Capitalism and it’s History in Canada What is Capitalism?

History of Capitalism in Canada Saskatchewan had a unique set of resources which had the potential to support an agricultural economy. People who originally settled in Western Canada came here with the intent of creating a better life for themselves.

History cont. They had both political and economic criteria for what they would consider an improved standard of living:  the right to live their lives according to their personal conscience;  the right to be independent and autonomous decision makers socially and politically;  the right to own their own property; and  the right to accumulate wealth and pass it on to their children.

Capitalism in Canada Most Canadians accepted a capitalistic economic system. The economic decision making system which came to dominate Canada in the early twentieth century was the market system of economic decision making.

The Market System Was Selected Because It Suited: the capitalistic economic paradigm; the liberal democratic political paradigm; as well as the geographic and social realities of the western Canadian frontier.

What is Capitalism? Capitalism is an economic paradigm: Here the capacity to produce goods and services are owned and controlled by individuals or groups; and Here the market place is used to make decisions about how the basic economic questions are answered for individuals and society:  what goods & services should be produced?  how should society go about producing goods & services?  for whom should these goods and services be produced?  Who decides what, how, and for whom goods and services will be produced?

Capitalism or Not? Consider the definition of capitalism. A brother and sister want to sell popcorn during minor hockey games this winter. They ask the league officials for permission. The officials tell them they can sell popcorn, but the pocorn must be buttered and plain in paper bags, and for no more than a $.05 profit per bag. Is this an example of capitalism?

Group Discussion Today the United States of America is often described as a capitalist society. Based on the two part definition of Capitalism, work in your groups to provide and example of both parts of the definition. Capitalism

Comparing Economic Systems Market Economy Planned (Command) Economy Traditional Economy Mixed Economy See Worksheet 1 for definitions

What are the differences? Market Economy - also known as a capitalist economy, consumers influence the market through their demand and ability to purchase goods and services. There is very little government intervention. Producers are motivated by profit and therefore consumers purchasing patterns determine what goods and services are produced.

Former Soviet Union was a Planned/Command Economy. The government leaders were responsible for making economic decisions. Resources are owned and controlled by the government. In traditional economies the four basic questions are based on past practice. Collective decision making occurs.

Key Features of Capitalism Motivation for profits Private Ownership Voluntary Exchange Free Enterprise

Resources for required for Capitalism Natural Resources Capital Resources Labor Resources Entrepreneurial Resources

Based on the handout “Capitalism” Identify examples of all four types of resources used to create the following products.  Computer  Jar of Apple Sauce  T-shirt  Airplane

Differences in Capitalist Society Key difference between businesses in a capitalist society is whether they provide goods or services.

Government Involvement The US Economy does have elements of Command Economics and Traditional Economics.  Government plans and budgets spending  Specific areas of the country resemble a Traditional Economy

Mixed Economy Although US Economy is best described as a Capitalist society, the correct definition of its economic system is to call it a Mixed Market Economy. Today Canada also falls under the Mixed Market Economy as well. What are the elements making this a mixed-market economy?

Conclusion Capitalism:  Is an economic paradigm: here the capacity to produce goods and services are owned and controlled by individuals or groups; and here the market place is used to make decisions about how the basic economic questions are answered for individuals and society:  what goods & services should be produced?  how should society go about producing goods & services?  for whom should these goods and services be produced?

Capitalism is based on:  Individual initiative,  Competition,  Private ownership of property  Businesses respond to the demands of goods and services by the consumer.

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