Economic Systems
Summary
TLDRThis lecture delves into the contrasting economic systems of capitalism and communism, exploring their definitions, historical contexts, and modern applications. It examines the pros and cons of each system, highlighting capitalism's emphasis on private ownership and profit maximization versus communism's pursuit of economic equality and public ownership. The instructor also discusses various forms of capitalism, from oligarchic to welfare state capitalism, and critiques the pervasive influence of capitalism in society. The lecture concludes with a thought-provoking analysis of capitalism's allure and its potential drawbacks, using lyrics from Kendrick Lamar's 'Wesley Theory' to illustrate the complexities of economic systems on individual lives.
Takeaways
- đ Capitalism is an economic system characterized by private ownership and the pursuit of profit, with minimal government intervention, while communism advocates for public ownership and central planning with no private property.
- đ The debate over which system produces the most happiness is subjective and centers on the balance between wealth accumulation and equality.
- đĄ Capitalism is often criticized for creating income inequality and the potential for monopolies, whereas communism has been critiqued for its lack of incentives for innovation and the historical failure of central planning.
- đ The means of production, including land, labor, and capital, are owned by private entities in capitalism and by the state in communism.
- đ Capitalism features supply and demand-driven pricing, while communism has government-controlled pricing.
- đ Historical examples of communism, such as the Soviet Union and China, have shown that while they aimed for a classless society, they often resulted in autocratic rule and economic hardships.
- đ The failure of communism is attributed to several factors, including lack of profit incentive, failure of central planning, and concentration of power leading to corruption.
- đïž Types of capitalism range from oligarchic, where a few control the economy, to welfare state capitalism, which uses government intervention to redistribute wealth and provide social services.
- đ” Kendrick Lamar's 'Wesley's Theory' is highlighted as a critique of capitalism, illustrating its allure and the eventual realization of its drawbacks.
- đ Capitalism is ubiquitous in modern society, influencing everything from media to personal aspirations, and is often seen as the only viable economic system to participate in.
- đ The script suggests that while capitalism offers opportunities, it also comes with inherent issues such as taxation and the potential for exploitation by the state.
Q & A
What are the two main economic systems discussed in the lecture?
-The two main economic systems discussed in the lecture are capitalism and communism.
How does the lecture define capitalism?
-Capitalism is defined in the lecture as an economic system promoting private entity ownership of the means of production and favoring the free market.
What is the primary goal of capitalism?
-The primary goal of capitalism is to make and maximize profit using democracy generally and the free market.
What does the lecture suggest about the relationship between poverty and capitalism?
-The lecture suggests that poverty is not inevitable or natural but is a byproduct of capitalism, a point to consider and reflect upon.
What is the main difference between the means of production in capitalism and communism?
-In capitalism, the means of production are owned by private entities, whereas in communism, they are owned by the government.
What are the essential characteristics of communism as outlined in the lecture?
-The essential characteristics of communism include common or public ownership, central planning, much less competition, and a classless society as an ideal goal.
What is the historical significance of 'The Communist Manifesto' in the development of communist ideology?
-The Communist Manifesto, written by Karl Marx and Friedrich Engels, laid out a materialist and scientific analysis of history and the future trajectory of human society, rejecting previous Christian-influenced communist philosophies.
Why did the Soviet Union collapse according to the lecture?
-The Soviet Union collapsed due to issues such as a lack of consumer goods, long lines at understocked grocery stores, and a failure to meet the basic needs of the people, despite overall economic growth.
What are some reasons the lecture suggests for the failure of communism in practice?
-The lecture suggests reasons such as a lack of profit incentive leading to less competition and innovation, failure of central planning, and the concentration of power leading to exploitation and corruption.
What is the concept of 'alienation of workers from their labor' in the context of capitalism?
-The concept of 'alienation of workers from their labor' refers to the situation in capitalism where workers do not have ownership or a claim to the products they produce with their own hands, as they are owned by the business owners.
What is the difference between state-guided capitalism and welfare state capitalism as described in the lecture?
