1. Capitalism Key Words Adam Smith Business Law of Supply and Demand
Law of Competition
Law of Self-Interest
Entrepreneurs
Free Enterprise
Private Ownership
Profit
Market Economy
Monopoly

2. Capitalism: Who supplies?
Groceries Entertainment
Medical care Clothing
Housing Aid to poor
Cars Technology
Leisure/luxury items Information/news
Utilities—gas/electricity Insurance

3. Capitalism is
An economic system that depends on private ownership (by individuals or companies made up of individuals) of businesses. Businesses produce goods and services by investing capital in machines or technology.
Businesses (producers) depend on consumers to earn profits.

4. Capitalists—entrepreneurs who became millionaires as a result of their business ventures, and sometimes their unfair business practices
Examples—19th c U.S.
Andrew Carnegie
John D. Rockefeller
Cornelius Vanderbilt
Joseph Pulitzer
Wm. R. Hearst
JP Morgan
Henry Ford

5. Law of Supply and Demand
Enough goods will be produced at the lowest possible price to meet demand in a market economy. Price is determined by both supply and demand.

6. Law of Competition
If two or more businesses are selling a product (competition), the price goes down.
Competition is good for consumers. When only one business sells a product, it is called a MONOPOLY.

7. Law of Self-Interest
People will do whatever is in their own interest. People work for their own good.
Business owners—motivated by profit
Consumers—motivated by low prices, high quality
Workers—motivated by higher wages, good working conditions

8. Laissez Faire “Let it be” Government should not
get involved in business
or regulate it.
Instead, business should be controlled by a MARKET ECONOMY, following the natural laws of economics (explained by Adam Smith in Wealth of Nations)
Capitalists believe this is better for everyone.

9. Why does Laissez Faire capitalism work?
Free enterprise—everyone has the opportunity to do the best for himself/herself,
Going into business selling a product that consumers want to buy
Looking for a better job
Buying a better quality product
Finding the same product at a lower price

10. Problems with capitalism:

11. Who benefits? Capitalism is good for. . .
Capitalism can be a problem for . . .