecondstageofthecolonialphaseoftherawmaterialmarket.Thesocialformofthecolonialsystemwasaneconomiccolonialformaimedatobtainingrawmaterialsandmarketsbasedontheinternationalunequaldivisionoflabor.

Ideology

Thepoliticalideologiesthatagreewithcapitalismincludethefollowing:

Liberalismisconsistentwithclassicalliberalism,emphasizingThecapitalistmarketeconomyminimizesstateintervention.Libertariansofpettygovernmentbelievethatthesoleroleofgovernmentineconomicactivitiesistoprotecttherightsofparticipantsandpreventviolence,theft,anddestructionsuchaspollution.Becauseofthewidespreaduseofthisterm,notevery"liberal"politicalpartysupportslaissez-fairecapitalism.However,mostliberalpartiesinthe20thcenturyhavemaintainedcapitalismastheirmaingoalandfreetradeastheirmaineconomicplan.

Conservatismvariesaccordingtothedifferentcircumstancesofeachcountry.InWesterncountries,conservatismusuallyagreestomaintainthecurrentcapitalistsystem.Butmanypeoplewhocallthemselvesconservatismpoliticallyarecalledmercantilismeconomically.

Objectivism,aphilosophicaltheoryadvocatedbyAnnRand,arguesthatintermsofpersonalmorality,capitalismistheonlymoraleconomicsystem,becauseifthereisnoinalienable,rationalfreeman,Capitalismcannotexist.

Someideologiesbelievethatcapitalismisactuallyamixedeconomicform,includingcapitalismandstate-ownedfactors.

Merchantismfavorstheestablishmentofanalmostcompletelyfreemarketinthecountry,butsuggeststhatthestatecontinuetointervenetoprotectdomesticcommerceandindustryagainstforeigncompetition.

Capitalism(2photos)

Socialdemocracyandsocialliberalismsupportawiderangeofgovernmentregulationsandpartialgovernmentintervention.Oneconomicissues,socialdemocratsaresomewherebetweensocialismandclassicalliberals.Theybelievethatthegovernmentneedstoregulateemployment,tradeandlabor,andsometimesagreetonationalizecertainindustries.(SeeWelfareState,PoliticalLiberalism.)

Reproduction

Proponentsandcriticsagreethatcapitalismhasthefollowingcharacteristics:privatesector,privateownership,freeenterprise,profit,wealthinequalityDistribution,competition,self-organization,theexistenceofmarkets(includinglabormarkets),andthepursuitofprivateinterests.

Asforthemassivegovernmentinterventionintheeconomy—includingthestate-controlledownershipofproductiontools—aneconomicsystemthatmixessomefreemarketcharacteristicsisusuallycalledamixedeconomy,notcapitalism[3].Ifthedegreeofgovernmentinterventionismuchhigherthantheprivatedecision-makingpart,thenthiskindofeconomyiscalledcentralization.Somepeople,suchasMiltonFleming,opposeanygovernmentinterventionintheeconomy.Accordingtosomedefinitions,alldevelopedcountriesbelongtoacapitalistsystem,oramixedeconomicsystembasedoncapitalism.Somepeoplethinkthatthewholeworldhasbeenintegratedintoaglobalizedcapitalistsystem,andeventhosecountriesthatstillrejectcapitalismareoperatinginaglobalcapitalisteconomy.

Privateownership

Thenecessaryfeatureofcapitalismistoestablishandprotectprivateproperty,especiallytheprivateownershipofthemeansofproduction.Privatepropertyrightsexistedintheearlylegalsystem,suchasancientRome,butitwasmoredifficulttoprotecttheserights,becausetherewasnopoliceinRomeatthattime.Romeandsomeearlysystemsoftenforcedtheweaktopaytopowerfulasylumsornoblesinexchangeforprotection.

Proponentsarguethatasolidpropertyandlegalsystemenablecapitalismtopromote:

1. Maximumindependence;

2. Clearerandmorecertainownership;

3. Unifyandintegratenationalpropertyregulationsandpropertyinformation;

4. Improvetrustbypunishingfraudulentactsintrade;

5. Withmoreformalandcomplexwrittenownershipcontracts,itwillbeeasiertosharetheriskandthecompany’sOwnership;

6. Withmoreloanguaranteeprojects,newinvestmentplanswillmakeiteasiertoborrowfunds;

7. MoreItiseasytoobtainmorecrediblecredithistoryandpropertyvalueinformation;

8. Strengthenthesubstitution,standardization,andportabilityofthepropertyownershipcontractdocuments,andprovideanationalAsexualmarketstructurepavesthewayandmakesiteasierforindividualsandcorporateentitiestotransferproperty.Andallofthesecanpromoteeconomicgrowth.

