Capitalism

An essay defining the economic theory of capitalism. Capitalism is an economic system in which the private sector controls and regulates the economy. This paper defines capitalism and explores its origins in economist Adam Smiths Wealth of Nations back in 1776.It also discusses critics of the system, the most influential being Karl Marx whose Marxism theory claimed that economic crises and capitalism are linked. Under ideal conditions, the growth of capitalism spurs friendly competition for consumers, ensuring that private enterprises will provide the best goods or the best services at the most reasonable prices.The reality, however, is that bigger corporations tend to monopolize their markets through practices other than friendly competition.Rather than concentrating on product development, many big manufacturers rely on marketing practices such as glitzy ad campaigns and celebrity endorsers to hook consumers.Corollary to this, many smaller businesses that provide comparable or even better products are not able to compete. This limited arena of competition also gives rise to an underclass of workers, many located overseas.Conglomerates such as Nike take advantage of cheap labor from countries like China to keep the prices of their shoes down.Such labor practices would be harder to enact in the United States, where the government is responsible for enforcing labor laws.