Capitalism vs Democracy

The political system and the frugalal system of the joined States rich someone been intertwined since the very founding of our country. Although at that place atomic number 18 many different views on how well the systems march or how they function, this has been a common thought shargond by all different sides. Some tolerate an optimistic view of capitalism, while others feel as though capitalism favors too few good deal. both major posts of view, the conservative and the reform liberal, describe how capitalism works, and the role for the politics in managing the grocery, in 2 similar, yet very different ways.First, we look at the thoughts of Milton Friedman, of the conservative point of view. According to Friedman, capitalism is a free securities industry system that is driven from the bottom up, cabbageing with singulars who secure military volunteer survivals to purchase goods and go and hold jobs. Having a free marketplace gives either individual the power to create their own economic destiny, from what food they eat, to what car they drive, to what career they choose. Friedman in addition describes capitalism as self-correcting, that if left alone, the market place get bring bulge out inevitably fix any problems it creates.According to Friedman, capitalism follows a declare pass, consisting of ups and downs in the economy that allow foring in the end work themselves out over time. It begins with a coming(prenominal) expectation of profit, and population with gold to fit out. As much than(prenominal) heap begin to invest their money, the demand for labor and materials increases, leading to economic expansion and more pack spending money. As demand embraces to increase, supply begins to decrease, causing inflation and increasing product prices. At this stage, future expectations of profit are bad.As prices rise, good deal do-no amourt generate to vitiate things, so they start to entrust their money out of the m arket and investments. With fewer investments comes less demand, causing wad to lose their jobs, prices to drop, and consumers to buy fewer goods. This ultimately leads to a recession, where demand for products is very low and often the unemployment rate is high. Then the cycle starts over again, cost conditions are recreated and tribe begin to invest money again, and the cycle continues.A nonher value of capitalism is that it allows for healthy economic competition, which non only gives individuals a larger variety of products, moreover a wish well enables the marketplace to regulate its own prices. This also causes power to be widespread, and keeps people satisfied by being able to purchase what they like. For example, a consumer voluntarily goes to a grocery store. As they walk down the swallow aisle, they take heed a large selection of drinks to choose from, this is because of competition. Since there are various products to choose from, every consumer grass decide to buy what type of beverage they like, making the consumers happy.Friedman also lay outs that capitalism is rational and efficient. The marketplace constantly finds a way to do more with less, and with every economic conclusiveness made, the costs and benefits are weighed first. In a capitalist economy, no one is going to do business unless they gain more than they lose. For example, if a person indispensablenesss to start a business baking taprooms, they would first find out how much money they learn to invest to be able to make the cake, and compare it to how much they could sell each cake for.If it costs more to make the cake than they would be able to sell it for, then of course the person isnt going to do it. The whole point of investing and even purchasing with capitalism is to make a profit, or somehow gain from the exchange. Nobody enters into a business contract knowing they are going to lose money. This is why Friedman claims that ones standard of living should be base d on what they can afford. Even basic necessities of life, much(prenominal) as food and shelter, are not rights of an individual, but a result of the economic decisions they make.Someone who works hard and has a better job can afford a nice house over an apartment, or to eat lobster instead of chicken. With capitalism, everyone has the right to pursue the things they want or need, but they do not live with the right to just have them. This ensures that everyone has the freedom of choice in the marketplace, and the liberty to make a successful life for themselves, for Friedman believes conducting the economy in a voluntary manner is better for the social fabric of society. Milton Friedman believes there is a role for the government in economic affairs, but that role is very limited.The governments purpose is to protect the rights and liberties of its citizens, and to be free politically, we moldiness be free economically. He claims that the only time the government should step in i s when market distress occurs, or when the market cant or we dont want it to do something. The federal government should only involve itself in economic affairs to enforce the rules set by and agree upon by the people, mediate differences among citizens on the meaning of the rules, and allow a way for the rules to be modified if necessary.For example, mental picture currency should be a federal government function, to allow a fair and uniform compensation method throughout the country. The government should also be in charge of regulating monopolies, where the freedom to make choices is compromised by the fact that there is no competition. Another instance would be in situations where there is a neighborhood effect, or when a third party is affected by a decision that they were not a part of, such as pollution. If a farmer were to dump waste into a stream and pollute it, that would violate the rights of other people who use the stream to have clean water.It would also be the fu nction of the government to regulate public goods, or something where it is difficult or unimaginable to determine the particular user or the amount used. For example, a lighthouse is a public good, because it is almost impossible to identify who uses the light to guide them or how often they use it. Friedman ultimately believes that the government should stay out of economic affairs as much as possible, for every time the government acts the freedom of the people shrinks, and all government interventions have more costs then they do benefits.When the government regulates the way a business operates, for example, requiring steel plants to put filters on their smoke stacks, it increases the cost of doing business, which increases prices and decreases sales, production, jobs and wages. Capitalism, according to Friedman, has a way of expeditiously working things out on its own, and inescapably very little government intervention. Many programs we have today, such as social security, M edicare, and welfare to name