Economic Systems

Summary

This 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

• 🌟 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.
• 🏛 The debate over which system produces the most happiness is subjective and centers on the balance between wealth accumulation and equality.
• 💡 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.
• 🛠 The means of production, including land, labor, and capital, are owned by private entities in capitalism and by the state in communism.
• 📈 Capitalism features supply and demand-driven pricing, while communism has government-controlled pricing.
• 📚 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.
• 🛑 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.
• 🏙️ 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.
• 🎵 Kendrick Lamar's 'Wesley's Theory' is highlighted as a critique of capitalism, illustrating its allure and the eventual realization of its drawbacks.
• 🌐 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.
• 📉 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

00:00

🌟 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.

05:01

📚 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.

10:01

🏛 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.

15:02

🔍 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.

20:03

🤝 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.

25:04

🏦 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.

Keywords

💡Economic Systems

Economic systems are the structures and mechanisms by which a society allocates resources and organizes production, distribution, and consumption of goods and services. In the video, the main theme revolves around comparing two economic systems: capitalism and communism, discussing their definitions, history, and implications on society.

💡Capitalism

Capitalism is an economic system characterized by private or corporate ownership of capital goods, investments that are determined by private decisions, and prices that are set by supply and demand in a free market. The video discusses the advantages and disadvantages of capitalism, including its potential for wealth accumulation and income inequality.

💡Communism

Communism is a political and economic ideology that seeks to establish a classless society where the means of production are owned and controlled by the community as a whole. The video explains communism as an ideology that opposes capitalism, aiming for economic equality and central planning.

💡Means of Production

The means of production refers to the resources used to produce goods and services, typically including land, labor, and capital. In the context of the video, the ownership of the means of production is a key differentiator between capitalism, where they are privately owned, and communism, where they are owned by the state or community.

💡Government Intervention

Government intervention refers to the role and influence of the state in an economy, which can range from minimal in a laissez-faire system to extensive in a command economy. The video contrasts minimal government intervention in capitalism with high intervention in communism.

💡Class System

A class system is a social stratification based on social class, which is determined by social factors such as income, wealth, education, and occupation. The video mentions that capitalism can lead to the creation of class systems due to the accumulation of capital and wealth among certain groups.

💡Innovation

Innovation refers to the process of creating new ideas, devices, or methods to improve existing products or systems. The video highlights innovation as a benefit of capitalism, where the profit motive encourages businesses to develop new products and services.

💡Monopolies

A monopoly is a single entity that dominates a market or specific product or service, often resulting in higher prices and reduced choice for consumers. The video discusses how capitalism can lead to the formation of monopolies, which can exploit their market power to the detriment of consumers and competition.

💡Central Planning

Central planning is an economic system where the government or a central authority makes decisions regarding production, distribution, and pricing rather than these decisions being made by the market. The video explains that central planning is a key feature of communism, where the state controls the economy.

💡Welfare State Capitalism

Welfare state capitalism is a form of capitalism where the government plays a significant role in providing social services and safety nets for its citizens. The video describes welfare state capitalism as a system that uses taxation to redistribute wealth and provide services like healthcare and education, citing examples such as Sweden, Norway, and Finland.

💡Alienation

Alienation in a capitalist context refers to the separation of workers from the products of their labor, as they do not own the goods they produce. The video uses the example of a worker in a shoe factory who cannot claim ownership of the shoes they make, illustrating the concept of alienation.

💡Oligarchic Capitalism

Oligarchic capitalism is a system where a small group of wealthy individuals or families control a disproportionate amount of the economy. The video mentions this as a type of capitalism that can lead to significant economic and political influence, with examples given such as Russia and Ukraine.

💡State-Guided Capitalism

State-guided capitalism is a form of capitalism where the government influences the economy through regulations and direct involvement in economic activities. The video explains that this type of capitalism is characterized by government intervention to guide the market, with China being an example where the state owns a significant portion of the economy.

💡Corporate Capitalism

Corporate capitalism is characterized by large corporations having significant control over markets, often leading to monopolistic practices. The video discusses how corporate capitalism can result from entrepreneurial capitalism, where successful businesses grow and acquire competitors, leading to market dominance.

💡Entrepreneurial Capitalism

Entrepreneurial capitalism emphasizes the role of individual entrepreneurs and small businesses in driving the economy through innovation and risk-taking. The video notes that this form of capitalism can be seen as the purest form, allowing for a wide range of business ideas and initiatives, although it may evolve into corporate capitalism over time.

💡Laissez-Faire Capitalism

Laissez-faire capitalism is an economic system where the government takes a hands-off approach, allowing the market to operate without intervention. The video points out the paradox of laissez-faire capitalism, where the lack of government intervention can eventually necessitate intervention to maintain market competition.

💡Tragedy of the Commons

The tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource. The video uses this concept to illustrate a potential problem with capitalism where resources may be overused without conservation.

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