-State-guided capitalism involves the state guiding the economy through regulations and direct economic activities, while welfare state capitalism uses the state to redistribute resources of the economy to provide for those who have not succeeded within the market, including services like healthcare and education.
Outlines
đ Introduction to Economic Systems
The lecture begins by posing a hypothetical question to the audience about choosing an economic system to live within, highlighting the contrast between a system with unlimited wealth accumulation and one with greater equality and less poverty. The main topic of discussion is set to be the comparison between capitalism and communism, including their basic definitions, historical context, and types. The lecture aims to clarify common misconceptions and delve into the intricacies of these economic ideologies, starting with the fundamental differences in the ownership of the means of production and the level of government intervention.
đ Capitalism vs. Communism: Definitions and Distinctions
This paragraph delves into the definitions of capitalism and communism, explaining that capitalism is characterized by private ownership and a profit motive, with minimal government intervention and a competitive market, while communism advocates for public ownership and central planning, with the government controlling the economy. The paragraph also touches on the historical development of these ideologies, referencing Karl Marx's view of the split between capitalists and proletarians, and the modern application of these systems in countries like China, Cuba, Laos, North Korea, and Vietnam, noting that these countries have incorporated some capitalist principles.
đ Historical Background of Communism
The lecture continues with a historical exploration of communism, starting from its ideological development during the French Revolution and the publication of 'The Communist Manifesto' by Karl Marx and Friedrich Engels. It discusses the materialist and scientific analysis of society's history and future as presented by Marx and Engels, and the idea of a final stage of human development that would eliminate class struggles and the state. The paragraph then provides examples of communist states, particularly the Soviet Union and China, detailing their rise, the implementation of communism, and the issues that arose, such as the emphasis on industry over consumer goods and the resulting famines and economic challenges.
đ Reasons Behind the Failures of Communism
This section of the lecture examines the reasons why communism has failed in practice, despite its theoretical promises. It suggests that the lack of profit incentive led to less competition and innovation, the complexity and failure of central planning resulted in inefficiencies, and the concentration of power led to corruption and exploitation. Additionally, it touches on the idea that human nature, with its inherent greed, may be ill-suited to a system that restricts the ability to accumulate wealth and power.
đ€ Adam Smith's Perspective on Capitalism
The lecture shifts focus to capitalism, highlighting the ideas of Adam Smith, who is considered one of the fathers of modern economics. Smith's perspective is that self-interest drives economic transactions, and it is this rational self-interest that can lead to economic prosperity. The paragraph also discusses the potential problems of capitalism, such as the tragedy of the commons, where shared resources can be overused and depleted due to lack of incentive for conservation, and the concept of alienation, where workers are disconnected from the products of their labor.
đŠ Types of Capitalism and Their Characteristics
The final paragraph explores various types of capitalism, including oligarchic capitalism, where a small group of elites control the economy and politics; state-guided capitalism, with significant government intervention; corporate capitalism, characterized by large corporations' market control; crony capitalism, where corporations and the government have close ties; entrepreneurial capitalism, which emphasizes individual business ownership; laissez-faire capitalism, with minimal state intervention; and welfare state capitalism, which uses state resources to support those who are less successful in the market. The paragraph concludes by reflecting on the ubiquity of capitalism and its influence on all aspects of life, as well as the critique of capitalism presented in Kendrick Lamar's song 'Wesley Theory,' which highlights the allure and the drawbacks of the system.
Mindmap
Keywords
đĄEconomic Systems
đĄCapitalism
đĄCommunism
đĄMeans of Production
đĄGovernment Intervention
đĄClass System
đĄInnovation
đĄMonopolies
đĄCentral Planning
đĄWelfare State Capitalism
đĄAlienation
đĄOligarchic Capitalism
đĄState-Guided Capitalism
đĄCorporate Capitalism
đĄEntrepreneurial Capitalism
đĄLaissez-Faire Capitalism
đĄTragedy of the Commons
Highlights
The lecture explores the concept of economic systems, particularly capitalism and communism, and their impact on happiness and equality.
