Definition and History of Capitalism

Definition and History of Capitalism

Outline

Attention Getter: Begin off by quoting Milton Friedman, a renowned economist and a one time winner of the Nobel Prize. He once said, “What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.”

Specific Purpose: To define capitalism, give a brief historical background, and provide some real-life examples.

Overview: There are different definitions of capitalisms that have been suggested by various scholars since the term was first coined. The primary objective for today’s presentation is to make sure that the audience leaves the venue with a full grasp of the definition of capitalism.

Thesis Statement: The definition of capitalism could sometimes be least understood unless practical, real-life examples are incorporated into the explanation.

Transition: One of the best ways to understand the concept of capitalism is to examine its definition and scope.

1. The definition of capitalism

1. The Definition by Nobel Prize winner Milton Friedman
2. He said, “The role of competitive capitalism is the organization of the bulk of economic activity through private enterprise operating in a free market – it is a system of economic freedom and a necessary condition for political freedom” (Friedman, 1962, p. 4).
3. In the practical world, this definition by Friedman can be likened to a butcher who sells meat to customers and uses the acquired cash to purchase other necessities such as bread because he or she cannot produce all the things they require.
4. The definition by Robert P. Murphy
   1. Murphy is a Ph.D. holder and the author of the “The Politically Incorrect Guide to Capitalism.”
   2. He defined capitalism as a free system where people have unlimited freedom on how they can use their resources.

Transition: A proper understanding of capitalism cannot be achieved without knowing its origin and history.

1. History of capitalism

1. The concept of capitalism can be dated back to the Bible, where components of God’s economic system were valued. In both Exodus 20:9 and Deuteronomy 5:13, God commands that man should labor and work for six days.
2. It was Adam Smith who introduced modern capitalism.

1. He challenged the mercantilism, which was the economic system of the time.
2. He had ideas for a free market that drove the world to a capitalism market.

Transition: The content presented within this section can be summarized in just a few sentences

The clincher: Perhaps it is for the first time that some people re getting to know that capitalism has its origin in the bible. It is based on this origin that various definitions of the concept have been coined. However, regardless of the number of the suggested definitions, the two concepts that remain unchanged are the privatization of property and the creation of competition.

References

Brearton, S. (2008): “A Brief History of Capitalism,”  “Report On Business Magazine,” The Globe & Mail division of Bell Globemedia Publishing Inc., Canada.

Friedman, M & Friedman, R. (1980). Free to Choose. Harcourt Brace Jovanovich, New York, and London.

Friedman, M. (1962). Capitalism and Freedom. The University of Chicago Press, Chicago Ltd, London.

Murphy, R. (2007). The Politically Incorrect Guide to Capitalism. Regnery Publishing, Inc.: Washington, D.C.

Orwell, G. (1945). Animal Farm. Secker and Warburg, London.

Smith, A. (1776): Wealth of Nations. W. Strahan and T. Cadell, London.