Capitalism | Definition & Characteristics
Capitalism is one of the most dominant ideologies in the modern times, which now gives birth to the new concept of globalization. Capitalism is an economic cum political system and social organization of political societies in which the major instruments of production that is capital, land and labour are in the hands of private individuals.
Capitalism propagates values and belief system which encourages minimal roles for state functionaries and maximal roles for individuals and pluralistic groups. Examples of capitalist countries are Nigeria, America, Britain, Japan, France etc.
Characteristics of Capitalism
Some of the characteristics of capitalism are:
- Capitalism encourages private ownership of the means of production, distribution and exchange.
- It lays emphasis on the domination of labour by capital. This means that in the production process, capital I rated higher than human labour.
- Another characteristic of capitalism is that, it is a market economy or free enterprise economy; which means that there is no room for centralized economy for the state.
- In capitalism, there is the gap between the have and have not. That is the gap between the rich and the poor.
- Capitalism encourages the right of inheritance.
ADVANTAGES OF CAPITALISM
- Free movement of capitals
- Individual ownership of property
- It encourages competition
- It lessen government interference in individual affairs
- Capitalism advocates for equality of opportunity
DISADVANTAGES OF CAPITALISM
- Unemployment- since capitalism does not encourage centralized economy; there is the tendency of unemployment in a state.
- Capitalism allows competition and as such, there is the need to be conflicts among the people.
- Exploitation of workers exists in capitalist economy.
- There is a wide gap between the rich and the poor in capitalist economy.
- As capitalism emphasizes on continuous accumulation of wealth for the capitalists, individuals can be sacrificed often in order to accumulate wealth or to make profit.
CLASSIFICATIONS OF CAPITALISM
Bourgeoisie or bourgeois: this is the wealthiest or the poorest set of people in the capitalist society. This group of people includes; the top government officials like the president, Governors, Ministers and some of the business barons or moguls in the society. In capitalism, there are two categories of bourgeoisie, namely:
The National Bourgeoisie:this category of bourgeoisie comprises of the wealthy people who got their wealth through hard work and honest investment in industries. This is the type of bourgeoisie we have in countries like America, Britain, Japan, Germany and France.
The Comprador Bourgeoisie: this category emphasizes on those wealthy people, who got their wealth through dishonest and corrupt means, like the embezzlement of public fund, illegal trading and drug trafficking. This type of bourgeoisie exists mostly in the third world countries of Africa and Asia, more especially in a country like Nigeria.
Petit Bourgeois: These classes of people are rich and wealthy, but they are not rich or wealthy like the National or Comprador Bourgeoisie. Petit bourgeois comprises mainly of the relatives or children of the National or Comprador Bourgeois. This group is the second class of people in the society.
Proletariat: thiscategory comprises of the working class people or the workers which through the sale of their labour forces, get the means of their livelihood. People in this category are rewarded through their efforts and abilities to work.
The peasants: this is the poorest class of people in the capitalist classifications. This is because this group comprises mostly of farmers, the down trodden as well as those who wallow in abject poverty. Their mean of livelihood is mainly from farming and other petty trading.
- Canon of taxation
- Fiscal Policy | Definition & Objectives
- Public Enterprise | Definition & Characteristics
- Audit | Principles of Auditing | Internal & External Audit
- Characteristics of Public Goods
- Instruments of Monetary Policy
- Monetary Policy | Definition & Objectives
- Government Budget
- Public Financial Management
- Monetization Policy in Nigeria
- Factors Determining Taxable Capacity
- Public Debt | Types | Similarities & Difference