Poverty is presented as a potential byproduct of capitalism, prompting reflection on its inevitability.
A comparison is made between the wealth accumulation in capitalism and the focus on equality in communism.
Capitalism is defined as an economic system promoting private ownership and favoring the free market, in contrast to communism's push for economic equality and public ownership.
The goals of capitalism and communism are contrasted: profit maximization through democracy and a free market versus a planned economy aiming for a classless society.
The characteristics of capitalism, including private ownership, profit motive, and minimal government intervention, are outlined.
Communism's essential features, such as public ownership, central planning, and a classless society, are explained.
Pricing in capitalism is determined by supply and demand, while in communism, it's controlled by the government.
Pros and cons of capitalism are discussed, including freedom for producers and consumers, innovation incentives, and issues like income inequality and worker exploitation.
The means of production and their significance in the context of economic systems are explained, with a focus on land, labor, and capital.
Karl Marx's view on the split between capitalists and proletarians, and the resulting exploitation, is discussed.
Communism's implementation in China, Cuba, Laos, North Korea, and Vietnam is examined, noting the deviation from Marx's original definition.
The historical development of communism, starting from the French Revolution and the publication of 'The Communist Manifesto', is reviewed.
The Soviet Union's rise and fall, including the impact of central planning and the resulting consumer goods shortage, are analyzed.
China's historical shift from communism to a mixed economy with market reforms and state enterprises is discussed.
Reasons for communism's failure are theorized, including lack of profit incentive, central planning complexities, and concentration of power leading to corruption.
Adam Smith's perspective on the self-interest driving economic transactions in capitalism is introduced.
The concept of the tragedy of the commons in the context of public ownership and resource exploitation is explained.
Different types of capitalism, ranging from oligarchic to welfare state capitalism, are outlined with their respective characteristics and implications.
The prevalence and inescapability of capitalism in modern society, along with its influence on media and consumer behavior, are highlighted.
A critique of capitalism is presented through Kendrick Lamar's song 'Wesley Theory', which examines the allure and drawbacks of the system.
The lecture concludes with a summary of key points about capitalism and communism, emphasizing the importance of understanding their definitions, pros and cons, history, and modern applications.
Transcripts
welcome back to another lecture and
today we're going to be talking about
economic systems so if I had to afford
you the opportunity to choose an
economic system to live within what
would that system look like would you
choose the system where you could acrew
as much wealth as possible with very
little limit to your spending or would
you choose a system where there's far
more equality maybe less poverty and
everyone's viewed more equally which
system do you think would produce the
greatest amount of Happiness what do you
think would be the best
system and that's what we're going to be
talking about today we're going to be
looking at capitalism versus communism
we're going to look at a basic
understanding of it um how to define it
a little bit of history and some types
um and so just to have some thoughts on
it um this first slide here is just just
to make you think you know um so the the
first one says poverty is not inevitable
or natural but but it's a byproduct of
capitalism now that may or may not be
true uh but that's something I want you
to think about um and have an answer for
by the end of this uh small lecture you
know and the next one is with capitalism
you either work or you star and with
Communism you work and stuff so it's
really a bit of a way up that you need
to make you know in terms of what sort
of economic system you would love to
live
within so let's look at capitalism
versus communism in terms of what they
are and what they mean and this is going
to be starting from a very very basic
level so that we can all get an
understanding of what these terms are
it's very common that these terms are
thrown around in debating without a
proper understanding of why they came
about or what they exactly mean you know
people often assume that capitalism just
means more money and communism just
means equality you know but it's a bit
more complicated than that so let's look
at the meaning first right so capitalism
by definition is an economic system
promoting private entity ownership of
the mean of production and it favors the
free market communism is a political and
economic ideology promoting economic
equality and disapproving private
property concept and therefore it it
opposes capitalism right it came up in
opposition to capitalism the goal of
capitalism is to make and maximize
profit using democracy generally and the
free market and the goal of Communism is
to follow a planned economy and
