Capitalism

From Geography

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion. Capitalism is the system of laissez faire. There is no intervention or structuration from above, like government or NGO's. Allocation of resources is determined by the market. Via the 'price mechanism' an equilibrium between supply and demand is found. In case of a disparity between supply and demand the price will move until supply and demand are precisely matched. This mechanism is also called 'the invisible hand', since supply and demand will always meet each other in a perfect market via an invisible force, an invisible hand. A perfect market is characterised by not having rules or government intervention whatsoever. In theory the market will always reach a perfect equilibrium between supply and demand. In practice however, this does not happen due to the fact that calculations and the reality of society in general are grossly oversimplified. It is an improvement over slavery and feudalism, but there are still contradictions and inequalities (Schumpeter, 1994). In practice, this means most of the time that the people with money, power, knowledge etcetera rule the society. They are the important figures who have the power to create or institute things, or not. They are mighty and not following their rules often means that you will be the outcast of a society. So a few people have the power and the money.

Capitalism as a post-structuralism approach though has changed in todays globalised world. Capitalism is an dynamic process which is in 2010 becoming faster and faster. In this time and space shrinking period there is accumulation and an increase in the number of countries who are capitalistic. The circulations are faster and more often, because of the principle: "time is money and delays are costly". This will also lead into an increase of consumptions, and unfortunately when commodities are bought people forget about the circumstances they have been produced in (Went, 1996).

Founding father of todays capitalism is Karl Marx (1818-1883). His theory was about unfairly economic distinctions in society between lower class people and upper class people who where dominating and exploiting the people from the lower classes (Van der Velde, 2008). In other words, there is a "battle of classes". And, according to Marx, there will be a point in the future where the frustration of the lower class people becomes so high that it will rise a revolution. This will be a revolution from a society based on differences, inequalities and exploitation of lower class through upper class people into a society of equal political and socio -economical rights with welfare to be more important (Van der Velde, 2008). To put it in another way, from a more capitalist society to a more communist society, where everybody is equal.

References:

Schumpeter, J.A. (1994). Capitalism, Socialism and Democracy. Routledge, United Kingdom.

Velde, S. van de (2008). Marx, de analyticus van het kapitalisme. 125 jaar Marx, denken over zijn betekenis van de 21e eeuw. Aksant, pp. 46 - 51, Amsterdam.

Went, R. (1996). Grenzen aan de globalisering. Het Spinhuis, Amsterdam.

Published by Luuk Robers & Paul Leemans

Improved by User:BoudewijnIdema, 17 October 2011, 20:53 (UTC)

--FabianBusch 11:06, 24 October 2011 (CEST)