Study Questions for Fulcher’s “What is Capitalism?” – sept.8
1)What is the overall theme of this article and what is the definition of capitalism?
I think the overall theme comes to the overall growth of capitalism over the years and how vital it is to
the economy. Emphasizes importance of capitalism in all era’s and how growth of society is
interconnected with it. Merchant capitalism led to basic need to earn a profit and thought of investments.
Capitalistc production, grw on that by allowing society to benefit as well. With industrial revolution, lead
to the importance of wage and in turn created a whole leisure market for society to prosper. Finally, now
due to the need for markets in order to buy and sell good, financial markets allow investors to control risk
and loss through speculation. All in all, theme is how capitalism is key factor in the growth of society.
- Growth of capitalism,
Capitalism: system of investing money in order to earn a profit, risk association (risk/reward),
2)What was the East India Company and how did it operate?
Eas India company was a company based on sending fleets to foreign destinations in order to bring back
goods that could be sold at a profit in the homeland. Fleets wee financed by investors and shareholders,
and once goods were sold at a higher price in homeland, profit was distributed to all involved. Later,
began to reduce its risks by sending out more than one voyages in case a ship did not return.- had
monopoly in market, manipulated market,
3)Was merchant capitalism governed by principles of the free market?
No. Merchants manipulated the market by stocking up on products in order to drive prices up and then
sell for later at higher prices. Free and fair competition didn’t occur. Also used to drive out foreign
competition, by flooding foreign markets with their excess resources. In addition, merchants relied on
monopolistic business practices, as royal favour influenced a merhcants ability to earn a profit. Rather
than competing with merchants within own country, competition was interational, country vs. country.
Therefore, in each country there was always one large firm that held a large/monopolistic hold over the
countrys market; there is gov. intervention from the state,
4)What were the industrial capitalist activities of James M’Connel and John Kennedy in the cotton
They invested capital in order to create own cotton mill, and as it grew with the industry they made a
significant profit. However, due to popularity of industry profits they got involved with certain capitalistic
activities such as investing in larger and more advanced machinery, trying to reduce labour costs with
child labour, and increasing effiencey by driving a disciplined work force. (Child labour)
5)How did the