establish a communist Society the means
of production in capitalism are owned by
private entities and in communism it's
owned by the government we'll get into
an understanding of what that exactly
means uh a little bit later on in terms
of government intervention there's
minimal or no government intervention in
capitalism and in communism there's High
government intervention and it's more of
a command economy although there is some
Nuance to this which we'll get into
later in terms of the essential
characteristics and these are the things
that you may mainly need to remember
when you think of the words capitalism
and communism capitalism has private
ownership profit motive minimal
government intervention a competitive
market capital accumulation and class
systems are created involuntarily and
for communism think common or public
ownership Central planning much less
competition and a classless society
which is what they would ideally aim for
and then in terms of pricing which is an
um a look a slight look into economics
uh in capitalism pricing is usually set
via supply and demand and in communism
it's controlled by the
government so let's look at some pros
and cons through the lens of capitalism
right so what is good about capitalism
what is bad about capitalism and then
the converse would obviously apply for
communism so the benefit of a capitalist
system which we just described is that
there's a lot of freedom for the
producers and consumers there's open
competition between businesses there's
incentives for Innovation to create new
ideas and new things and sell them to
make more profit and there's natural
price stabilization in most instances uh
that means that the supply and demand
affects the price such that it doesn't
um become a situation where there's too
much of an excessive price or too low of
a price right it usually balances itself
out and some major disadvantages is that
there's High rates of income inequality
and this is what we know and what we see
in the current day there's the formation
of monopolies where a certain group of
people AC crew lot of wealth and are
then able to dictate and control um
Power in an area and very commonly
there's exploitation of workers because
because there's such a gap between the
rich and the poor the poor need to
survive because of the the capitalist
system so they're willing to work for
very low wages for example right so it's
it's um and we we all we've all heard of
these pros and cons of
capitalism so now back to what I was
talking about in terms of the means of
production right what what does that
mean right so the means of production
are the elements needed to produce goods
and services for example land labor and
capital and any production process
depends upon a particular material
configuration of the means of production
this means look at any object around you
the table that in front of you the chair
that you're sitting on it required
different things to be produced right it
required land it required people being
willing to make it it required Capital
to buy the Machinery to buy the raw
material you know that's basically what
the means of production means right it's
the factors that contributed to a
product being produced and there was a
guy named KL Marx very famous who
believed capitalism to be characterized
by a split right between two groups so
there's between the capitalist owners
also known as the Bazi and these people
owned the means of production and he
believed that there were also people
called the proletarians who only had
their labor to sell they weren't able to
own the mean means of production so
that's how KL Marx viewed it right he
viewed the split and he didn't like the
fact that the split existed and um
communism is the official form of
government in China Cuba Laos North
Korea and Vietnam however these
countries also abide by some capitalist
principles and they are largely
autocratic in nature and they don't
reflect Marx's definition of what true
communism was right we don't really see
an example of that in in the modern
day okay so let's look at communis
explored a bit further so now we're
going to go into some history and
background on communism so firstly to
understand modern communist ideology
began to develop during the French
Revolution and its seminal tract where
KL Marx and this guy Frederick Engles
wrote The Communist man Manifesto which
can be seen on the right right and that
pamphlet rejected the Christian tenor of
previous communist philosophies laying
out a materialist and scientific
analysis of the history and the future
trajectory of human society so basically
these guys wrote these things this thing
saying right we want Society to look
this way via a communist perspective
right basically you can go and read this
if you want to but you don't need to
know too much detail about it right but
the important thing is that in communist
Theory the final stage of human
development would Mark the end of all
class struggles and therefore of History
so what they would want to occur is all
people would live in Social equilibrium
without class distinctions family
structures religion or property and the
state too would wither way right so
that's the ideal thing that uh they
wanted okay so we're going to look at
two examples of Communism the first is
