key term - Capitalism

Definition

Capitalism is an economic system characterized by private ownership of the means of production, where goods and services are produced for profit in a competitive market. This system emphasizes individual entrepreneurial freedom and often leads to wealth accumulation, but it can also result in social inequalities, particularly among different ethnic communities and socioeconomic classes.

5 Must Know Facts For Your Next Test

1. Capitalism often leads to economic growth and innovation due to competition and the pursuit of profit.
2. This economic system can create significant disparities in wealth and access to resources, particularly affecting marginalized ethnic communities.
3. Under capitalism, labor is commodified, meaning that workers sell their labor for wages, which can vary widely based on demand and skill level.
4. Capitalist economies can experience cycles of boom and bust, impacting job security and economic stability for different socioeconomic classes.
5. Globalization has expanded capitalism beyond national borders, influencing local economies and cultures but also leading to exploitation and inequality.

Review Questions

• How does capitalism contribute to the social inequalities observed in different ethnic communities?
  • Capitalism tends to generate wealth for those who already have access to resources and opportunities, which often disadvantages marginalized ethnic communities. These communities may struggle with systemic barriers that limit their access to education, employment, and capital. As a result, wealth accumulation remains concentrated among certain groups while others face economic hardship, reinforcing existing social inequalities within the capitalist framework.
• In what ways does class stratification manifest within capitalist societies, particularly among ethnic minorities?
  • In capitalist societies, class stratification is evident as individuals are grouped based on their wealth, income, and occupation. Ethnic minorities often find themselves in lower socioeconomic classes due to historical discrimination, limited access to education, and fewer job opportunities. This stratification impacts their ability to accumulate wealth and provides less access to essential services like healthcare and housing, perpetuating cycles of poverty and disadvantage.
• Evaluate the impact of globalization on capitalism's role in shaping socioeconomic status across different ethnic communities.
  • Globalization has intensified capitalism by allowing for the rapid movement of goods, services, and capital across borders. While this has led to increased economic opportunities in some areas, it has also resulted in the exploitation of labor in developing countries where ethnic minorities may work under poor conditions for low wages. The interconnectedness brought by globalization can exacerbate disparities between wealthy nations and impoverished regions, influencing the socioeconomic status of various ethnic communities around the world.

Related terms

Free Market: An economic system where prices are determined by unrestricted competition between privately owned businesses.

Class Stratification: The hierarchical arrangement of individuals in society based on wealth, income, education, and occupation.

Neoliberalism: A political and economic philosophy that promotes free-market capitalism, deregulation, and reduction of government spending.