PHIL 3310 Lecture Notes - Lecture 4: Welfare Capitalism, Profit Motive, Planned Economy
22 May 2018
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Chapter 4
Study Guide 4-(The Nature of Capitalism)
1. What is capitalism?
a. Capitalism can be defined as an economic system that operates on the basis of
profit and market exchange and in which the major means of production and
distribution are in private hands
2. Define socialism and explain Worker control socialism.
a. Socialism is an economic system characterized by public ownership of property
and a planned economy. Worker control socialism is when individual firms
respond to a market when deciding what to produce and acquiring the necessary
factors of production.
3. Read the historical background and trace the evolution of capitalism through guilds,
mercantile capitalism, and industrial capitalism. What is a Guild?
a. A Guild is where associations of individuals involved in the same trade.
4. How did state welfare capitalism come about and how does it differ from industrial
capitalism?
a. State welfare capitalism came about during the Great Depression of the 1930’s.
State welfare capitalism is when the government plays an active role in the
economy, attempting to smooth out the boom-and-bust pattern of the business
cycle through fiscal and monetary policies. Industrial capitalism is different
because it involves the association with a large-scale industry.
5. Outline the four features of capitalism today.
a. The four features of capitalism today are companies, profit motive, competition,
and private property. Capitalism permits the creation of companies or business
organizations that exist separately from the people associated with them. Profit
motive implies and reflects a critical assumption that human beings are basically
economic creatures, who recognize and are motivated by their own economic
interests. Competition is the regulator that keeps a community activated only by
self-interest from degenerating into a mob of ruthless profiteers. Private property
is central to capitalism, meaning that capitalism requires private ownership of the
major means of production and distribution.
6. Articulate as the text does the moral justification of capitalism.
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Document Summary
State welfare capitalism is when the government plays an active role in the economy, attempting to smooth out the boom-and-bust pattern of the business cycle through fiscal and monetary policies. Industrial capitalism is different because it involves the association with a large-scale industry: outline the four features of capitalism today, the four features of capitalism today are companies, profit motive, competition, and private property. Capitalism permits the creation of companies or business organizations that exist separately from the people associated with them. Profit motive implies and reflects a critical assumption that human beings are basically economic creatures, who recognize and are motivated by their own economic interests. Competition is the regulator that keeps a community activated only by self-interest from degenerating into a mob of ruthless profiteers. High costs, complex and expensive machinery, intense competition, and the advantages of large-scale production all work against the survival of small firms: the american economy is facing both theoretical and operational challenges.
