Capitalism

Capitalism means economic system in which a country’s trade and industry are controlled by private owners, not the state. There are two kinds of capitalism, quasi-capitalism and absolute-capitalism. In quasi-capitalism system, government has right to interfere on decision making. On the other hand, government definitely has no intervention on decision making in absolute-capitalism system. The society in capitalism is divided into two classes, capitalist and worker class. Capitalist class consists of minority of people that have sufficient capital in producing and distributing goods. The rest is worker class consisting of majority of people who live off wage labor to fulfill their daily needs.

Capitalism is a profit-oriented system. They have to produce the best quality goods with the minimal cost produbtion and wage labor. The lower they pay labor, the more profit they will earn. It also does in the competitive side. The more creative and innovative in producing goods, the more consumers will buy the products. Therefore, they will get much more profit. Furthermore, the company should hire skilled labor in order to build productivity of the company. The company will not run well if there is no labor, of course.

There is free market economy in Capitalism in which government has no intervention in any kind of economic activities. All of the economic activities –such as taxation and pricing- are done by capitalist. Importing goods depends on the global market. So that, if they are not controlled it the local product will be go down before the imported product.