DOWNLOAD HISTORY 2 STUDYING NOTE
Capitalism is a socio-economic system in which a
country’s factors of production like industries, land, trade and other sources
of capital and property are owned and controlled privately purposely for profit
making in a free market economy (with little government intervention).
Capitalism is also referred to as a free market
economy with a free competitive enterprise where prices of goods and services
are determined by the forces of demand and supply.
Note: The
cardinal bases of capitalism are: private ownership and control of factors of
production; the sole aim of production is for profit making and; little
government involvement in the control of the economy.
Capitalism first developed in Europe coming into
existence after the demise of feudalism. It passed through three main stages
namely, mercantile, competitive and monopoly phases.
Characteristics of capitalism
Capitalism operates through a number of ways:
a.
Free market economy
in which prices of goods and services are determined by the market
forces of demand and supply.
b.
Little government intervention as production is left in
the hands of capital owners.
c.
Private ownership of factors of production against
nationalization policy.
d.
Production is purposely for profit maximization.
e.
Existence of classes. There are two major classes: the
haves who are the Capitalists or Bourgeoisies who own the major means of
production (capital), and the class of the have-nots, who are mainly the
workers called proletariats exploited by the capitalists for profit
maximization.
f.
Exploitation, due to the presence of classes. The haves
exploit the have-nots through low wages purposely for profit making. The
principle of a capitalist here is to ensure low costs in production hut realize
maximum profits.
g.
Class struggle. The workers struggle against their
exploitation by their employers the capitalists. For instance through strikes
under Trade Unions.
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