the Soviet Union and the second is China
in modern day right so let's look at the
Soviet Union which obviously no longer
exists as we know uh so what happened
right in 1917 during World War I there
was an uprising in Russia which toppled
the Zar which is the ruler of Russia and
sparked a Civil War and there was a
group of radical marxists led by
Vladimir lenon which gained power this
group was called the Bolsheviks and they
founded the Soviet Union and they
attempted to put communism into practice
and it actually worked right it worked
at that point in time right the Soviet
state became very powerful um they
prohibited descent they controlled the
economy agriculture the banking system
industrial production was subject to
quotas and price controls all of this
was laid out by this Soviet government
right you can read up more on that and
the system of central planning so
Central planning means C the central
body such as the government controls a
lot of what is going on the in the
economy meaning they're able to set
prices for certain Goods they're able to
decide uh what goods are available for
buying selling Etc you know that sort of
stuff right so most things economically
were planned by the government in a
central body so Central planning was
working quite well initially right and
it allow allowed for rapid
industrialization right a large spike in
the GDP um and it even outpaced that of
the US at that time right and however
though the Soviet economy grew at a much
slower Pace than its capitalist or
Democratic counterparts right and weak
consumer spending was a particular drag
on growth what happened was Central
planners had a heavy emphasis on
industry and this led to the chronic
underproduction of consumer goods and
they were long lines that understocked
grocery stores
uh and there was a lot of poverty and
problems that came about right so even
though there was this great prosperity
in terms of the overall Nation as a
whole with the GDP Etc uh because of the
amount that the country was producing
for example there was a bit of problems
that resurfaced on the ground level with
people not being able to get basic needs
or Necessities or Goods okay and as a
result of that the Soviet Union
collapsed in 1991 but you can read more
on that and an example two would be
China so what happened was uh in 1949
after more than 20 years of war with the
Chinese nationalist party and Imperial
Japan ma yong's Communist Party gained
control of China to form the world's
second major Marxist Len leninist state
right so Ma's role in China resembled
stalins in in its violence deprivation
and insistence on ideological Purity and
what happened during this thing called
the great great Leap Forward the
Communist Party ordered the rural
population to produce enormous
quantities of Steel in an effort to
jumpstart the Industrial Revolution in
China and that was that seemed good
right it seemed quite good but in that
same period of time there was this great
Chinese famine right that killed at
least 16 million people and perhaps more
than 45 million so what you can see in
the similarity is that there was such a
heavy emphasis on industry and producing
and trying to be industrialized that
they almost forgot about the basic needs
of the people on the ground level right
and in this case it led to the severe
famine that occurred in China so that
was the issue with the central planning
that it just went
wrong and then afterwards um there was a
series of Market reforms that remained
in effect and the US began normalizing
relations with China when President
Nixon visited and now the the Chinese
Communist party was created right and
that's still in power and that presides
over a largely capitalist system through
state Enterprises which continue to form
a large part of the economy however
freedom of expression is significantly
curtailed and meaningful opposition to
the CCP isn't permitted right so it'll
take a miracle for the CCP to be outed
right uh but that's currently what's
occurring in China so my question then
is why did Communism fail right because
in the instances where it's been tried
to be applied fully it's failed right it
hasn't worked as effectively as people
would have liked it to right or as
effectively as it uh capitalist
counterparts so why is that so there's a
few reasons number one or theories
rather number one is that there's a lack
of profit incentive among citizens and
that leads to less competition and less
Innovation if you don't have to create
something to uh put food on the table or
um stand out in your industry then
there's no need for you to innovate
there's no need for you to create new
goods and services and products if
everything's already given to you or at
least there's a plan for everything to
be already given to you secondly there
was a failure of central planning as I
definitely as I previously described
right and the issue is that Central
planning is often complex it requires
lots of data and growth data may have
been fabricated to create an illusion of
progress so that is the data of um how
well the country is doing right in the
in the view of the global sphere and
that may have been fabricated to to to
make it seem like the country is
progressing but realistically they only
progressing in certain areas and not as
