Understanding Capitalism Ideology, History, Characteristics, Strengths and Weaknesses

Education. Co. ID – There are a lot of these ideologies, previously we discussed Fascism and this time we will talk about capitalist ideology. So below is a full explanation:

Understanding the Ideology of Capitalism

The word capitalism comes from the Latin word "caput" which means head. In the 12th and 13th centuries the word was defined as funds, a sum of money, a supply of goods, or also interest on a loan. In the 18th century the term was defined as productive capital.

Karl Marx stated that the term became a central concept called the 'mode of production'.

Meanwhile, Max Weber also considers capitalization as an economic activity or activity aimed at a market and also spurred on to generate profits through exchange market. Examples of this capitalism for example self-service, stock sales, and granting credit.

History of Capitalism

The history of the development of capitalism is divided into 3 phases, namely as follows:

Early Capitalism (1500-1750)
Classical capitalism (1750-1914)
Advanced Capitalism (1914-present)

The thinkers or developers of Capitalism include: John Locke, Martin Luther King, Robert Malthus, Lord Keynes, Adam Smith, David Ricardo, David Hume, and Karl Marx.

Characteristics of Capitalism

Some of the characteristics that characterize the ideology of capitalism:

1. Broad recognition of personal rights
2. Ownership of the means of production is in the hands of the individual, this is in contrast to the ideology of communism.
3. The market functions to provide signals to producers and consumers in the form of prices.
4. Government intervention should be kept to a minimum. "The Invisible Hand" is to regulate the entire economy to be efficient.
5. Individuals are free to determine the work / business that is considered good for him.
6. The economy is governed by the market mechanism.
7. Humans are seen as homo-economicus creatures, who always pursue their own interests (profits).

Advantages and Disadvantages of Capitalism

Below will be described the advantages and disadvantages of Capitalism, including the following:

The advantages of capitalism

This system of capitalism has several advantages, the advantages of this capitalism include:

1. More efficient in utilizing resources and distribution of goods.
2. People's creativity is high because of the freedom to do all kinds of things that are the best for themselves.
3. Political and social supervision is minimal, due to the less time and cost required.
4. Encouraging economic growth by facilitating open competition in the market.
5. The result of capitalism is a decentralized economic system. This factor is considered to be one of the greatest advantages of capitalism.
6. In a decentralized economy, the individual has more choices in business.
7. That hard work is highly valued in a capitalist economy. Entrepreneurs who have good performance and are able to continue to innovate will win the competition.
8. This capitalism shapes the economy in which consumers control the market.

Lack of capitalism

There are not only advantages but also disadvantages of capitalism, this system also has disadvantages because:

1. There is no perfect competition. There is only imperfect competition and monopolistic competition.
2. The price system fails to allocate resources efficiently, due to externality factors (not taking into account those that depress labor wages and others).
3. Some consider the fierce competition brought about by capitalism as a major weakness.
4. This capitalism creates a money-oriented economy. The business enterprise will look at the economy from a materialistic point of view.
5. Profit is seen as the main business goal by becoming a business giant who takes over small companies.
6. Capitalism triggers a reduction in natural resources due to exploitation to maintain sustainable economic growth.
7. Capitalism is also believed to cause an unfair distribution of wealth with wealth and power only being controlled by a few people.
8. Starting from liberal capitalism then developed into a liberal ideology. The characteristics of countries that adhere to the ideology of capitalism are as follows.
   1. Citizens' freedom is upheld. Citizens are free to do anything as long as they do not violate the rule of law.
   2. The state only acts as a supervisor for the rule of law.
   3. In this monopolistic capitalism, the values ​​of religious elements have been ignored, thus giving birth to secularism (i.e. the notion that separates religion from the state).
   4. This era of capitalism is growing very rapidly, it can be seen with the free market (globalization). Which gives everyone the opportunity to be able to do business without any special barriers.

Well that's an explanation of the Understanding of Capitalism Ideology, History, Characteristics, Strengths and Weaknesses, hopefully what is described above can be useful for you. thank you