Comparedwithsocialism,capitalisminsistsonthepersonalownershipofprivateproperty,especiallytheprivateownershipofproductiontools.Proponentsofcapitalismoftenemphasizethattheproductivityoftheeconomycanbemaximizedwhenthetoolsofproductionarenotcontrolledbythegovernment.LudwigvonMisesarguedthat"inhistory,thedegreeofprivatizationofproductiontoolsisconsistentwiththeevolutionofhumanbeingsfromanimalconditionstothedevelopmentofmoderncivilization."Inmoderntimes,moreorlesspartoftheproductiontoolsineverycountryareownedbythegovernment,butonlyaneconomicsystemwheremostoftheownershipisprivatelyownedcanitberegardedascapitalism.

PrivateEnterprise

Inacapitalisteconomy,mostoftheproductioncapacityisownedbycompanieswhosegoalistopursueprofit.Thisincludesorganizationsthatexistedintheearlyeconomicsystemsuchassoleproprietorshipsandpartnerships.Non-interestorganizationsinthecapitalistsystemincludecooperatives,mutualdepositcooperatives,andcommunes.

Themoreuniqueorganizationofthecapitalistsystemisalegalperson,whichcanbeusedforprofitandnon-profitpurposes.Thiskindofentitycanbearlegalresponsibilitylikenaturalpersonsinlaw,whichalsocreatesuniqueadvantagesforthecompany'sshareholders,sothatshareholdersonlyhavetobearlimitedliability.

Specificformsoflegalpersonsareownedbyshareholders,andshareholdersbuyandselltheirstocksinthemarket.Stocksalsoconvertcompanyownershipintotradablecommodities—therightofownershipisdividedintounitsofstocks,makingthemeasiertobuyandsell.SuchstocktradefirstappearedinEuropeinthe17thcentury,andhasgraduallyexpandedanddevelopedsincethen.Whentheownershipofacompanyisdividedamongmanyshareholders,shareholderscanusuallyvotetoexercisetheirpowerwithinthecompanybasedonthesharestheyhold.

Onabroaderlevel,thecontrolofproductioncapacitybelongstothecompany’sshareholders.Withinthelimitsofthelawandthefinancialcapabilitiesofthecompany,eachcompany’sshareholderscandecidehowtousetheproductioncapacity.Inlargercompanies,thecompany’spowerstructureusuallyhasahierarchyormanagementbureaucracy.

Itisimportantthattheshareholdersofthecompanycanobtaintheprofitsorincomegeneratedbythecompany,sometimesthroughthesharedividendsystem,andsometimesthroughthesaleoftheirassetsatahigherprice.Stocksheld.Theycanalsoreinvesttheseprofitstofurtherexpandthecompany'sprofitsandvalue.Theycanalsosellthecompany,sellallequipment,land,andotherassets,andsharetheproceedsfromthesale.Theownershipofthesoldproductioncapacityisusuallythemaximumpriceorthepriceofthenetpresentvaluemethod,basedontheprofitthatthecompanycangenerateinthefuture.Therefore,theprofitstimuluswillpromptthecompany'sshareholderstoexercisetheirpowertopromotethecompany'sproductioncapacity.Differentshareholdersalsohavedifferentdegreesofthisstimulus-somewillselltheratiotheyhold,andsomewilltrytoincreasethevaluetheyhold.Inanycase,thiskindofprofitstimulusalwaysexists,andmanypeoplealsoregarditasthemainfactorfortheprosperityandgrowthofthecapitalisteconomy.Atthesametime,criticsofcapitalismbelievethatthiskindofprofittocorporateshareholdersistoogreatandallowsshareholderstolegitimatelyobtaintheincomeoflaborproduction.Somepeoplebelievethatthiskindofprofitstimuluscanonlyencourageshareholderstocreateprofits—notnecessarilyWillhaveapositiveimpactonsociety.Somepeoplepointedoutthatinordertomakeaprofit,shareholdersmustmeettheneedsofotherstomakethemwillingtopay.Moreover,althoughnon-profitorganizationsandcommunescanalsolegallyproduceinthecapitalistsystem,peopleusuallytendtobuyproductsandservicesproducedbyprofit-seekingcompanies.

Whenacompanyisfounded,theoriginalownerusuallyprovidessomemoney(capital)tobuyorborrowsomeproductiontools.Forexample,thecompanywillfirstbuyorborrowapieceoflandorahouse,buymachineryandhirelabor(labor),orthecapitalistwillprovidelaboronitsown.Theproductsproducedbylaborbecomethepropertyofthecapitalist(heretheterm"capitalist"referstothepersonwhoownscapital,notthepersonwhosupportscapitalism)andthelaborsellstheproductforthecapitalist,orthecapitalistsellsithimself,andsellstheproceeds.Thecapitalalsobelongstothecapitalists.Capitalistspaylaborandothercoststolaborers,andkeeptheremainingfundsasprofits.Theseprofitscanbeusedinmanyways.Capitalistscanconsumethem,orinvestthemfurtherintheresearchanddevelopmentofnewproductsornewtechnologies,orexpandtheirbusinessterritoryinordertopursuemoreprofits.Ifmorefundsareneededtoexpandtheirbusiness,capitalistswillborrowfundsfromothersandrepaytheprincipalandinterestwithcreditguarantees.