well as they would have liked to thirdly
and I think the main problem was the
concentration of power which led to
exploitation of the system corruption
laziness what this means is that there
were certain people who gained control
of everything uh generally they were
involved in central planning and then
they skewed the economy in certain ways
because they had so much power and that
created problems and the fought Theory
which is just something that I
personally believe is human nature right
I feel like humans inherently are greedy
and they want things for the themselves
you know I feel like humans are always
going to want to do get more if it is
possible for them to get more so I think
it's quite hard for then people who do
have that background to exist within a
communist system where they aren't
always allowed to get more or do things
freely you know I feel like people are
always going to want to do that and
that's eviden by how people act within a
capitalist system uh so yeah these are
just some of the reasons as to why you
think communism failed so now let's look
at capitalism a bit more in depth right
so capitalism explored further so this
guy on the right Adam Smith who is a was
a philosopher and also considered uh one
of the fathers of modern modern
economics so what he said is that it is
not from the benevolence of the butcher
the Brewer or the baker that we expect
our dinner but from their regard to
their own interest so you can see he's
being a bit more realistic in terms of
understanding uh human nature he says um
that both parties to a voluntary
exchange uh of voluntary transaction
have their own interest in the outcome
but neither can obtain what he or she
wants without addressing what the other
wants and it is this rational
self-interest that can lead to economic
Prosperity what that means basically is
that see we have let's look at a butcher
for example right you go to the butcher
the butcher is not giving you meat
because he wants to give you meat or
because he likes giving you meat the
butcher is giving you meat because
you're going to give him money in return
for that and that money is something
that he can use to sustain himself right
so he is self-interested in wanting
money you are self-interested in wanting
meat because you want food for the day
for example right so both parties are
self-interested but in that way it sort
of works you know so that's what he's
saying and uh looking uh at some other
aspects of capitalism now is when
property isn't privately owned but
rather is shared by the public a a
problem known as the tragedy of the
commons can emerge right so what happens
then this is looking at what would
happen in communism ideally right so
with a common pool resource then which
all people can use and none can limit
access to or or or yeah yeah yeah sorry
this is in capitalism that n can limit
access to all individuals have an
incentive to extract as much use value
as they can and no incentive to conserve
or reinvest in the resource and
privatization is a possible solution to
that so what that means is that if
things are so freely available to you
such as in a cap capitalist system the
problem is that people will take and
take and take from that resource without
having an incentive to reinvest in that
resource and that is a problem because
that is unsustainable and that's what we
see in capitalism and also under
capitalist production the business
owners retain ownership of the goods
being produced which is quite crazy to
think about because if a worker in a
shoe factory were to take home a pair of
shoes that they made with their own
hands it would be theft right and this
concept is known as alienation of
workers from their labor so even though
that worker produced those shoes that
pair of shoes by their own hands that
pair of shoes is not theirs and they
have no claim to it they alienated from
their labor and that's what capitalism
does right so we're going to look at
some types of capitalism there's six
that we're going to go through so the
first one is known as oligarchic
capitalism so what this means is that
there's a small group of elite
capitalists called ARS who have taken
control of the economic and the
political system and what they do as you
can imagine this is bad because they use
existing wealth to buy of competitors or
corrupt politicians examples include
modern day Russia and Ukraine the reason
this is an example is because the end of
the Soviet communism in that area uh
allowed small groups to capture key
parts of the economy the oligarchs and
then some may argue that the USA is
sliding towards oligarchy with large
large corporations such as Amazon and
Walmart having lots of power in the
economy the next type is State guided
capitalism so here you can see the
government does have control right this
may remind you of parts of Communism but
it's a form of capitalism right it's
state guided so the economy is mostly
Guided by the state through regulations
and direct economic activities so
regulations are rules for private actors
in the economy to follow for example
environmental regulations which are
meant to prevent damage to the
environment by setting minimum standards
on pollution and other issues and also
direct economic activities through
state-owned firms and government
