Capitalism is the predominant socioeconomic system in the contemporary world. Your main objective is obtaining profits and accumulating wealth.
The capitalist system emerged in the mid-fifteenth century, replacing the feudalism that prevailed during the Middle Ages. With this new model, emerged the bourgeoisie, the production of capital, social inequality, among other characteristics that began to mark capitalism.
Check out some of the main aspects that define this political-economic system that dominates the world era of Globalization:
1. Making profit and accumulating wealth
This is the main objective of capitalism: to obtain wealth. Profit comes from the values accumulated from the collective work provided by private companies and performed by the proletariat (workers).
So that the profit is always positive, the owners of the means of production (capitalists) adopt cost containment measures, such as cheaper raw materials and suppliers.
Discover the differences between the Capitalism and Socialism.
2. workers are salaried
Salaried work is another of the main characteristics of this socioeconomic system. Workers (proletariat) are entitled by law to receive remuneration in exchange for their labor force.
Wages began to become more common during the period known as Industrial Capitalism (from the mid-18th century onwards). Until then, serfdom and slavery were the two systems with the greatest presence in the world, reflecting customs practiced during the Middle Ages (Feudalism)
In the contemporary capitalist system, the proletarians represent the vast majority, who depend on wages paid fixedly by the capitalists (owners of private property).
Wage earners, in turn, use this money to purchase products and services from other capitalists, making the system move constantly.
3. Predominance of private property
In the capitalist system, production systems belong to a person or a group in general. These are private goods or areas of individual use.
There are also, within the capitalist system, the so-called state companies, which in theory are of State administration. But, due to intense economic crises, many of them end up being privatized, that is, sold to private companies.
4. State intervenes little in the market (Market Economy)
This is the free initiative to regulate the capitalist market, with little or no state intervention. This process is carried out through the so-called law of supply and demand, where product prices are determined according to consumer demand and the quantity of this on offer.
To make a better profit, companies need to offer quality products at affordable prices. In this sense, competition is another factor resulting from this law of supply and demand, as it expands purchase options, which makes prices lower.
5. division between social classes
Considered the most controversial feature of the capitalist system, class division determines within the collective work process, the side that holds power and profit and the side of those who work for the production of this profit.
On one side is a minority called capitalist, represented by the owners of the means of production and capital and on the other side the majority called proletarians, people who sell their labor power in exchange for a salary that guarantees health, food, transport, leisure, etc.
This is the main point of class division, as the capitalist does not always offer adequate and sufficient remuneration to meet all the basic needs of the workers.
Learn more about Capitalism and what is to be Capitalist.
6. Growth of social inequality
Finally, the inequality between social classes can become abysmal, causing some groups to hold a lot of wealth, while others live in extreme poverty.
Social inequality is one of the most problematic fruits of capitalism. This disparity is usually associated with the unevenness in the country's economy, that is, when this is not able to guarantee basic conditions to guarantee a quality standard of living for all.
Know more about:
- Social inequality
- capital in economy
- Industrial Capitalism
- Characteristics of globalization