PrivateProfit

AynRand’sobjectivistphilosophybelievesthatthemoralgoalinaperson’slifeistopursuepersonalinterests.

Personalpursuitofself-interestisanindispensableelementofcapitalism.Insuchaneconomicsystem,"ownersoflandandcapital,aswellasthelaborerstheyemploy,canfreelyusetheirresourcesandlaborforproductioninpursuitofmaximumprofit."ManytheoristssuchasAdamSiMiheAynRandbelievesthattheindividual'spursuitofself-interestcanmaketheentiresocietyricher.AdamSmithiswidelyregardedasthefatherofcapitalism.Hebelievesthatself-interestedbehaviorismuchmoreefficientthanaltruismthatclaimstoservethe"publicinterest":

"Bypursuinghispersonalinterests,Onepersonwillbeabletopromotethissocietymoreeffectively.Ihaveneverseenhowmanygoodthingsareachievedbythosewhointerveneintradeforthe"publicinterest".(TheWealthofNations)"

·Randisperhapsthemostfranklysupporterofthepursuitofpersonalinterestsincapitalism.ShewroteinCapitalism:TheUnknownIdeal:

"America’swealthisnotmadebythosewhosacrificeforthepublicinterest.Itiscreatedbythosetalentedandfreepeoplewhoareproductiveandproductiveinpursuitoftheirowninterestsandprivatewealth."

TheNobelPrize-winningeconomistMiltonFlemingalsosupportedcapitalism.Theimportanceofpursuingpersonalinterestshere.Hearguedthatthecompanydoesnothavetheso-calledsocialresponsibility,andtheonlyresponsibilityistoincreaseprofitsforshareholders,aslongasitdoesnotusefraudintheprocess.Headvocatedthatwhilethecompanyispursuingitsprofits,aslongasitdoesnotusefraudanddeception,itcanbringbenefitstothesociety.Flemingdoesnotadvocatethatthecompanyshouldnotassistthesocialcommunity,butratherthataslongasthecompanyinvestsinalong-termbusiness,theywill"contributeresourcestothefacilitiesofthesocialcommunity..."inorderto"enhancegoodwill."Itsprofit.Otherproponentsofcapitalismareopposedtofocusingonself-interest.Forexample,JohnMackey,CEOofWholeFoodsMarketintheUnitedStates,saidinanarticleinReasonmagazinethatservingcustomersandsocietycomesfrom"love"ratherthanself-interest.(Rethinkingthesocialresponsibilityofbusiness,ReasonMagazine,October2005).

Achievingself-interestthroughthepursuitofprofitisanecessaryfeatureofcapitalism.Profitsareobtainedbysellingproductshigherthantheirproductioncosts.Somepeoplethinkthatthepursuitofprofitistheessenceofcapitalism.SociologistandeconomistMaxWeberarguedthat“capitalismisthesameasthepursuitofprofit,carriedoutbydeliberateandrationalcapitalists.”However,thatisnotauniquefeatureofcapitalism.Thesocietyofancienthunter-gatherersTherearealsobenefitsofexchangeandtrade.Incapitalism,profitisanecessaryconditionforeconomicgrowth,andtheprofitpartofthegrowthisinvestedagaininsteadofbeingconsumed.

Freemarket

Capitalism(2photos)

Theconceptof"freemarket"liesinalltheeconomyformoney,products,andservicesDecisionsarebasedonvoluntariness,freefromcoercionandfraud,whichisseenasanecessaryfeatureofcapitalism.Someothereconomicsystemspreventindividualsfromowningproductiontools(includingprofits)orforcethemtobeshared.Atthesametime,someeconomicdecisionsarealsoaffectedbycoercion,whichcannotberegardedasafreemarket.Inanidealfreemarketsystem,alleconomicdecisionscannotbeforciblyinfluenced.Instead,theyaredeterminedbymutualtrade,negotiation,cooperation,andcompetitionamongindividuals.Inafreemarket,thegovernmentmayplayaprotectiveroletopreventmarketparticipantsfromusingcoerciveforces,butwillnotactivelyintervene;thissituationiscalledlaissez-faire.However,somepeoplearguethatcapitalismcancoexistwithauthoritariangovernments,orthatafreemarketcanexistwithoutcapitalism(seesocialistmarketeconomy).

