I. Introduction: Growth, Innovation, Welfare, and the US
I. What is Capitalism?
A. An economic system in which people pursue individual wealth.
(characterized by the following)
o Competition in free markets
Capital (financial) Markets
o Decentralized, little gov’t planning
o Strong sense of private property/personal ownership
o Unit of production=the firm (leads to dynamics of growth)
Goal: make as much profit as possible
Produce for as little cost as possible, sell for as high price
as market supports
Employ workers, purchase materials to produce
o Income is generated from either sale of products or labor
o Growth comes from:
Lowering cost of production
II. What is Human Welfare?
o Life expectancy
o Inherent value
o Means to income
o Better citizen