Commerce Capitalism

Lesson 7

Slide 7A

What Does That Mean?

Term Definition

capitalism an economic system characterized by private ownership of the things used to make, transport, and distribute products, which is operated for profit.

free market buyer and seller transactions based on mutual agreement with no government interference.

property rights the ability of individuals to accumulate private property, which property is protected by clear rights and fully enforced laws.

profit the money a business makes after all its costs and expenses are paid.

Slide 7B

What Does That Mean?

Term Definition market competition

the rivalry among sellers of products or services to increase profits and sales by offering the most favorable terms to the consumer.

emerging market

bank a for-profit business that enables people to accumulate wealth by making deposits of money into their accounts.

Magna Carta the royal charter of political and civil liberties granted by King John in 1215 guaranteeing basic rights.

Slide 7C

What Does That Mean?

Slide 7D

Term Definition communism system of government and economy

characterized by the collective ownership of property and no rights of private property ownership.

socialism system of social organization in which the production and distribution facilities are owned collectively by the people and run by a centralized government; with some recognition of personal property.

collective ownership

ownership by a group for the benefit of all the members of that group.

cronyism The appointment of family members, friends, and associates to positions of authority without proper regard to their qualifications

ReminderSlide 7E

Remember to visit http://c21student.com/flashcards/

to access the online flashcards!

Lesson 7 Objectives

State the key features of capitalism.

Present one key theory why capitalism took root in the West.

Summarize the arguments of capitalism’s critics.

Match socially conscious capitalism terms and tenets with their definitions.

Tell about the role and goals of the U.S. Chamber of Commerce.

Slide 7F

Complete this statement:

Capitalism is __________:”

a) a political system

b) a form of government

c) a social movement

d) an economic system

Slide 7G

Feature of Capitalism #1:Private Ownership of

Property Recognition of property rights

Protections by government

Fosters social and judicial stability

Reduces risk to encourage investment, innovation, and exploration

Slide 7H

Feature of Capitalism #2:Operation of Business for

Profit

Slide 7I

Profit promotes innovation

Profit promotes competition

Profit promotes qualified work

force

Profit promotes efficiency

Socially Conscious Capitalists

Social philosophy and movement holding that environment profitability, sustainability, and achieving good are not mutually exclusive

Investors direct money into companies with ethical track records in these areas

Developed in response to criticisms of capitalism as persistently focused on profit and consumption, exploitive of workers, the environment, and other evils.

Slide 7J

Emerging Markets Represents an expansion of capitalism

Emerging markets are in all areas including Asia and Africa, South America, and Eastern Europe

Countries are not yet as politically, judicially, or economically stable as older markets

Higher risk = higher profit

www.emergingmarkets.org

Slide 7K

The Big PictureSlide 7L

Capitalism is an economic system based on property rights and profit. It’s not perfect, but in spite of its flaws, commerce it. Capitalism has plenty of critics, but commerce thrives under capitalism. It’s hard to find a more compelling reason for the success of capitalism than property rights. These promote a just, accessible, and predictable legal system, social stability, and foster competition and innovation. The protection of property reduces risk of loss, encouraging the pursuit of wealth. SoCap is a philosophy and movement holding that profitability and social responsibility are compatible. New capitalist markets are emerging all around the globe which present excellent, but often riskier investment opportunities.

Ponder and Predict

Have you ever noticed that certain types of businesses tend to gravitate toward a particular geographic area? For example, in Atlanta, Georgia, there are over 200 health info tech companies. In Raleigh, North Carolina, there’s an inordinate number of video game developers and production companies. Is the concentration of similar businesses within a particular region by coincidence or design?

Slide 7M