Arguments On and Processes of Capitalist Reality

Jonna D. Pool

BUS 1301: Business Foundations

Dr. Lyn Pavel

November 15, 2022

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Summary of Chapter Eleven

Arguments Regarding Capitalist Reality

Those who advocate that capitalist reality is unfavorable and has always been so even

with the sabotage of the managing bourgeoisie, must procure evidence that this is so. The

opposing argument is that capitalist reality tends to favor maximum productive performance, but

monopolistic structures have killed that tendency. First, there was an age of perfect golden

competition that metamorphosed itself into monopolistic competition, however, Joseph A.

Sumpter claims that perfect competition is more of a reality in the present. Secondly, the rate of

output did not decrease from the nineties and the prevalence would have to be dated.

Capitalism and its processes

This is all a prerequisite to understanding the most important aspect: dealing with

capitalism is dealing with an evolutionary process. Capitalism is a form of economic change that

can never be stationary, and the fundamental impulse that keeps Capitalism in motion is new

goods, transportation, markets, and industrial organization. Opening up new markets, foreign or

domestic, illustrates the same process of industrial mutation, meaning the economic structure

from within destroys the old one and creates a new one.This results in creative destruction,

bearing a problem upon Capitalism in two ways. First, it is a process whose every element takes

considerable time in revealing its true nature, and we are forced to judge its performance over

time. Second, it is an organic process that every part must be analyzed, meaning it needs

clarification for the mechanism but may be inconclusive beyond that.

Critique of Joseph A. Sumpter

Argument on Capitalist Reality

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The first argument regarding capitalist reality states that it is unfavorable regardless of the

intervention of the bourgeoisie. Sumpter clarifies that if one were to understand capitalist reality

in this manner that they must procure certain evidence to do so. The bourgeoisie is a

philosophical political group of people who are an intermediate between the highest and middle

class. If the bourgeoisie is intervening in capitalist reality, it works in favor of Capitalism as a

whole. The bourgeoisie works in order to expand labor in their capital and use that labor and

employment to expand said capital and gain profit from it. Capitalism is an economic and

political system in which a country's trade and industry are controlled by private owners for

profit, rather than by the state. Since the bourgeoisie is working in the position of a private owner

working for profit, this is the perfect state for Capitalism. The other argument states that

capitalist reality favors maximum productive performance, but because of monopolies, this is no

longer the case. Mr. Sumpter refutes this point by explaining that in order for this to occur there

would have had to be a point in time where there was no monopolistic competition. Because of

this there would have had to be perfect competition that changes into monopolistic competition,

which is improbable. Another way Sumpter refutes this argument is by explaining that perfect

competition has never been more prominent than it is in the present.

Capitalist Processes

Capitalism is an evolutionary process, meaning it is always changing. As long as new

markets are forming and new areas of transportation are developing, Capitalism is in motion.

However, Sumpter explains that continuing this intense motion causes industrial mutation,

meaning the economic structure is destroying the old industries and creating new ones. This

becomes an issue for Sumpter because the process requires much more time than the industry has

time for, and also develops into Creative Destruction. However, the time taken to develop these
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new industries is not an issue at all. This will now require more in depth observation in regards

to the mutation, and also the added time will give an advantage to the new industry because they

can fix any apparent issues, Creative Destruction, however, is an issue. Regardless of the allotted

amount of time during the evolutionary process, the industries are destroyed. The creativity,

time, and funds incorporated into each are essential, and over time as industry continues to

develop and economies rise, the creativity will be destroyed. This will happen either because

there will simply be no more ideas, we will be developed enough that we will no longer need

them. Joseph A. Sumpter brings these ideas to light and understands them well, however, his idea

regarding the evolutionary process as an issue is troublesome.

Personal Reflection

Ideas on the text

What Adam Smith Knew is a difficult philosophical read, but it is informational and

interesting, however, it is challenging. Comprehending the language, the complex wording and

sentence structure is problematic. It is a decent portrayal of the ins-and-outs of Capitalism, and I

enjoyed re-reading the chapter and better understanding the material. Reading this piece of the

text helped me gain a better sense of the type of economy my country has, and some of how it

operates. All of the information I obtained after comprehending the text I had not already known

and that caused me to have more of an appreciation for the text and what it has to offer me. The

text instills valuable information to its audience and allows them to make their own assumptions

about the different economic paths and the excellent and poor qualities of each. It is refreshing to

read a text that allows me to process the information in a way that is informative, not forced. I

enjoyed the information regarding the evolutionary process and the diverse arguments on

capitalist reality, however, learning about the diverse understandings of perfect and monopolistic
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competition, was the most interesting concept to me by far. Understanding the effects that the

bourgeoisie has in Capitalism considering their influence in the economy and that many believe

their effects were sabotage. The intermediate group used labor and funds in order to boost the

economy of their capital which benefits a Capitalist economy as a whole. I enjoyed the learning

process while reading this in depth text, and I would enjoy reading more in this genre in the

future in order to gain more knowledge about the economy and its benefits.
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References

Marx on social class. (n.d.). Retrieved November 14, 2022, from

https://uregina.ca/~gingrich/s28f99.htm.

Otteson, J. R. (2014). What Adam Smith knew. Encounter Books.

What is capitalism? - back to Basics - Finance & Development, June 2015. (n.d.). Retrieved

November 14, 2022, from

https://www.imf.org/external/pubs/ft/fandd/2015/06/basics.htm.