Alegalsystemwillrecognizeandprotectpropertyrightsandprovidepropertyownerswiththerighttofreelyselltheirproperty;ifnoonewantstobuyit,theyalsohavetherighttocontinuetoownit.Accordingtothestandardtheoryofcapitalism,asAdamSmitharguedinTheWealthofNations,whenindividualstrade,theyusuallypaymoreattentiontothevalueoftheproductthanthepricetheypayforit.Iftheproductdoesnothavethatvalue,thentheywillnottradeandkeepthingsthattheyassessashighervalue.Thisconceptalsoshowsthatinthetrade,bothpartieshaveassessedthattheywillprofitfromthis.

Inthefreemarket,thepricesofproductsandservicesaredeterminedbypriceagreementsbetweenbuyersandsellers,ratherthanspecifiedbythegovernment.Thispriceisthepriceatwhichbuyersarewillingtopayforthepurchaseofgoodsandthepriceatwhichsellersarewillingtoselltheirgoods.Itisdirectlydeterminedbysupplyanddemand(andtheamountoftrade).Inanabstractconcept,thepriceisdeterminedbythebalancepointofthearcofsupplyanddemand,whichrepresentsthepriceatwhichbuyerswillbewillingtobuy(andsellersarewillingtosell)aspecificquantityofproducts.Thepriceattheequilibriumpointwillleadtoexcessivesupply,andthepriceattheequilibriumpointwillleadtoanincreaseindemand.Whenthepricethatthebuyeriswillingtopayisthesameasthepricethattheselleriswillingtosell,thetradeproceedsandthepriceisdeterminedaccordingly.

However,noteveryonebelievesthatafreemarketisagoodthing.Thereasonthatisoftenusedtojustifygovernmentinterventioninthemarketistheso-called"marketfailure."Marketfailurereferstosituationsinwhichthemarketcannoteffectivelyprovideorallocateresourcesandservices(forexample,whenthemarketdoesnotdistributematerialsaccordingtocertainpeople'sidealconditions,themarketisoftenaccusedofunderminingmoralityorsocialequity).Somepeoplebelievethatifthefreemarketlacks"perfectintelligence"and"perfectcompetition,"thenthegovernmentshouldinterveneinthis(seeperfectcompetition).Commonlycitedmarketfailurephenomenaalsoincludemonopoly,monopolyofmarketinformationsources(suchasinsidertrading),orpricefraud.Wagesdeterminedthroughfreemarketmechanismsareoftencriticizedforcausingimbalancesinincomedistribution.Anothercriticismofthefreemarketistheissueofexternalities.Externalitiescancausethebehaviorofonesideofthemarkettonegativelyorpositivelyaffectotherswithoutbeingnoticed.Themostfrequentlycitedexampleofexternalityispollution.Onthewhole,thefreemarket’sperformanceindistributingmaterialsinareassuchashealthcare,unemployment,wealthinequality,andeducationisoftencriticizedasamarketfailure.Atthesametime,manygovernmentsthatareregardedascapitalistsystemsalsoimposepricecontrolsinthemarket,thusinterferingwiththemechanismsofthefreemarket.Thisusuallyoccursintimesofeconomiccrisis,orinsomeareasofproductsandservicesthatareconsideredtobestrategicallyimportant-forexample,thepowerindustryisheavilyregulatedbythegovernmentinmanycountries.Manywell-knowneconomistshavealsoanalyzedmarketfailuresandarguedthatthegovernmentshouldindeedundertaketheworkofbalancingthesemarketfailures,suchasthroughmarketcontrolandsubsidyprograms.

However,othereconomists,suchasNobelLaureateMiltonFletcherandeconomistsoftheAustrianSchoolofEconomics,stronglyopposegovernmentinterventioninthefreemarket.Theyadvocatedthatthegovernment'sroleintheeconomyshouldberestrictedandthat"marketfailure"shouldnotbeusedasanexcusetointerferewitheconomicfreedom.Theybelievethatmarketfailureisnothingmorethanawrongconcept,whichisusedbymanytojustifythepoliticalbehaviorofthegovernmenttoimposecompulsiveintervention—forexample,thegoalofegalitarianism.Theseeconomistsbelievethatthegovernment'sinterventionwillnotonlysolvetheproblem,butwillcausemoretroubles,andevenresultincompletelyoppositeresultsfromtheoriginalgoaloftheseinterventions.Theselaissez-faireeconomistsarenotopposedtomonopoliesunlesstheyareachievedthroughcompulsorymeanstoavoidcompetition(seeforcedmonopoly).Theyalsopointoutthathistoricalmonopoliesareoftencausedbygovernmentintervention.Notbecauseoflackofintervention.Theyarguethattheminimumwagelawwillonlycauseunnecessaryunemployment,whilethelawthatbansinsidertradingwillreducethetransparencyandefficiencyofthemarket,andthepricecontrolimposedbythegovernmentwillcauseashortageofproductsandservices.Theseeconomistsareusuallybasedonpracticaltheory,buttherearealsomanypeoplewhosupportcapitalismfromamoralstandpoint.Forexample,AynRandsaidthatcapitalismistheonlyeconomicsystemwithmorallegitimacy.

