RSM100Y1 Study Guide - Midterm Guide: Mikhail Gorbachev, Invisible Hand
Document Summary
Financial capital: savings that can be deployed and concentrated. By 1750: fc in place, but pc mostly in small craft building. Major scarce input to production was land, landowners were chief powers. James watt steam engine: a huge increase in production, pc now becomes key to production, with fc supports it. Pure" capitalism: as private property, without government interference. Solution: capitalist system would collapse on its own. When capital was concentrated, workers would: rise in revolution, own all capital in common, all work for the common good, the state would wither away. Socialist"s solution: less extreme than marx"s solutions, strong government would control the system, major industries and services would be owned and run by the state instead of private capitalists. Pure" capitalism in the 1800s: massive economic growth, terrible working condition. Workers unrest: huge firms in rail, steel, chemicals collude openly in cartels or called trust", economic instability.
