Capitalism
Capitalism is a social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its result is the free-market.
Adam Smith - father of capitalism
Francis Quesnay -
Joseph Schumpeter - that capitalism can only be understood as an evolutionary process of continuous innovation and "creative destruction"
John Maynard Keynes
Origin
(13-16th century)
The underlying theme of capitalism is the use of wealth to create more wealth. The simplest form of this is lending money at interest, reviled in the Middle Ages as the sin of usury. At a more sophisticated level capitalism involves investing money in a project in return for a share of the profit.
In the Middle Ages the attitude of the church to usury means that capitalism has little chance of developing.
Italy and Netherlands - 13th century
Florence - 14th century
Banks
Characteristics
Rights and Freedom
Capitalism has a number of characteristics, and the first can be grouped under the category of personal freedom. Basic personal rights and freedoms are the foundation of capitalism. Individuals must have personal property rights for legal control over resources such as land, minerals, crops and currency -- whether those properties are inherited, traded, purchased or earned. In addition, individuals must have the right to engage in enterprise and make their own economic choices based on individual needs and desires.
Competitive Market
Capitalism requires a competitive market with many sellers offering comparable goods and services to potential buyers. Competition is a self-regulator of pricing for both buyers and sellers, driving companies to develop better products for consumer appeal. Capitalism is in itself nondiscriminatory. A few individuals may avoid businesses because of race, religion or social status, but the
Adam Smith - father of capitalism
Francis Quesnay -
Joseph Schumpeter - that capitalism can only be understood as an evolutionary process of continuous innovation and "creative destruction"
John Maynard Keynes
Origin
(13-16th century)
The underlying theme of capitalism is the use of wealth to create more wealth. The simplest form of this is lending money at interest, reviled in the Middle Ages as the sin of usury. At a more sophisticated level capitalism involves investing money in a project in return for a share of the profit.
In the Middle Ages the attitude of the church to usury means that capitalism has little chance of developing.
Italy and Netherlands - 13th century
Florence - 14th century
Banks
Characteristics
Rights and Freedom
Capitalism has a number of characteristics, and the first can be grouped under the category of personal freedom. Basic personal rights and freedoms are the foundation of capitalism. Individuals must have personal property rights for legal control over resources such as land, minerals, crops and currency -- whether those properties are inherited, traded, purchased or earned. In addition, individuals must have the right to engage in enterprise and make their own economic choices based on individual needs and desires.
Competitive Market
Capitalism requires a competitive market with many sellers offering comparable goods and services to potential buyers. Competition is a self-regulator of pricing for both buyers and sellers, driving companies to develop better products for consumer appeal. Capitalism is in itself nondiscriminatory. A few individuals may avoid businesses because of race, religion or social status, but the