SOC 1510 Lecture Notes - Lecture 2: Profit Maximization, Externality, Overproduction
Document Summary
If we did not have private ownership, capitalism would not exist. Central goal of capitalism: to maximize profits. It is in the process of profit maximization, that we can see faults in the system. Profit motive often leads to overproduction: overproduction often leads to: the need for new markets, price collapse. When they run out (the world is finite), the market contracts and this is one of the systemic. Each market contraction reduces competitors in the marketplace: eventually the market will recover, this process becomes cyclic and repeats. The power of megacorporations to influence the market itself. Income (and wealth) stratification: companies get to decide where to distribute their profits, the profit comes from the workers, not the owers (generally) Negative externalities: something that an actor does and they no not experience it. It easier to dispose of waste more harmful than dealing w/ it the proper way; the community experiences the consequences.
