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Economic Concept of Capitalism

The economic concept of "capitalism" as theorized today is a relatively recent phenomenon in the history of humankind, dating back little more than two centuries to the 1776 publication of Adam Smith's The Wealth of Nations. Capitalism as expounded by Smith carries within it ideals of "free trade," free market" and "market freedom" that explicitly place the capitalist economist's faith in the individual and business, rather than in government and regulation (Lekachman and Van Loon 42-43). Conversely, policies and theories relating to government control over an economy predate capitalism by a considerable period of time; perhaps the monarch Croesus (d. 546 B.C.), seeking to standardize Lydian trade by stamping his image on all coinage in his realm, represented best the ancient world's government concern with the economic health of its peoples. It has been the 20th Century dilemma to decide which approach is the more efficacious economic policy: free market, "laissez-faire" capitalism or interventionist, government regulation? It is a question whose answers vary with the nation, the decade and the political system.

Economic theory can never be totally divorced from political consideration. Smith's advocacy of free market capitalism was an analysis of the changing British economy as a result of the Industrial Revolution; it was also a call for reform of the prevailing "mercantilist" economic policies of the British Crown and Parliamentary government (McKay, Hill and Buckler 649-651). Mercantilist policy centered around a central authoritarian figure, in 16th/17th Century Britain a constant power struggle between the Crown and Parliament. Mercantilism thrived on the trade/imperialist opportunities afforded the strong European nations who could exploit the New World and Asia; the client states must supply precious metals or goods in exchange for overvalued European product - or protection. These were monopolistic arrangements a...

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Economic Concept of Capitalism. (1969, December 31). In LotsofEssays.com. Retrieved 05:58, March 19, 2024, from https://www.lotsofessays.com/viewpaper/1680525.html