I. Characteristics of Market System Capitalism
     A. Economic systems determine what and  how to produce, and who will receive production. 
     B. An economic system must also adapt to changing economic environments.
         For example, America must adapt to changes to 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.
    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.
    E. Creative Destruction described by 20th century sociologist/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.