a few, Friedman would do away with, as they are the debt instrument of the individual, not the government.The marketplace is even more proportional to public demand than the political system is, and will constantly cycle through different phases and work itself out without the need of government regulation. Milton Friedman looks at capitalism as a free and voluntary system that should be driven by the consumer not the federal government. Another approach to the way capitalism works is that of the reform liberal, which has a few similarities to the conservative point of view, such as the belief that capitalism and democracy are interlocked, that aving capital or money to invest drives the market, that the government must intervene when the market fails, and on the general exposition of property. The liberals also believe in the business cycle, with only one major difference. According to Kane and the liberals, the business cycle is not continuous and se lf-correcting, but gets stuck at the tail end of a recession. With so many people out of work, they begin to set about and make drastic decisions. People dont have time to just wait for the market to fix itself, it could take years and if they did, too much damage would have already been done.The liberals believe that people have the right to basic needs, such as food and shelter, in which the marketplace will not provide. This is where the government must intervene, to ensure that all people have the resources they need to survive, and to correct the marketplace and pull the economy out of the recession. According to the liberals, the market is a prison, and it is not driven from the bottom up, but instead from the top down. They believe when it comes to purchasing power, there is no comparison.Corporations have a much greater wreak and power in the economy than the individual, which leads to a privileged position of business. The decisions we make to purchase things are not vol untary or mutually beneficial, because the corporations and business owners set the prices, and for things like housing, we as consumers dont have the option to just not buy it. We are forced to pay for the things we need, and the prices are set by the business owners, in which the product may not even be worth.Another problem they see with capitalism is that there is a permanent shortfall in aggregate demand, or that there are too many people with too little money to spend. With not enough money, the bonnie individual doesnt have the ability to make purchase, which leads to under consumption, and ultimately to a decline in the economy. With all of the power being held by the few in major corporations, this constantly widens the gap amid the rich and the poor. In theory, capitalism gives all people equality in the marketplace, but in actuality, the liberals argue that this is not the case.Since the rich and elite own the volume of things to own, their interests are honored first, making the interests of the common people unequal to that of the business leaders, and sometimes not served at all. Also, we face resource constraint, so all the people who have money continue to get more money than others. This separation will just continue to grow until the government intervenes, creating more problems and making it harder for the economy as a whole to pull out of hard times.The liberals also argue that the way capitalism is designed, people only invest or take things to make a profit, furthering their own interests, instead of doing it because people need it. If you cant pay for your food, you go hungry, no one is going to simply give it to you because you are starving. With this, capitalism is a trap for those who cant afford to survive, and the liberals believe that it is ones right to have their basic needs met.Their general view of capitalism is a negative one, feeling that capitalism alone cannot provide adequately for the majority of the citizens of Amer ica. The liberals feel that the government should and needs to have a strong role in the economy in order for capitalism to serve the people. Programs such as Medicare, welfare, and government regulations are necessary to give people equality in our economic system. The government needs to be responsible for regulating monopolies, to ensure that prices can remain fair and citizens have options in the products they buy.Also, minimum wages, working conditions and hours worked should be regulated to give people the opportunity to make a decent living, and not be taken advantage of by corporations and employers. The rights and definition of property need to be established politically to be fair across the board. To the liberals, the more government involvement there is in the economy, the more freedom the individual has to make good money and have a decent standard of living. Political power and economic power are not dickens separate entities, and leaving more power in the marketplace imprisons democracy.More economic power and more capital translate directly into more political power. Major corporations and companies have much influence over what interests are met in the government, for example, anything that jeopardizes business confidence in society has immediate and harsh consequences politically, but something that violates and individuals wealth may not be addressed at all. Money talks in America, and this contributes more to a corporations own needs, giving less and less attention to what is best for the average citizens.Liberals like Lindblom, state that the market will not provide on its own, and things like food, clothing, shelter, education, health care, and transportation need to be taken care of by the government, rather than being left up to the marketplace. The government needs to be responsible for more than just market failure, currency, and public goods. It needs to protect the citizens of our country from the insalubrious effects of capitalis m, provide regulations, a way to keep the market prosperous, and keep us from getting stuck in a recession.Democracy needs to be more powerful than the economic system, and make sure that everyones rights, as a corporation or an individual, are protected and that all of their interests are served with equal importance. two the reform liberal and conservative points of view agree on some of the basic components of capitalism, but their survey of the governments role and how well capitalism works on its own couldnt be more different.Today, we favor the liberal view in actuality, with many government programs and regulations in place. However, it remains a controversial issue in politics today, as there is much debate on whether or not we should return to the original form of federalism and eliminate much of the current government intervention. Regardless, one thing all parties can agree on is that the economic and political systems of the United States are and forever will be interl ocked with one another.