agencies that manage economic production
and most countries use a form of State
guided capitalism meaning the state does
intervene here and there not fully but
they are present right and the most
extreme example of this however is China
where the Chinese government owns firms
that account for approximately 40% of
the economy which is very very
high we then get corporate capital so
big companies have a controlling
position on the market achieved through
neoliberal policies and there's
similarities between oligarchic and
corporate capitalism remember the first
one in both cases both those with an
advantage on the market due to their
size will try to use their position to
create even further advantages right and
we refer to this as anti-competitive
behavior and corporate capitalism is
therefore not a truly free market system
when we say free market we mean a
situation where everyone is able to
trade freely on that market from an
equal position right and it's also
idealistic in a way right I think it's
very rare for that to actually occur so
what we saying in corporate capitalism
is that there's um instead of a group of
wealthy people or a government or so it
is the corporations that then are able
to take control of a lot of the economy
they are efficient but they create
monopolies and in a situation where the
corporations allude with the government
or with the government we can get
something called crony capitalism right
an example of this is Facebook or meta
which we know dominates social media
through its ownership of WhatsApp and
Instagram right it's a corporation that
dominates and more examples are Toyota
or Samsung who operate in a wide range
of Industries right Beyond just car
manufacturing or phone manufacturing
right the next example is
entrepreneurial capitalism so as you can
imagine by the definition of the word
this this is based on the work of free
market entrepreneurs right and it won't
have the same efficiency as large scale
corporate capitalism this can be
regarded as the purest form of
capitalism however entrepreneur
entrepreneurial capitalism can be hard
to maintain as inevitably some
entrepreneurs be will be more successful
than others and then they'll expand by
buying off their competition this leads
to even bigger businesses until
corporate capitalism is reached so
therefore this whole entrepreneurial
capital ISM doesn't last very long so
you can imagine it's basically saying
that this allows a lot of people to
create their own businesses you know
have your startups and whatever and then
eventually these get bigger they buy off
competition and it leads to corporate
capitalism so there there's definitely
elements of entrepreneur entrepreneurial
capitalism that we see around us however
it'll never be the sole Focus um or the
sole or the major uh focus of the
capitalist
system the next one which is quite
commonly heard of is called La Fair
capitalism right so La Fair which is the
French word for let do basically means
let people do as much as they want with
minimal interference from the state
right it's the complete absence of State
intervention in the market so ideally
what this means is that the government
takes a step back and they're like right
let the market do what it wants to do we
are not going to intervene we're not
going to set things we're going to try
and not have state-owned Enterprises in
the market let it do its own thing right
and let's see what happens and there is
a paradox that's created in La Fair
capitalism in that the opposition to
government intervention um in the hopes
of maintaining the competitive free
market will eventually create the need
for government intervention in order to
preserve competitive competitiveness
within the market right so if it's so
free there may be situations where
people don't have a need to compete with
each other and then as we've discussed
earlier if there's people not competing
with each other it's probably less
efficient right U which was a drawback
of Communism as we remember so the
government May then need to intervene to
create competitiveness by maybe in
inserting a state-owned Enterprise or
something of that
nature the sixth type is welfare state
capitalism so what happens here is the
government plays a major role in welfare
state capitalism and unlike in state
guided capitalism welfare state
capitalism is based on using the state
to redistribute some of the resources of
the economy what happens here is that
the competitive private Market continues
to operate but taxation is used to
provide for people who have not
succeeded within the market these
resources include money um with people
receiving unemployment benefits support
for raising children and however it may
include direct provision of services
such as Healthcare and education right
so it reminds me of South Africa in a
way and proper examples are Sweden
Norway and Finland
when a welfare state is very well
controlled and very well regulated it
works better than any other form in my
opinion of capitalism right this is my
favorite kind of economic system because
if you see the way these um Norway
Finland Sweden Etc operate it is
incredibly efficient right um the
standard of Education the standard of
healthare all of that is incredibly high
so there are some real benefits to
welfare state capital capitalism that
