Tarun Patel
18685457
Exam #2
"A capitalist economy may turn out factory goods for farm products, tanks or teletubbies. What is capitalist about it is how it is organized."
First, capitalism is an economic system where the private owners of capital goods, employers, hire wage labor to produce commodities for the intention of making a profit. In this system, there are two main classes, workers and capitalists, even though there are other classes such as middle class. A commodity is any good or service that is produced with the purpose of selling it in order to make a profit. Privately owned capital goods are machines, buildings, offices, tools, and other things needed in production and whose owner, due to a property right, decides how the property will be used. Profit comes in a form of surplus product in a capitalist economic system. It is what is left over, out of sales revenue after all the wages, the costs of materials used up, and wear and tear on machines have been paid. Secondly, a class is a group of people who share a common position in the economy with respect to the production and control of the surplus product. In a capitalist society, there are two classes, those that produce the surplus product and those that control its use of the product. So, a class relationship exists between the producers of the surplus product and those who control the use of the surplus product.
This quote means that a capitalist economy is a capitalist system because of how it produces a product, not what it produces. Slavery, feudalism, self-sufficient households, and capitalism are economic systems because they organize labor processes. That is the main factor that makes an economic system. These economic systems are different from one another because ...