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Published by the_kula

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Published by: the_kula on Apr 14, 2010
Copyright:Attribution Non-commercial


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CAPITALISMDefinition:Capitalism is a mere political catchword.Marx: Capitalism as a mode of production where the means of  production are owned by capitalists who form a distinctiveeconomic class.A distinction between the owners of capital and workers withcapital.Features of Capitalism:1.Private property and ownership.Private enterprise economy.The right of an individual to acquire, lease and dispose of something of economic value in any legitimate way the owner wishes and the right to enjoy the economic rewards the result.Property may be tangible or intangible.It is not unrestricted.It includes inheritance.It provides incentive to save and invest.2.Consumer’s sovereignty: Consumer can buy goods of his choiceconsumer is the king. The producer produces the goods theconsumer chooses. His purchases are like money ballot.3.Freedom of enterprises.Freedom of saving and investment.Freedom to choose one’s occupation.As entrepreneur, he undertakes risk.
4.Existence of competition.Free market economy.Price is determined by market forces.Price remains at the equilibrium level.Price indicates the commodities to be produced providesincentive.Competition among producers, consumers, and factors of  production.Competition presumes – perfect knowledge.Prefect mobility.5.Self-interest and profit motive. One is the best judge for himself.6.Harmony between social interest and individual interest.7.laissez – faire
Feudalism – Prior to the 16
Feudalism was considered a self- sufficient economy.
The producers were the subjects of the Feudal lord.
They had no ownership right over land they cultivated.
They were not free.
The producer was made to fulfill the economic demands of theLord in the form of fee services, payments in money or kind,gifts to the landlord.
There was no freedom of contract.The system died due to:
1.The system failed to produce enough to meet the growingrequirements.2.Emergence of exchange economy.Growth of Towns:
Towns had economic and political independence.
Markets developed
Dealings with money increased
Provided employment to the rural peopleSo people fled to towns due:a)Direct eviction b)Impoverishmentc)Rising population pressure
Towns and Cities became increasingly important.
Trade flourished between countries.
Discovery of gold.
Use of money expanded.
Growth of national states.
Economic rivalry between them to expand colonies andsphere of influence.
State regulated exploitation.
Production was on small-scale.
Merchants played an important role between producersand consumers.

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