Althoughtheyareusuallyheavilyregulated,financialmarketscanprovidelarge-scale,standardized,andsimplertradedebt,internationalexchangerates,andownershipofcompanies.Therewillbesimilarchangesintheproductionofagriculture,mining,andenergy.

Marketshavealwaysexistedinhumanhistory.Duringthehunter-gatheringperiod,peopleusuallybarterfortheirgoods.Theadventofcurrencymadeexchangeseasier,andalsoallowedthemedievalcommodityfairstoflourish.However,eachsociety(differenttimeandplace)hasitsownviewsontheappropriatenessofproducttrade,andthereforesometimesrestrictsproductionandspecificproducttransactions:ifitisnotbecauseofsuchrestrictionstoachieveothergoals-forexampleStabilizingthepositionoflocalnobles/samurais/chiefsisbecausetheconceptthatcertainproductscanbetradediswrong.Thesealsohindertherealfreemarket.

Eveninthemoderneconomy,thegovernmentdoesnotallowthemarkettooperatefreelyinmanyareas;however,comparedwiththeexampleoftheprivilegesgrantedtotradeassociationsintheMiddleAges,therestrictionsonpriceshavebeenquiteloose.Mosteconomieshaveamixtureoffreemarketandnon-marketsystems.Somepeoplebelievethatcapitalismisnotnecessarilythesameasafreemarket.Theyarguethatcertainelementsofthecapitalisteconomyorpropertyrightswillhinderfreedomintrade.Otherscompletelyrejecttheconceptof"freemarket"andarguethatfreemarketisExploitative,ornonexistent.Forexample,somepeoplebelievethatwagesdeterminedthroughthefreemarketratherthanthegovernmentareexploitative,claimingthattheydepriveworkersofalltheirrightstoproductsandcanonlyacceptlowwagestoearnfoodandclothing.However,economistspointoutthatwagereductionislikedeflationinthemarket:whenthepriceoflabordrops,itsimplymeansthatthedemandforthiskindoflaborinthemarkethasdecreased,orthatitisthesupplyofthiskindoflabor.Toomuch,soitcausedtheaveragepricetofall.

Economicgrowth

Oneofthemaingoalsofasocialsystemwithtradeandpropertyasthecoreroleistopromotethegrowthofcapital.ThestandardmethodofmeasuringgrowthisthegrossdomesticproductcalledGDP,thecapacityutilizationrate(Capacityutilization),andthestandardofliving.

InAdamSmith’sproposition,theabilityofacapitalisteconomytomaintainandimproveitsstoredcapitalisthefocusofthefreemarketinsettingproduction,prices,andresourceallocation.Itisgenerallybelievedthatbeforetheindustrialrevolutionandtheemergenceofthemoderncapitaleconomy,thetotaldomesticproductionofallcountriesintheworldwasquitelowanditsgrowthwasrelativelyslow.Afterthat,thecapitalistcountriesgrewveryrapidly[7][8].BeforetheIndustrialRevolution,somecountrieshadthecharacteristicsofmoderncapitalismandhadarelativelyhigherstandardofliving.ThesecountriesincludeancientGreekcivilizationinthe4thcentury,ItalyinRomeinthe1stcentury,andNorthernEuropeinthe15thcentury.Italy.TheNetherlandsinthe17thcenturyisalsoagoodexample.Atthattime,thepercapitaincomeoftheNetherlandswasmuchgreaterthanthatofallothercountries.ItalsoreachedthestandardoflivinginEnglandinthe18thcentury,butitdidnotachievetheindustrialrevolutionlikeEngland.

ItisgenerallybelievedthathigherGDPpercapitaincomecanimprovethestandardofliving,includingsatisfyingorimprovingfood,housing,clothing,medicalcare,reducingworkinghoursandfreeingtheelderlyfromlabor.NoneofthesecanbeachievedwhenGDPistoolow.

However,economicgrowthisnotgenerallyregardedaspositive.Thenegativeimpactofthisgrowthiscalled"externalizationofcosts"(seeexternalities)byeconomists.Amongotherthings,Theseeffectsincludepollution,thedestructionoftraditionallifestylesandcultures,thespreadofdiseases,andthetriggeringofwarsforresourceormarketcontact.Andproducedthelowerclass.Indefendingcapitalism,theliberalphilosopherIsaiahBerlinarguedthatthesenegativeproblemsarenotuniquetocapitalism,noraretheyinevitableconsequencesofcapitalism.

