Economic Systems Capitalism Essay - 1400 Words

Capitalism Capitalism is an economic system characterized by the private ownership of the means of production, and where production is guided and income distributed largely through the operation of markets. The objective of a capitalist society is to gain profit. Some of its strengths of living inside a Capitalistic economy are the incentive for innovation, efficiency, and economic growth. Unlike socialism, there are opportunities to invent new products for areas of demand, to raise quality, and to gain assets. One of the most recognized Capitalist economists after the Great Depression was John Maynard Keynes who advocated for the government intervention on behalf of Capitalism to provide an economic stimulus. He opposed the†¦show more content†¦Mainly in those who control the means of production. Therefore, if one of these, let alone both, cause a big enough gap in society then people figure Capitalism has failed them and it’s time to seek socialist medicine. However, one economist was convinced that Socialism was not the medicine, it was the disease. The great depression gave birth to the biggest opponent to Socialism, Nobel Prize-winning Austrian economist Friedrich Hayek, who believed in free-market capitalism without intervention from the Government. In his book, â€Å"Road to Serfdom† Hayek rejects socialism and central planning by arguing that â€Å"the economy is too complicated for politicians to avert recessions and unemployment without unintended consequences that may well be worse† (2011. Keith, Tamara), like the unintended creation of totalitarian regimes such as the one that existed in Nazi Germany. Although Hayek was a proclaimed Capitalist and contemporary to John M. Keynes, his views on the absolute separation between markets and government is what set them apart in their economic theories of Capitalism. PART III- CASE STUDY The Beginning of the Financial Crisis The financial crisis of 2008 was sparked by the bankruptcy of the US investment bank Lehman Brothers and the collapse of insurance giant AIG. According to authors Thomas Friedman and Michael Mandelbaum in their book, That Used To Be Us, the 2008 crisis wasShow MoreRelatedEconomic Systems, Capitalism And Socialism1829 Words   |  8 PagesEconomic Systems People can use economic systems to build empires and destroy civilizations. The society s featured in the books 1984 by George Orwell and Fahrenheit 451 by Ray Bradbury did just that. Both took advantage of some form of an economic system to achieve their respective goals. Whether it be the command economy of Oceania, or the overly consumerist economy of the dystopian United States, they both employed economics to their benefit. Economics is the science of scarcity. 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