Economic Video Lectures
Chapter 3 Characteristics of Market System Capitalism
and Political Economy
I. Basic Characteristics of Capitalism
B. An economic system must also have the ability to adapt to changing economic environments.
For example, How will America's economic system adapt to changes caused by September 11?
C. Adam Smith described the beginning of capitalism.
1. His book, The Wealth of Nations, was the first description of capitalism.
2. Published in 1776, it described capitalism as it was practiced in 18th century England.
3. For more visit http://www.econlib.org/library/Enc/bios/Smith.html
D. Basic characteristics described by Adam Smith
1. Private property-the right to own resources and bequeath property
2. Freedom of enterprise-own a business
3. Freedom of economic choice-work/not work, spend/not spend
4. Role of self-interest
a. People are by nature economic creatures
b. Self-interest is a fundamental characteristic of people
5. Competitive market system
a. Many buyers and sellers
b. Market participants, buyers and sellers, have little control over price
c. Competition performs the organizing and controlling functions for a market economy
6. Limited government ("Laissez-faire ")
a. Government should let markets be with a hands-off philosophy)
b. Acceptable government involvement has become an important political
question in the United States during the last few decades.
c. Francois Quesnay popularized the term laissez faire.
E. Creative Destruction described by 20th century sociologist and
economist Joseph Schumpeter was an important addition to the idea of capitalism.
1. Change involves the creation of improved economic structures based on
technology and the destruction of inefficient economic structures.
2. Capitalism allows this destruction to take place.
3. The fight between labor and management has also brought much
4. Let Us Now Praise Private Equity explores the application of creative destruction
to the poor job creation during the great recession. National Review. 2/6/12
1. Modern Capitalism has many additional features
a. Complex Market System Setting Prices
b. Importance of Capital Goods and Technology
1) Complexity requires company produce limit their product lines.
2) Division of Labor allows specialization by ability ad training.
d. Unique descriptions of Modern capitalism
1. Corporate Capitalism: a capitalist marketplace characterized by the
dominance of hierarchical, bureaucratic corporations.
2. Crony Capitalism has been around from the beginning.
a) New name is Corporate Welfare
b) How crony capitalism corrupts the free market 30 minute vide 12/22/13
c. Hunter Lewis on crony-capitalism 30 minute vide 1/25/14
3. Money Manager Capitalism: money managers dominate savings/investing markets impacting
4. State Capitalism: economic activity is undertaken by the state is similar to
5. Patrimonial Capitalism gentry living off of inherited wealth see also
6. Capital in the Twenty-First Century by Thomas Piketty a book review
a. Capitalism vs. Democracy editorial 1/28/14
b. Capitalism in the Twenty-First Century editorial 3/25/14
c. Taking on Adam Smith and Karl Marx NYT 4/19/14
d. Capitalism is Not to Blame for Middle-Class Plight
a. The Fall of Rome reviews the market system of the Roman empire and how the author believes
government failures caused its demise..
b. Blackstone's Byron Wien, successful capitalist, discusses lessons of his first 80 years
c. Coercive power of capitalism
d. Hoodwinked An Economic Hit Man Reveals Why the World Financial Markets Imploded--and
What We Need to Do to Remake Them, by John Perkins Buy the Book
e. Revisiting old argument about impact capitalism Economist Magazine 4/4/14
f. Pyramid Theory looks at capitalism as practice the US democracy.
g. Economic system has many concise definitions.
h. Business Isn't Capitalism 5/3/14
i. How Will Capitalism End 6/14
j. Has Capitalism Reached a Turning Point discussions on needed reforms Forbes, 9/26/14
k. The Great Recession Using Quick Notes
3. Free Course Great Economists: Classical Economics and its Forerunners
a, The Successes and Price of Capitalism Video 1 hour
b. The End of Capitalism
Which is Better
The Circular Flow of Money
Please tell Friends About This Free
V. Criticism of
A. Crises Capitalism video contains ideas about capitalism resulting from
the The Great Recession of 2008-2009.
B. Why is Chinese Capitalism Better than American Capitalism? 1/2/11
C. Why Intellectuals Hate Capitalism by Robert Nozick
D.. American Politics Are we a Democracy? A Republic? A Polyarchy?
Noam Chomsky breaks down American Politics today and American
Politics that our founders envisioned.
E. Capitalism and Inequality (Jerry Z. Miller, Foreign Affairs) Without social safety
nets capitalism is doomed through social disorder. Editor's Note: I've seen a lot of
verbiage blaming Capitalism for the inequality in the U.S. Inequality is a political
question. It is the responsibility of voters through politicians to fairly distribute
production without substantially limiting the productive capabilities of capitalism which
have coped the Balance Sheet Recession known as with the Great Recession. 3/12/13
See People Not Voting Their Pocketbook is Literally Killing the Poor
F. Economic Report of the President 2014
G. BBC audio on the History of Capitalism
H. Center on Capitalism Columbia University is a great source of information
I. Is Capitalism Moral? A Commonwealth Club Podcast Debate – 10/ 22, 12
J. t Cent_0" href="#1979_">political economics
K The Predator State Video Part 1 Part 2 1/14
Class Discussion Questions.
Can You Answer This Question?
Some Think Our
Please Blog Friends About This Free Library Using
|Editor's Note:To solve the problem of not enough income for the
middle classes in the 1980's,
capitalism changed the name of Home Improvement Loans to Home Equity Loans and
people were allowed to what had been a retirement nest egg before they retired. There is
nothing wrong with this as long as people realize that they are delaying retirement.
Editor's Note: The recent large decrease in the Household resulted because people defaulted on mortgage debt and the Federal Reserve picked up the tap by printing money.
3 Homework Questions