Capitalism summary

Introduction

Capitalism by James Fulcher What is in it for me? Discover the inner workings and history of our modern capitalist society. Capitalism is the lifeblood on which most of the world's economies and societies are run. We all have varying degrees of knowledge about what capitalism is, but its history and how we got to where we are today, are not as well known.

From why it first took root in England or how it led to the financial crisis. Of 2007 and 2008, capitalism's influence on humanity throughout its 200-year history cannot be understated. And by combining capitalism's history with an understanding of its basic mechanism of using money to make more money, we can begin to predict how it might affect humanity in the future. Although capitalism was initially restricted to Europe and North America, the fact that its implications are now omnipresent in nearly every corner of the world makes the understanding of it more pertinent than ever.

In this summary, you will find out how capitalists use money to make more money, why refugees helped capitalism come about in England, and what the subprime mortgage crisis is, and how it helped cause the great recession. This is capitalism by James Fulcher.

Capitalism is a Socio-Economic System

Capitalism is a socio-economic system where money is used to make more money. The majority of the world runs to varying degrees on capitalism. But while there is no monolithic form that governs everyone who lives under a capitalist system, there are a number of common principles that all varieties of capitalism share. Put simply, capitalism's most characteristic feature is the investment of money to make more money.

This sort of invested money is known as capital. Those who use money in this way are capitalists and the excess money made. Out of this process is profit. Capital can be anything that can somehow be transformed into money, take homeowners for example.

They can choose to sell their homes for money, rent it out to others, or use it as collateral for a mortgage. Another characteristic of capitalism is its reliance on wage labor. Combined with capital, such as machines, buildings, and raw materials, labor is necessary for the production of goods and services in return for their work laborers receive wages from employers. Wage labor is not only important, for production under capitalism, however, it is integral to capitalist consumption.

As individual workers cannot produce, all the goods or services they might require, such as food or a place to live, they have to purchase them. This drives demand for the goods and services resulting out of capitalist production, thus providing jobs for wage laborers in the first place. Wage labor therefore constitutes a fundamental interaction between capitalist production and consumption. Finally, capitalist consumption and production all take place within the confines of capitalist markets.

Unlike in pre-capitalist times where much of humanity only consumed what they produced and produced what they themselves consumed. Today's dynamic capitalist markets allow the consumption and production of practically anything as long as there is demand for it. Markets can take the form of the traditional marketplace, grocery store, or more recently online spaces where people buy and sell goods electronically. Within markets, capitalists seeking to make more profit than others generate competition.

This is a key tenet of capitalism. Competition can take many forms including cost reduction. One way of reducing costs is to lower workers wages. Another might be to increase innovation through creating machines that can replace human labor.

By lowering costs, capitalists can sell their products for less money than their competitors, thus generating more profit for themselves.