Capitalism ....civics...form iv

 

Characteristics of Market System Capitalism
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. Basic characteristics of capitalism (market economy)     A. Economic systems determine what to produce, how to produce, and who will receive production.      B. An economic system must also have the ability to adapt to changing economic environments.                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               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.                     1. Complex Market System Setting Prices         2. Importance of Capital Goods and Technology         3. Specialized             a. Complexity requires company produce limit their product lines             b. Division of Labor allows specialization by ability ad training.     .          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.