AWOL - Homework October 27, 2008 - How does capitalism work, and what's good about it?

Capitalism is an economic system that involves laborers who help produce and sell the supply that is within the ‘free market’. Three main parts of capitalism is the land, labor and the capital. The land represents the natural world; everything one would use to make stuff—out of raw materials. Labor is the all of the work necessary to produce and sell the product. Capital is the money or tools used to make profit. Supply and Demand play a role in which supply is produced by the laborers, land and capital and is sold for any price, meanwhile the amount of supply stays the same. Demand is the amount of products purchased by the consumer, at all prices. The process of supply and demand is the profit motive to invest money through private ownership where goods and services are distributed.

In society, Capitalism plays a positive role, in most situations, where competition occurs upon certain companies, such like Microsoft and Apple. Although capitalism does introduce free market, competition does not necessarily allow free market, thus it is not exactly capitalism, or is it? Competition creates an opportunity, for most companies, to expand and make money. Globalization, a comparative advantage, is a process that allows companies to trade and work for other countries across seas to make even more money then they would usually make in the states. However, it is kind of a downfall towards the American community for the simple fact it gives American citizens less opportunity of having or job and having money within the American community. Although Capitalism may benefit most monopolies, in some way it creates a disadvantage towards others, especially companies below the monopolies, when trying to make money.