The"growth"ofanentrepreneur'seconomyandasocietyismarkedbyeconomicmobility,whichrepresentsalarge-scalechangeinthesocial-economicstructure.Thiskindofchangeisquiteobviousintheincomeandwealthgapsbetweenpopulations,andithasalsodrasticallychangedthetrueearningpowerofapersoninhislifetime.Instandardeconomics,capitalismprovidesindividualswithmoreopportunitiestoengageinnewindustriesorbusinessventures,givingindividualstheopportunitytogetrichfaster.Comparedwiththisunstableeconomicstructure,thefeudalsystemandtribalsocietyhavearelativelystablewealthrelationship.Ontheotherhand,anegalitariansocialistsocietydistributesmorewealthforsocialbenefits,andthereforereducesthemobilityofincome,especiallyforthosewhohavecapitalandwanttotradewithit.

However,largechangesinincomedonotnecessarilyrepresentincomemobility—somepeoplereceivesalaryregularly,andsalaryincreaseswiththenumberofyearsofwork,andtheyretirewhentheyareold.ThischangeisinessenceTheabovedoesnotnecessarilymean"liquidity".Inaddition,manylaboreconomistsarguethatwageinstabilityrepresentsthetransferofrisktolabor—especiallyinspecificfieldssuchasagriculturallabor,sothatownersofcapitalcanavoidrisks.

Self-organization

Theproponentsofcapitalismpointoutthatsuchaneconomicsystemcanorganizeitselfintoacomplexsystemwithoutexternalguidanceorplanningmechanisms.Thisphenomenoniscalled"self-organization".NobellaureateFriedrichHayekcoinedtheterm"catallaxy",whichmeansamarketthathasa"spontaneousorder"wherethereisnocentrallycontrolled(government)institutionthatcanpreventindividualsfrompursuingtheirgoals.Decide.However,inmostmoderneconomies,thestateguidesacertaindegreeofcentraleconomicplanning(suchassettingabasicinterestratebythecentralbankofthecountry),whichonthesurfaceseemstobeanattempttoincreaseeconomicefficiency,reducethevariabilityofeconomiccycles,andpromoteSpecificsocialgoals,buteventheselimitedcontrolswillcauseproblems,becauseitisextremelydifficulttopredictthestateoftheeconomyinjustoneortwoyearsinthefuture.NobelLaureateMiltonFryminarguedthattheGreatDepressionwascausedbythewrongpoliciesoftheFederalReserveSystem.

Someeconomistsusechaostheorytoarguethatitisimpossibletopredictlong-termeconomicdevelopment.Theirviewsdistractedfromtheessenceofeconomicplanninganddevelopedintooneoftheimportantforcesincapitalism,claimingthatcapitalismallowsvarioussolutionstobetried,andreal-worldcompetitioncanusuallyfindgoodsolutionstoemergingproblems.Thesetheoriesopposethemethodofoperatingsocietyundercentralplanninginaplannedeconomy,whichusuallychoosesthewrongsolutionbecauseofwrongpredictions.ApossibleexampleistheexperienceofSomalia.Thetelecommunicationsindustry,whichwasoriginallytightlyregulated,developed"prosperous"afterthegovernmentcollapsed.Accordingtoreports,thisprosperitywasduetothelackofagovernment.

AncientRome(especiallyfromthelateRepublictotheearlyempire)andSongDynastyChinahavesomecapitalistcharacteristics:nofeudalfiefdom,(weak)propertyrights,someeconomicgrowth,andcomparableadvancedtechnology.Manydebatesalsofocusonwhythesesocietiesfailedtoproducetheir"industrialrevolution"toachievemodernindustrialcapitalism.Somearguethatthesecountrieshaveformedmonopoliesintheirregionsandlackcompetitionwithothercountries.Asaresult,therulingclassbegantobecomecomplacent,andtheoriginallysmoothsystemwasreversedtoenrichcertaininterestgroups.Manynewtechnologicalinventionshaveappearedinmanysmallcountriesinhistory,suchasinancientGreeceandRenaissanceItaly,whenthesecountriesandcitieswerethemostadvancedregionsintheworld.

Defects

Basiccontradictionofcapitalism

_{Mainarticle:Basiccontradictionofcapitalism}

Thebasiccontradictionofcapitalismisthesocializationofproductionandtheprivateownershipofcapitalistmeansofproduction.Thespecificmanifestationsare:

Inconsumption,thetrendofunlimitedexpansionofproductionandtherelativereductionofthepurchasingpoweroftheworkingpeoplearecontradictory;

Inproduction,theorganizationofproductioninindividualenterprisesisrelatedtotheentiresociety.Thecontradictionoftheanarchyofproduction;

Intermsofclassrelations,thecontradictionbetweenthebourgeoisieandtheproletariat.

Thereallimitationofcapitalistproductioniscapitalitself.Thismeansthatcapitalanditsself-proliferationaremanifestedasthestartingpointandendofproduction,asthemotiveandpurposeofproduction.Productionisjustproductionforcapital.

