Dylan LaPointe 11/6/2008
Election Reflection
As one would expect, I am quite pleased with the outcome of this years election. It is truly a historic moment in American history, and I believe that the election of an African American into the presidential office has definitely affected the morale of African Americans and individuals who voted for him alike. However, seeing that people are creatures of habit, I think it will do little to change peoples ways. Obama says that it is up to the American people to create their own change. He cannot simply even the economic playing field and raise the lower class up from the depths of poverty while restricting the incomes of wealthier Americans. People will actually have to work and that’s what I think people don’t get. Just because we have finally elected a liberal African American as president doesn’t automatically grant immense societal change.
I am also a somewhat bothered by peoples myopic fixation on his being black. I hear far more about his race than his actual political rhetoric. This is not to say that I don’t think he will be a fine president, I am just mildly dissatisfied with how so much of America perceives him.
I agree with Andy that Obama was not up against much of a candidate this election. Sure Obama won… with 52% of the popular vote, the other 48% of which went to those who do not support Obama. Obviously he cannot change America in a matter of days, but with 48% of Americans who are not supportive of his leadership how will his plan work. Seeing that we are in the largest economic depression since the great depression, he is bound to make choices that not everyone will agree with. I am certain that people will change their opinion towards him throughout his term, be it against or in favor of him.
Thursday, November 6, 2008
The Basics of Capitalism
Capitalism
The traditional definition of capitalism is: An economic system based on private property and the profit motive in which goods and services are produced distributed and consumed through markets. Capitalism promotes economic growth and gives people the incentive to work harder. This pursuit of success can bring around technological innovations. Capitalism is largely controlled by market forces, where the government is hypothetically less involved. It can also strengthen foreign relations through company controlled trading through the free market. It also lacks a centralized system of coordination so ideally everyone living in a capitalist society works together and is not controlled by some higher power. Governmental manipulation of capitalism can result in market distortions such as shortages and surplus’, thus it is a system controlled largely by the citizens themselves.
For example, if the government initialized price control in a time of price gouging, the companies would be charged more to reduce the risk of large business owners taking advantage of their customers in a time of distress. It sounds all peachy and good, but in doing this the company will import less of their product which would cause a shortage in that type of product. Lets say the government placed price control on water filtration and bottling companies. The results could be disastrous.
In an odd situation a company could use a product shortage to their advantage. Take for instance, the Nintendo Wii. Nintendo intentionally sent out fewer Wii consoles than they knew people would buy, thus, making the public aware of the shortage. “If the Wii’s are selling that quickly then they must be good.” In doing this they made people want to buy it more. One could say that people always want what they cannot have. This is not necessarily bad, but in a way it is manipulative
However, government intervention of capitalism has it’s own benefits. In a capitalist system where there is no regulation, companies can take advantage of their customers and abuse their power. In the case of the Lehman brothers, some of the individuals owning the company Had the government intervened and disallowed them absolute control of the company, it is more likely that this huge economic crisis would not have happened. By forming companies that more closely resemble the check and balance system that runs the American government, one could deprive people like the Lehman brothers of such power.
The defining aspects of capitalism are the land, labor, and capital. The land is the most important aspect of capitalism, for it provides companies the raw materials to make anything. The labor is obvious, it is all of the work that goes into the creation and distribution of a product. Lastly, Capital iswhat one uses to transfer the raw materials into the product, and the money or tools to make profit. (ex: a factory, money, etc…). The second most basic aspect of understanding capitalism is supply and demand. Supply is the availability of a commodity at all prices, and demand is the amount purchased of a commodity at all prices. The point at which the lines intersect is the equilibrium price, a situation in which prices are stable. If America were to encounter a shortage of some sort, the supply would reduce, and the demand would stay the same, but the product would be much less available. If there were a surplus, there would be an excess of a product and the demand still would not change. However if demand increases then a company may be forced to increase their supply or increase their prices to make more profit for less. This seldom happens with companies that sell commodities (a product that is perfectly substitutable) because they do not have the same demand as monopolies (companies that supply the only available of certain type of product. Ex: Electricity, Mac’s, etc…).Commodities are forced to compete with each other, often resulting in a decrease in price which would provide the company with less profit. Monopolies on the other hand are able charge whatever price they want because they have no competition.
In a capitalist society we are all turning gears in this clockwork mess, and without equal contribution of each element, society would fall apart. This system does not start anywhere in particular, but begins due to a mutual agreement amongst peoples of one nation to organize society as such. As if guided by an invisible hand we follow through with the principal of capitalism out of self interest. It is here that the gears of the clock start turning, and the capitalist system begins. Workers sell their land labor and capital to the factor market where the factors of production are sold to the businesses. Those businesses sell the goods and services that we have generated to the product market where it is finally bought by the workers who initially created it. We as the workers are equally important to the cycle as the businesses for without workers, who would sell the land labor and capital. Not only are we part of the product creation, but part of the cycle of wealth. The product market buys goods and services from the businesses resulting in profit which is then spent on paying for more factors of production generated by the factor market. The factor market receives it’s land labor and capital from the workers which supplies the workers with income so they can buy from the product market.
Seeing that one of the main factors of capitalism is the profit motive, people desperately try to make more and more money. Companies will do just about anything to make more money, even, in a majority of situations, use cheap foreign labor so that they spend less on the actual creation of the product while drastically overcharging the consumer so that they can make more profit. The fact is, Americans are expensive labor whereas a little Chinese boy charges far less for the same quantity of work.
The companies themselves have their own cycle through which they gain greater wealth. They start with their initial profit, which they save so that they can later invest in capital (advertisement, product upgrades) which produces greater profit. The company saves that up which creates even greater wealth. Because many large companies use cheap foreign labor it boosts their overall profit.
