1. Illustrations by Tony Biddle
Capitalism in the US
Illustrations by Tony Biddle
Introduce the Project

2. Please Note
This curriculum material is provided to support union, community, and non-profit organizations to undertake popular economics training.
Non-commercial use and reproduction, with appropriate citation, is authorized.
Commercial or professional use is prohibited without approval from the Canadian Centre for Policy Alternatives, Ottawa, Canada.
This material has been edited by the NYC Virtual Enterprises Office for educational purposes. Some of the original slides may have been removed and replaced with other slides.
© Canadian Centre for Policy Alternatives, 2009

3. Key Topics Covered Birth of capitalism “Causes” of capitalism
Evolution of capitalism
Distinct phases of capitalism
Understanding neoliberalism

4. The Birth of Capitalism
The economic system we live under now emerged in the 18th Century in western Europe (especially Britain).
It evolved from relatively advanced and centralized feudal monarchies.
Non-agricultural production and trade came to displace feudal agriculture as the most influential sector in society.
New forms of ownership and control arose to reflect new technology of work.
New social structures emerged to meet the needs of this new system.
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5. What “Caused” Capitalism
There is broad agreement on these several factors as the cause to the emergence of capitalism:
New technology (power systems, machinery)
Unified, reliable markets (transport networks, weights & measures)
Resources (water power, coal)
Empire (raw materials & slave labor from colonies; captive market for output)
Government (strong state to oversee commerce, protect private property, manage colonies)

6. The Evolution of Capitalism
Initial conditions in capitalism were very harsh.
Workers were forced off their land and driven into cities
They suffered horrendous exploitation and conditions considered intolerable today: 7 day working weeks, 12 hour working days, child labor, frequent injury, early death
Early capitalist societies were not democratic
Capitalism rapidly spread and evolved.
Very high profits and high rates of reinvestment, kept the system growing and dynamic.
Capitalism placed increasing pressure on non-capitalist economies, eventually causing capitalism to spread
Conditions improved (in many places, not all), reflecting:
Labor laws established minimum standards
Unions won higher wages and better working conditions
Government became more active in regulating the economy and providing public services

7. Distinct Phases of Capitalism
Capitalism has experienced distinct phases. In the last century these phases included:
Early boom (1920s)
High factory production to meet the needs of WWI
Mass production of cars, radios, refrigerators, etc.
Massive consumer spending
Great Depression (1930s)
New banking regulations aimed at preventing financial chaos
Government income-support and make-work projects tried to reduce unemployment
Postwar “Golden Age” (1950s-1970s)
Wages and living standards more than doubled
Strong business investment and rapid expansion of government spending
Low unemployment and high productivity
Neoliberalism (1970s-present)

8. Neoliberal Principles
Underlying assumption that free markets is a good thing
Main Principles
Free markets without government interference would be the most efficient and socially optimal allocation of resources
Market forces act as a self-regulating mechanism
Economic globalization would be beneficial to everyone
Privatization removes inefficiencies of public sector
Governments should mainly function to provide the infrastructure to advance the rule of law with respect to property rights and contracts

9. Understanding Neoliberalism
Multi-dimensional effort to restore business power
Economic, political, and cultural power.
Came about as a response to problems of the late Golden Age:
Soaring inflation and unemployment
Rising international competition
Declining productivity and profitability
Spiking energy prices
Declining confidence on the dollar
Cite Dollars and Sense

10. Key Goals of Neoliberalism
Generally restore the economic and social dominance of private business and wealth.
Roll back and refocus government activities to meet business needs; cut taxes.
Reduce and control inflation; protect the value of financial wealth.
Restore insecurity and “discipline” to labor markets.
Eliminate “entitlements”; force families to fend for themselves.

11. Key Tools of Neoliberalism
Use interest rates aggressively to regulate inflation and control labor markets.
Privatize and deregulate more industries.
Scale back social security programs (especially for working-age adults).
Deregulate labor markets (including attacks on unions).
Use free-trade agreements to expand markets and constrain government interventions.

12. Homework Assignment
What are your thoughts on neoliberalism? Do you support or do not support neoliberalism? Bring notes and ideas to class the next day for open discussion.