Commerce Capitalism Lesson 7 Slide 7A

What Does That Mean? TermDefinition capitalisman economic system characterized by private ownership of the things used to make, transport, and distribute products, which is operated for profit. free marketbuyer and seller transactions based on mutual agreement with no government interference. property rightsthe ability of individuals to accumulate private property, which property is protected by clear rights and fully enforced laws. profitthe money a business makes after all its costs and expenses are paid. Slide 7B

What Does That Mean? TermDefinition market competitionthe rivalry among sellers of products or services to increase profits and sales by offering the most favorable terms to the consumer. emerging marketbank a for-profit business that enables people to accumulate wealth by making deposits of money into their accounts. Magna Cartathe royal charter of political and civil liberties granted by King John in 1215 guaranteeing basic rights. Slide 7C

What Does That Mean? Slide 7D TermDefinition communismsystem of government and economy characterized by the collective ownership of property and no rights of private property ownership. socialismsystem of social organization in which the production and distribution facilities are owned collectively by the people and run by a centralized government; with some recognition of personal property. collective ownershipownership by a group for the benefit of all the members of that group. cronyismThe appointment of family members, friends, and associates to positions of authority without proper regard to their qualifications

Reminder Slide 7E  Remember to visit rds/ rds/ to access the online flashcards!

Lesson 7 Objectives  State the key features of capitalism.  Present one key theory why capitalism took root in the West.  Summarize the arguments of capitalism’s critics.  Match socially conscious capitalism terms and tenets with their definitions.  Tell about the role and goals of the U.S. Chamber of Commerce. Slide 7F

Complete this statement: Capitalism is __________:” a) a political system b) a form of government c) a social movement d) an economic system Slide 7G

Feature of Capitalism #1: Private Ownership of Property  Recognition of property rights  Protections by government  Fosters social and judicial stability  Reduces risk to encourage investment, innovation, and exploration Slide 7H

Feature of Capitalism #2: Operation of Business for Profit Slide 7I  Profit promotes innovation  Profit promotes competition  Profit promotes qualified work force  Profit promotes efficiency

Socially Conscious Capitalists  Social philosophy and movement holding that environment profitability, sustainability, and achieving good are not mutually exclusive  Investors direct money into companies with ethical track records in these areas  Developed in response to criticisms of capitalism as persistently focused on profit and consumption, exploitive of workers, the environment, and other evils. Slide 7J

Emerging Markets  Represents an expansion of capitalism  Emerging markets are in all areas including Asia and Africa, South America, and Eastern Europe  Countries are not yet as politically, judicially, or economically stable as older markets  Higher risk = higher profit  Slide 7K

The Big Picture Slide 7L Capitalism is an economic system based on property rights and profit. It’s not perfect, but in spite of its flaws, commerce it. Capitalism has plenty of critics, but commerce thrives under capitalism. It’s hard to find a more compelling reason for the success of capitalism than property rights. These promote a just, accessible, and predictable legal system, social stability, and foster competition and innovation. The protection of property reduces risk of loss, encouraging the pursuit of wealth. SoCap is a philosophy and movement holding that profitability and social responsibility are compatible. New capitalist markets are emerging all around the globe which present excellent, but often riskier investment opportunities.

Ponder and Predict  Have you ever noticed that certain types of businesses tend to gravitate toward a particular geographic area? For example, in Atlanta, Georgia, there are over 200 health info tech companies. In Raleigh, North Carolina, there’s an inordinate number of video game developers and production companies. Is the concentration of similar businesses within a particular region by coincidence or design? Slide 7M