Team member: Glen Rawung13838935, Weilong Wang14393574, Ziyue Ouyang14462377, Ziyu Wang14453096Lecture: Theodora Issa

Capitalism

Questions

Capitalism has had different forms at different stages in history and in different nations. You are required to provide a historical overview of capitalism trying to answer the three questions:

(1) Do you think capitalism has an image problem?

(2) Have we already seen the final ‘golden age’ of capitalism? (3) Would capitalism save us – if so, how?

1 2 3 54

Anglo-American Capitalism1945-70sAmerican and United kingdom

Collective Capitalism After World War II

Japan

State-directed Capitalism1978China

Corporatist CapitalismAfter World War II

Europe

Oligarchic Capitalism1991Russia

Form of Capitalism

Enjoy Capitalism

What is Anglo-American Capitalism？

No government intervention

Highly reliance on

stock market

Free trading 1945-70s

Europe and Japan Model

• Corporatism, is a form of economy that was created as an option to socialism and intends to achieve social justice and equality without the need to take away private property from individual members of society.

• Collective Capitalism, Its entity is co-operative long-term relationships, originating from the post World War II boom.

Politicalsystem

1978 10%

Economicsystem

Fastest-growing

Private property

ownership

Economic liberalization

Socialism political system

State-directed Capitalism

China

Oligarchic Capitalism

Fall of communism

in 1991

Inefficiency in check on

business

More government intervention

Does capitalism has an image problem?

Industrial revolution Improvement of welfare in capitalism country It sustained in good way for hundreds of years

Positive image

“The creative destruction that is at the heart of a growing economy is now seen as evil”- Murray Charles

Image problem of capitalism

Collusive capitalism

Great fortunes made quickly in financial markets

Why capitalism has an image problem?

Capitalists collude with politicians for particular party.

corruption on a massive scale for competitive advantage

Collusive Capitalism and Crony Capitalism

Great wealth made by smart trading decisions before

Capitalists have Inside knowledge, financial instruments and opportunity that ordinary people don’t have

Basic problem is about virtue

Great fortunes made quickly in financial markets

Timeline

1978 China

State-directed

capitalism

1945

– 19

70s

Mai

nly in

Wes

tern

Countries 19

71

The End o

f gold

en a

ge

of cap

italis

m

1991 Russia

Oligarchic capitalism

Now

Why we seen the final golden age of capitalism？

High levels of debt

Urbanization

High levels of debt• Eurozone 87.7% of GDP • US has a debt to GDP ratio passed 100%• UK total external debt at 492% of GDP• Nearer 950% of GDP• Large budget surpluses• Lots of the highly indebted countries of the

OECD(Organization for Economic Co-operation and Development)

High levels of debt

Urbanization

• Western Europe and Japan after 1945• In the developing world• One-off shift • Great Doubling• Cheap source of labor• You only get it once

Country Workforce in Agriculture

in 1950

Workforce in Agriculture

in 2000

German 23% < 5%

France 31% < 5%

Italy 44% < 5%

Japan 49% < 5%

Would Capitalism Save Us?

Capitalism is a natural economic system

• Based on the institution of the market

• It comes naturally to humans and comes spontaneously in all human society

Human necessity to exchange

• The act of market exchange was found in all human beings characteristic

• Adam smith (1723-1790): market exchange = defining the characteristic of our humanness

Free market = freedom

• The market enables us to express our humanity and provides us with source of freedom.

• To restrict such operations result in oppression

Economically productive system

• The profit motive provides capitalism with dynamism that produce competitiveness

• Such competitiveness force people to be able to allocate resource efficiently

Lead to democracy• The market and the

profit will require the institution of private property for their operation

• In addition from the properties, capitalism also associated with political democracy.

Friends of the environment

• By being productive = motivation to minimize use of natural resources

• Environmental objectives are best met with Capitalism

Conclusion• The characteristics of different capitalism

1. Anglo-American Capitalism (1945-1970s)2. Europe (Corporatism) and Japan (Collectivism) (After WW II)3. State-Directed Capitalism (China 1978)4. Oligarchic Capitalism (Russia 1991)

• Image problems1. People may break the bottom of ethic for profit2. Business's operations affected by rules set by legislators and

bureaucrats3. Corruption on a massive scale

Conclusion

• The reasons why we seen final golden age1. High Level of Debts2. Urbanization

• Why capitalism can save us1. Expressing our humanity2. Freedom and equity in trading3. Efficiency in allocating resources 4. Lead to democracy5. Friend to the environment

Thank you!

References

– The Image G10 Debt Distribution 2011 Anthony B. Sanders testimony to Congress. http://www.zerohedge.com/news/psssst-france-here-why-you-may-want-cool-it-britain-bashing-uks-950-debt-gdp (Access date: 15 March 2013)

– Bowel, Paul. 2007. Capitalism. United Kingdom: Person Educational Limited– Meara, Graeme. 2012. HOW THE FUNDAMENTALS OF AMERICAN AND JAPANESE

CAPITALISM DIVERGE. http: www.google.com.au (Access date: 21 March 2013)– Murray, Charles. 2012. Coming Apart: The State of White America. New York: Crown

Forum.– Difference Between Capitalism and Corporatism. 2010. DifferenceBetween.

http://www.differencebetween.net/miscellaneous/politics/difference-between-capitalism-and-corporatism/ (Access date: 20 March 2013)

– Smith, Adam. 1993. An Inquiry into the Nature and Causes of the Wealth of the Nations. Cambridge: Hackett Publishing Co, Inc.

Acknowledgement

We acknowledgement Google image as resource of PPT slides.