exists within a setting of having good
resources and having good policies uh so
it does work out quite well in that in
that instance so
yeah and of course it is important to
recognize that um capitalism is all
around us right it's everywhere um we
are often we we exist within a
capitalist system and whether we being
persuaded by the media we consume the
music the on TV other people no matter
what we do we can't escape this
capitalist system and for those who have
won the race of capitalism such as Maybe
little way or R Ross it's very diff What
They then do is they persuade others to
continue the race right cuz it is a rat
race that is essentially what it is and
all we do is we look to the winners of
the Rat Race and then we want to be
there and then once we eventually get
there we look down the people below us
and we try to encourage them to get to
the top as well it's very hard to ex to
remove yourself from the system you know
we always encouraged to get money and do
this and do that uh and prosper you know
and sadly it is the only way to survive
I suppose so it is a shame that that is
the way the world has become but it's
it's almost silly now to want to uh
exist as a communist within a current
capitalist State because then it's doing
nothing for you you know so there's a
lot of people that I see that still hold
communist beliefs that they want to be
communist Etc um they believe in
equality and all of that all that's good
and okay but that's not going to do
anything for you in the current system
uh so yeah it's uh the point of the
suggest say that you know what
capitalism is everywhere uh and it's
something we whether you like it or not
it's something we have to subscribe to
because we don't have an option so
that's what it is currently and of
course I had to put in a little critique
of capitalism as well uh my team for
keran has uh we've changed our name to
to pumper butterfly which is an album by
Kendrick Lamar for those of you don't
who don't know and uh I think that's an
appropriate name you know so I had to
find a little bit of a song there to
link uh just to link something you know
so This song is called Wesley Theory uh
it's by Kendrick Lamar and you should
listen to it if you do get the
opportunity but what Kendrick does is a
very interesting critique of capitalism
right so what I've taken here is I've
highlighted a few lyrics that I think
are worth pointing out you know um so on
the yellow highlights what Kendrick does
is he shows the pull of capitalism or he
shows the attractiveness of it you know
by saying what you want you know a house
a car 40 acres a mule a piano a guitar
um look at all of these things right
right so um too much and enough both we
know get it all you deserve it all of
these are the the pull of capitalism the
narratives that exist making us believe
that capitalism is what we need it's
what we want we can get what we want if
we just work a bit harder we're able to
get whatever you know um and then in the
green highlighting what he does
highlight is that despite the pull of
capitalism there's always going to be
drawbacks um such as taxation right so
everything you buy taxes will deny or he
also speaks about the fact that the
American government no matter what is
going to crack down on you um you know
that's what the last line refers to it's
going to crack down on you regardless so
what he's saying is that capitalism has
all this pull and this freedom and this
nice life that it paints but when it
does that and when it draws you in it
doesn't tell you about the drawbacks of
it you know it's only when you are too
far in and too far immersed in it that
you start to see the problem with being
stuck in the system and by then it's
probably too late you just have to exist
within it so I think that's a very
interesting uh way to look at it you
know there's um there's possibilities to
there's there's obviously Pros to it as
well you know but um I suppose that's
just the way it is you know it's it's up
for
interpretation okay so what should you
know at this point so you should have an
idea of what capitalism is and what
communism is you should be able to
Define it that table from the first few
sides is quite important so that gives
you a good idea you should know some of
the pros and cons of them you should be
able to have an understanding of the
history behind communism and capitalism
um and that's useful in debating
especially if you find yourself arguing
from the point of Communism or
capitalism it's useful to have a
historical background for it you know to
provide context and then I hope you also
understand some of the types and
modernly application of capitalism you
know where we can see it and that is
generally um where a lot of debates do
happen currently you know we get a lot
of debates about um welfare states and
Welfare and um you know um businesses
and Entrepreneurship all of that right
so that becomes very relevant then uh so
it's useful to have an understanding of
the context of where those are used in
order to apply it
best here is some references but you can
do more reading okay and thank you very
much that concludes this lecture on
capitalism versus communism hopefully
you've learned something and I'll catch
you in the next one
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