Thank goodness that cheap labor isn’t our only connection with foreign nations. Buying products from other countries can actually reduce price. We buy most of our fruit from foreign countries, not because the labor is cheaper, but because other countries have environments that are more suitable for certain fruits. If fruit trade was cut between foreign countries then many fruits would be far more far more expensive. Seeing that our environment does not suit the agricultural needs of all types of fruits, it would be far more difficult and expensive to farm foreign plants. That is the reason why organic fruit is so expensive. The only way that a piece of fruit could survive a trip across the ocean is with pesticides and other preservatives. By buying from other countries we save ourselves money.
The traditional definition of capitalism is: An economic system based on private property and the profit motive in which goods and services are produced distributed and consumed through markets. Capitalism promotes economic growth and gives people the incentive to work harder. This pursuit of success can bring around technological innovations. Capitalism is largely controlled by market forces, where the government is hypothetically less involved. It can also strengthen foreign relations through company controlled trading through the free market. It also lacks a centralized system of coordination so ideally everyone living in a capitalist society works together and is not controlled by some higher power. Governmental manipulation of capitalism can result in market distortions such as shortages and surplus’, thus it is a system controlled largely by the citizens themselves.
For example, if the government initialized price control in a time of price gouging, the companies would be charged more to reduce the risk of large business owners taking advantage of their customers in a time of distress. It sounds all peachy and good, but in doing this the company will import less of their product which would cause a shortage in that type of product. Lets say the government placed price control on water filtration and bottling companies. The results could be disastrous.
In an odd situation a company could use a product shortage to their advantage. Take for instance, the Nintendo Wii. Nintendo intentionally sent out fewer Wii consoles than they knew people would buy, thus, making the public aware of the shortage. “If the Wii’s are selling that quickly then they must be good.” In doing this they made people want to buy it more. One could say that people always want what they cannot have. This is not necessarily bad, but in a way it is manipulative
However, government intervention of capitalism has it’s own benefits. In a capitalist system where there is no regulation, companies can take advantage of their customers and abuse their power. In the case of the Lehman brothers, some of the individuals owning the company Had the government intervened and disallowed them absolute control of the company, it is more likely that this huge economic crisis would not have happened. By forming companies that more closely resemble the check and balance system that runs the American government, one could deprive people like the Lehman brothers of such power.
The defining aspects of capitalism are the land, labor, and capital. The land is the most important aspect of capitalism, for it provides companies the raw materials to make anything. The labor is obvious, it is all of the work that goes into the creation and distribution of a product. Lastly, Capital iswhat one uses to transfer the raw materials into the product, and the money or tools to make profit. (ex: a factory, money, etc…). The second most basic aspect of understanding capitalism is supply and demand. Supply is the availability of a commodity at all prices, and demand is the amount purchased of a commodity at all prices. The point at which the lines intersect is the equilibrium price, a situation in which prices are stable. If America were to encounter a shortage of some sort, the supply would reduce, and the demand would stay the same, but the product would be much less available. If there were a surplus, there would be an excess of a product and the demand still would not change. However if demand increases then a company may be forced to increase their supply or increase their prices to make more profit for less. This seldom happens with companies that sell commodities (a product that is perfectly substitutable) because they do not have the same demand as monopolies (companies that supply the only available of certain type of product. Ex: Electricity, Mac’s, etc…).Commodities are forced to compete with each other, often resulting in a decrease in price which would provide the company with less profit. Monopolies on the other hand are able charge whatever price they want because they have no competition.
In a capitalist society we are all turning gears in this clockwork mess, and without equal contribution of each element, society would fall apart. This system does not start anywhere in particular, but begins due to a mutual agreement amongst peoples of one nation to organize society as such. As if guided by an invisible hand we follow through with the principal of capitalism out of self interest. It is here that the gears of the clock start turning, and the capitalist system begins. Workers sell their land labor and capital to the factor market where the factors of production are sold to the businesses. Those businesses sell the goods and services that we have generated to the product market where it is finally bought by the workers who initially created it. We as the workers are equally important to the cycle as the businesses for without workers, who would sell the land labor and capital. Not only are we part of the product creation, but part of the cycle of wealth. The product market buys goods and services from the businesses resulting in profit which is then spent on paying for more factors of production generated by the factor market. The factor market receives it’s land labor and capital from the workers which supplies the workers with income so they can buy from the product market.
Seeing that one of the main factors of capitalism is the profit motive, people desperately try to make more and more money. Companies will do just about anything to make more money, even, in a majority of situations, use cheap foreign labor so that they spend less on the actual creation of the product while drastically overcharging the consumer so that they can make more profit. The fact is, Americans are expensive labor whereas a little Chinese boy charges far less for the same quantity of work.
The companies themselves have their own cycle through which they gain greater wealth. They start with their initial profit, which they save so that they can later invest in capital (advertisement, product upgrades) which produces greater profit. The company saves that up which creates even greater wealth. Because many large companies use cheap foreign labor it boosts their overall profit.
Thank goodness that cheap labor isn’t our only connection with foreign nations. Buying products from other countries can actually reduce price. We buy most of our fruit from foreign countries, not because the labor is cheaper, but because other countries have environments that are more suitable for certain fruits. If fruit trade was cut between foreign countries then many fruits would be far more far more expensive. Seeing that our environment does not suit the agricultural needs of all types of fruits, it would be far more difficult and expensive to farm foreign plants. That is the reason why organic fruit is so expensive. The only way that a piece of fruit could survive a trip across the ocean is with pesticides and other preservatives. By buying from other countries we save ourselves money.
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