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What are 5 characteristics of capitalism?         

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carnige | Student, Undergraduate | (Level 1) Honors

Posted June 22, 2010 at 6:11 AM via web

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What are 5 characteristics of capitalism?

 

 

 

 

 

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Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

Posted June 22, 2010 at 11:47 AM (Answer #1)

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The second part of the question is confusing to me.  I think that I can focus or at least start the process on the first question.  There are many characteristics of capitalism.  I would say that one of the first elements of a capitalist set up is the emphasis on private enterprise.  Capitalism favors individual companies and private endeavors to generate wealth.  This would bring another characteristic of a capitalist configuration. Namely, that there is a need for money or capital to drive the economic system.  Money is needed to generate more of it.  Capitalism is driven with this in mind.  Additionally, many capitalist economies of scale attempt to limit the role of government in directing commerce.  Capitalism places its faith in the "free market" or the competition between businesses and endeavors and allowing this competition to play itself out with as little interference from the external body as possible.  I would say that another characteristic of capitalism is its cyclical nature of expansion and contraction.  Capitalism, through its faith in the marketplace, operates in cycles of "booms" and "busts" and this intensity of magnitude is another characteristic or trait.

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dbello | High School Teacher | (Level 1) Educator

Posted June 23, 2010 at 9:06 AM (Answer #2)

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I will answer the first part of your question as it pertains to the United States however, you do not identify where you are from therefore I cannot possibly answer how the U.S. economy has played a role in your nations' economy.

Capitalism or Free Enterprise is the system in the United States where by the means of production are privately owned. (However there are several U.S. government regulated corporations, among them the Post office and Amtrak)

The characteristics of Capitalism:

1. means of production are privately owned

2. founded on the principle of private property- the people have the right to own property

3. profit motive- the right to earn money

4. consumer sovereignty- people have the right to buy what they want...as long as they have the money to pay for it

5. competition- the rivalry between sellers

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