Exploitationandalienation

Thereisexploitationincapitalism.Thevalueofeachcommodityisdeterminedbytheamountoflabormaterializedinitsusevalue,andisdeterminedbythesociallynecessarylabortimefortheproductionofthecommodity.Capitalistsoccupylaborers'productionsurplusbyvirtueoftheirownershipofthemeansofproduction.

Alienationismainlypresentedinthreeaspects.Thealienationoflaborersandcommodities.Theproductscreatedbythelaborersareoccupiedbythecapitalistsandbecomethecapitalforthecapitaliststofurtherenslavthelaborers.Thealienationofproductionbehaviorandproductionactivities.Laborisnolongerakindofself-recognitionandself-satisfaction,buthasbecomeaburdenoflivelihood.Thealienationoftherelationshipbetweenpeople.Capitalbecomesthestandardbywhicheverythingismeasured.Theproductsproducedbysocietyincirculationanddistributionhighlightnottheirownusevalue,buttheirvalueasacommoditythatallowscapitaltogainprofits.Capitalistsaremanipulatedbyalienatedcapital,whichisthepersonificationofcapital,andthedecisionstheymakearefortheappreciationofcapital.

Cyclicaleconomiccrisis

_{Mainarticle:cyclicalcrisis}

Thegeneralperformanceofeconomiccrisisis:Alargebacklogofcommodities,asharpdeclineinproduction,alargenumberoffactoryclosures,massiveunemploymentofworkers,severedamagetocreditrelations,andtheentiresocialeconomyhasfallenintoextremechaosandparalysis.

Undercapitalism,duetoitsbasiccontradictions,whilecapitalistsexpandproduction,thepurchasingpowerofthepeopleisdeclining.Withthedevelopmentofproductivity,generalprofitmarginswillgraduallydeclineforcommodities.Inordertocombatthistrendandobtainmoreprofits,capitalistswilladoptmeasuressuchasincreasingthedegreeoflaborexploitationandloweringwages,whichmakesthepurchasingpowerofthepeopledecline.Therefore,theincomeoflaborerswhoaccountforthevastmajorityofthepopulationcannotbuybackalltheproductstheyproduce.Commoditiescannotachieve"thrillingjumps"underthemarketeconomy,and"relativeoverproduction"willeventuallyerupt.financialcrisis.

Inthecrisis,thecontradictionbetweensocializedproductionandprivateownershipofthemeansofproductionreachedapointwhereitbrokeoutviolently.Commoditycirculationistemporarilysuspended;themeansofcirculation,namelycurrency,becomesanobstacletocirculation;allthelawsofcommodityproductionandcommoditycirculationarereversed.Theeconomicconflicthasreacheditsculmination:Themodeofproductionrisesagainstthemodeofexchange.

Attheendofthecrisis,inordertorebalanceproductionandconsumption,alargeamountofwealthneedstobedestroyedontheonehand,andalargeamountofpoverty(unemployment)isgeneratedontheother,andthenanewcyclebegins.

Developmentdirection

Intheconceptoffreemarket,manypeoplethinkthatlesstaxation,smallergovernmentsizeandlessgovernmentcontrolarethemorecapitalisteconomysystem.Ifgovernmentexpenditureisusedasthestandardforcalculatinggovernmentsize,theninthepastcentury,governmentsinWesterncountrieshaveexperiencedhugescaleexpansion.U.S.governmentspendinghascontinuouslyjumpedfrom3-4%ofGDPto33%inthepastcentury,anditdidn'tstopgrowinguntil1983whenPresidentReaganwasinoffice.Theaveragegovernmentexpenditureof16industrialcountriesjumpedfrom8%ofGDPto45%.IntheUnitedStates,governmentnon-defenseexpenditureincreasedfrom11.5%in1945to30%in1983,andhasremainedstablesincethenuntil2003(somecalculationsexcludedefenseexpenditurefromgovernmentexpenditure).Therearealsomoreandmoreregulations.Therefore,somepeoplebelievethatthedegreeofcapitalismhasdroppedsignificantlyinWesterncountries.However,sincethestabilizationofnon-defenseexpendituresintheUnitedStatesin1983,someeconomistsFlemingalsoexpressedthehopethatthistrendcanbereversedandtowardsamorecapitalistdirection.Greenspan,theformerchairmanoftheFederalReserveBoard,saidinaspeechin2005thathebelievedthat"freemarketcapitalism"hadgraduallyrecoveredthroughthederegulationofbusinessafterthelong-termcontrolbroughtaboutbyKeynesianism..

