In the 18th and 19th centuries, the development of modern capitalist societies in Western Europe and the United States of America led to the Industrial Revolution and the establishment of the factory system. Critics of capitalism argue that it concentrates power and wealth in the hands of a minority group, the capitalist class, who profit from the exploitation of workers and prioritise profit above what's best for society, sustainability and the environment. This description of the free market was popularised by Scottish economist, Adam Smith, in his 1776 book, The Wealth Of Nations.īut, not everyone agrees with Smith. And whenever enough people demand something, it will be supplied by the market. Supporters believe that where people are left alone to buy and sell freely among themselves, traders compete with each other and the best goods are offered for the best possible prices. This is based on supply and demand of goods and services. The most common is free market capitalism. In practice, there are different forms of capitalism.

Indeed, the rivalry between the two ideologies led to what was known as the Cold War, which lasted for most of the second half of the 20th century. This is very different to communism where the means of production are owned by the community and profits should be shared out according to need. The means of production of all the raw materials,įacilities, machinery and tools needed to be able to produce goods, while workers are usually employed to work for an agreed salary. In capitalism, the means of production are privately owned and operated to make profit for the owners. Instead, it is the spread of respect for the rule of law regime, which has a much longer history than the democratic polity.Capitalism is an economic system based on private ownership. However, it is not the Weber thesis linking religion with modern capitalism or economic growth that appears most promising today when enquiring into cultural effects. Yet, one may probe into the relevance of the concept of a set of civilisations for mankind in the period of globalisation. Theories of political culture have typically refrained from a reinterpretation of the idea of civilisations, as a few well-known traditional approaches to this concept have been severely criticized.

Global Capitalism Institutional Economics Political Culture Civilisations Economic Growth Rule of Law Weber’s Thesis Marxist Approach Low and High Politics Principal-Agent Problematic Due Process of Law Economic Sociology

Chicago: University of Chicago Press.Ĭivilisations and Capitalism: On Economic Growth and Institutions

Capitalism and freedom