CAPITALISM (MARKET, FREE ENTERPRISE)
- 3 basic questions are answered by consumers
and sellers
- motivation is profit
Adam Smith -- Wealth of Nations (1776)
- "Invisible Hand" Theory
-competition, along with free enterprises, will
guide resources to their most produective use (they act as an "invisible
hand")
- individuals acting in their self- interest will bring about what's
best for the economy
-"laissaz-faire" = no govt. intervention in business
FUNDAMENTALS OF FREE ENTERPRISE
1. Private Property - owned by individuals; leads to wealth
2. Freedom of choice
3. Voluntary Exchange- people enter into exchanges that are mutually
beneficial
4. Competition - benefits the consumer b/c...
a.there are many choices
b.increased quality and service
c.lower prices
5. Incentives (profit) - desire for profit = high quality/lower prices
CAPITALISM & US GOVT. DOCUMENTS
Bill of Rights
- protection of private property
- 2nd (gun ownership), 4th (search & seizure),
& 5th (eminent domain)
Declaration of Independence
- King limited colonists' trade with rest of the world
-limited choice & competition
- Jefferson argued for free trade & true competiton
Constitution
-states cannot tax each other's goods (preserves competition)
Return
to ELP Assignment Page