OneoftheexplanationsisthatWesterncountrieshavegraduallyavoidedregulatingvariousmarketfailuressuchaspollution,healthcare,unemployment,wealthinequality,andeducation.However,thosewhosupportlessstateregulation,suchaslibertarians,neoliberals,andeconomicconservatives,willstillarguethatgovernmentregulationrestrictseconomiccompetitionandtaxflowstohavethemostpoliticalinfluence.Thegovernment’sefficiencyisnotashighasthatofprivateinstitutions,andmarketfailuresarecausedbygovernmentregulation-suchasminimumwages,publicschools,andsoon.

Atypicalcountry

France

AtthebeginningoftheFrenchRevolution,thebigbourgeoisieincludedtaxholders,armssuppliers,andimportantshareholdersofnationalchartercompanies.Theyareinextricablylinkedwiththefeudalautocraticsystem.Thesepeopleareunwillingtooverthrowthefeudalautocraticsystem.Theyonlyhopetorestrictthepowerofthemonarchthroughreforms,improvetheirpoliticalstatusandeliminatesomeoftheevilsoftheoldsystem.Generallyspeaking,thebigbourgeoisieisthebourgeoisiethatnotonlyholdsstrongeconomicpowerbutalsocontrolspartofthepoliticalpower.Incolonialandsemi-colonialcountries,thebigbourgeoisieoftenstartedasa"comrador."Theterm"comprador"isderivedfromthetransliterationofthePortugueseComprador.Itreferstomiddlemenandmanagerswhoserveforeigncapitalistsinthedomesticmarketincolonialandsemi-colonialcountries.Theyarecloselyrelatedtothefeudalrulingclassandforeigncapitalism.Andthroughthesaleofnationalinterests,averylargeeconomicandpoliticalpowerwasaccumulated,andeventuallydevelopedintoabureaucraticbourgeoisie,suchasthefourmajorfamiliesinChina.

InFrance,themiddlebourgeoisieincludesartisanworkshopowners,middle-levelmerchants,andmariners.Theyhavestrongeconomicpower,uselargemachinestoproduce,andproducelarge-scaleproduction,andtheyexploitworkerstoadeepdegree.However,theyhavenoconnectionwithpoliticalrights,theirowninterestsareoftennotguaranteed,andproductionishinderedbyfeudalrulersandcontrolledbythebigbourgeoisie.Therefore,theyrealizethatthefeudalsystemisanobstacletotheirowndevelopmentandpoliticallydemandthecompleteabolitionoffeudallandrelations.,Theestablishmentofbourgeoisdemocraticpolitics.Insemi-colonialandsemi-feudalChina,themiddlebourgeoisieisthenationalbourgeoisie,suchastheearlycapitalistsChenQiyuanandZhuQiang.Theystartedwithdifficultyinproduction,andwereoppressedandrestrainedbyforeigncapitalismandtheirownfeudalforces.Infulfillingthetaskofanti-imperialistandanti-feudalstruggle,theybelongtotherevolutionaryclass,buttherearetwosidestotherevolution.Afterliberation,throughsocialisttransformation,thisclasswastransformedintosocialistlaborers.

Thepettybourgeoisieistheso-calledcitizenclass,commonlyknownaspettycitizens.Thisclassincludessmallbusinessmenandsmallworkshopowners.Mostofthemparticipateinlaborandareindependentoperators.Fromtheperspectiveofexploitation,theymainlyrelyontheirownlabororonlyslightlyexploitothers.Therefore,thepettybourgeoisieisaspecialsocialclass,andsomepeoplethinkthattheydonotbelongtothebourgeoisie.Buttheyhavecertainassetsandhopetoexpandtheirindustriesthroughthedevelopmentofcapitalism.Becausetheywerehinderedbythefeudalsystemintheiroperations,theyandotherbourgeoisiehavecommoninterestsandrequirementsinpolitics,thatis,theydemandtheoverthrowoffeudalautocraticruleandtheestablishmentofdemocraticpolitics.Inaddition,theyarestillsubjecttothebigbourgeoisieinproduction,sotheyhavemoreurgentdemandsfordemocraticpolitics.

Germany

InGermany,thereisalsoabourgeoisiewithaspecialstatus-the"Junkerbourgeoisie".JunkerisatransliterationofGermanJunker,derivedfromJungherr,meaning"sonofthelandlord"or"littlemaster".TheJunkerbourgeoisieoriginatedfromthearistocraticlandlordclassofPrussia.Sincethe16thcentury,thesenoblelandlordshavemonopolizedmilitaryandpoliticalpositionsforalongtime,andhaveheldtheleadershipofthecountry.Capitalismbeganinthemid-19thcenturyandbecameasemi-feudalaristocraticlandlord.Sincetheynotonlypossesseconomicpower,butalsocontrolpoliticalpower,theyshouldbelongtothebigbourgeoisie.InordertodevelopcapitalismandmeettheneedsofexternalexpansioninthestateofGermanybeingdivided,theyadvocatedendingthestateofseparatismandbecomingtheleadingforceintheprocessofGermanunification.