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Key Features of Capitalist Economy

In: Business and Management

Submitted By micahl
Words 1717
Pages 7
Assignment One
Introduction
In this assignment I will be explaining the key features of a capitalist economy whilst highlighting the importance of wage labour and capital as a self- expanding value. Following that I will then define globalisation, the forces driving it, and the parts of the UK that are most globalised.
Capitalism
this covers ownership of Property/Trade with the aim of making profit or as a business start-up. This social system can be found worldwide it consists of 2 things. Wage labour (working class), Private Ownership (Capitalist Class).

Capitalist Economy
When individuals/organisation has ownership over production. The privacy of this economy means that it does not have any intrusion from government bodies.

Profit Motive
Making profit for a capitalist is one of the most important aspects of being a capitalist. This is because most capitalist will not wish to lose any initial investments. If the social economy has any demands that are not ethically correct capitalist must attend to their needs purely based on profit purpose. Profit = Survive for capitalist. The formula for Profit in business is Profit = Revenue – Cost. A lot of business profits in capitalism will be pumped back into the business in order to pay for the cost. Cost is everything in the input of the business this could mean machinery, rent, and equipment and most importantly in most businesses is the labour cost for the “Working class” as mentioned before. (FT.com, 2015)

Government
Government bodies may interfere with capitalist in two ways, through direct intervention and indirect intervention. Direct intervention can only intervene if the company is a GOC (Government Owned Company) or a SOE (State Owned Enterprise). This will allow them to Take back property or land or nationalise a private owned company. Indirect Intervention can be seen as the rules;…...

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