Rise of Capitalism Essay Example | Topics and Well Written Essays - 1500 words

Rise of Capitalism - Essay Example In a capitalist society there is competition in the market. Friedrich (1995) states that competition in the capitalist system is based on the assumptions that there are many buyers and sellers in the market, This assumption means that the existence of many buyers and sellers means that the prices and conditions in the market cannot be controlled by one buyer or seller. The other assumption is that there are zero barriers to entry and exit into an industry by firms, this means that the market supply and demand depends ion the nature of market where if only some firms controlled the market than competition will be limited and prices determined by the firm in the industry. The other assumption is that consumers have knowledge regarding prices in the market. This means that a consumer has information regarding the quality and price of a product and therefore firms will compete in the market to meet consumer price and quality requirements. Therefore the capitalist society is characterised by competition and this competition leads to the proper allocation of resources of production, the other systems have limited competition where in the socialist society no competition is evident because this system is based on equality philosophy. Motivation:The capitalist society through its competitive nature helps in promoting increased production and innovative ideas. The nature of the capitalist society motivates individuals to involve themselves in production activities unlike other forms.... Therefore this system is different from the socialist and feudal systems in that there is private ownership of property. Competition: In a capitalist society there is competition in the market. Friedrich (1995) states that competition in the capitalist system is based on the assumptions that there are many buyers and sellers in the market, This assumption means that the existence of many buyers and sellers means that the prices and conditions in the market cannot be controlled by one buyer or seller. The other assumption is that there are zero barriers to entry and exit into an industry by firms, this means that the market supply and demand depends ion the nature of market where if only some firms controlled the market than competition will be limited and prices determined by the firm in the industry. The other assumption is that consumers have knowledge regarding prices in the market. This means that a consumer has information regarding the quality and price of a product and therefore firms will compete in the market to meet consumer price and quality requirements. Therefore the capitalist society is characterised by competition and this competition leads to the proper allocation of resources of production, the other systems have limited competition where in the socialist society no competition is evident because this system is based on equality philosophy. Motivation: The capitalist society through its competitive nature helps in promoting increased production and innovative ideas. The nature of the capitalist society motivates individuals to involve themselves in production activities unlike other forms of economic organisation. Given that production resources are scarce the individuals in the economy will compete