APUSHistory

Capitalism & Democracy AP US History

1. Capitalism is a political system where individuals have their own private businesses and industries and make their own profit from it. The amount of goods produced is based on supply and demand where the more a product is produced the cheaper it is to buy it and vice versa. The goods they sell cost more then what it took to acquire them. Private owners are free to choose how much they will sell the goods for but they base their prices on supply and demand. They also have the freedom to choose where and when they work. Capitalism allows people to be free about everything they do in life. If you want to be an owner of your own business you have a great opportunity to be it and if you want to be a worker, you can choose what kind of job you would like to do.

2. The United States practices a free market or free enterprise economy. In a free market, the price of goods and services can be agreed upon by two people who value the goods differently, they exchange goods and now both people benefit in the trade. The owner of a business can sell his product for as much as he thinks it’s worth and the buyer can offer as much money as he thinks the product is worth. Depending on whether each has something the other wants, they will agree on a price for the product. A free market doesn’t require any government interference because of this buyers and sellers relationship between the people. There are four levels of free enterprise. The owner class or capitalist class makes production of goods possible. These few people have to be able to pay for the factories, machines, and land. The working class are the people who work for the owners and produce the goods. The laborers get paid with money that they can use in any way they please, not the goods that are being produced. The owners also make rational calculations for profit to help guide production. They try to judge the market and change the amount of goods being produced to benefit them in getting the greatest possible profit. Then there are the consumers who buy the goods that are being produced. The more money owners get the more goods they produce. The more goods they produce the lower the price goes. The lower the price, the more people are able to buy them. For the economy to work without any interruptions the government has to keep peace and order.

3. The U.S. practices capitalism because it is believed to be the best kind of system in the world. People can easily turn their lives around for the best. This system is based on individualism where individuals have the right to economic freedom. It began in the seventeenth century in Europe and can be closely related to the European Enlightenment. The European Enlightenment was based on the idea of individual freedom and for people to do what they wanted to make a profit. The founders established this system because "it was a means of centralizing national strength." Capitalism increases both growth and freedom because more people are motivated to start their own businesses for profit and they can also use the money they earn in any way they need. It increases freedom because the people are free to start any kind of business they would like, they can choose their own hours of work, and they can choose who works for them. America is the land of the free so it would make sense to practice capitalism, a system that is based on individualism.

4. Having capitalism as the economic system benefits many people. It gives them the motivation to change their lives into something better for themselves. For example if you don’t come from a very successful or wealthy family, you can change your life around by studying hard in school and becoming someone you never thought you could be. It also gives people hope that if they work hard in life they can do very well in life. There are many opportunities out there that you could take to change your life for the better such as starting your own business. Another positive of capitalism is that it lets people live their dream by giving them the freedom to do whatever they want and being able to work where they want. Working hard for the things you want in life is a good habit for everyone to have because nothing in life is free or just given to you. There are also the negatives to having capitalism. One of them is that not everyone can improve their life style. Some people are in really bad situations where the kids don’t have a chance to go to school and the parents have been injured or are not able to work anymore. Another negative of capitalism is that there is a huge difference between the rich and the poor. There is no middle class anymore, only the people who have it all and the people who basically have nothing. Capitalism is a good economic system that like everything else has its positives and negatives.

5. Democracy is a system of government that is representing the whole population through elected representatives. "Government is based on the consent of the governed." This system allows the people to have a say in the government by voting on representatives who they believe will represent their views the best in the government. They vote on who will represent the country on a national level and who will represent them on a local level. These representatives are held accountable for their actions in the government and can be removed when their term ends if the citizens don’t think they are expressing their views well. In a democracy people have the power to choose what they want to see in the government. Not everyone can have exactly what they want so to solve that problem, when people vote, the majority rules. Democracy gives freedom to all citizens and freedom of speech is "one of the most important human rights." This gives all citizens have the right to say whatever they want whenever and can express their opinions freely.

6. The United States practices a representative democracy or a constitutional democracy. The U.S. does not practice pure democracy for fear that the citizens will completely rule the government directly. So to prevent that from happening we have a representative democracy where the citizen’s vote on representatives who they believe will express their views the best in the government and make policy decisions in their liking. A constitutional republic limits the power the government has over the citizens. The first 10 amendments protect the citizen’s unalienable rights from an overpowering government. This system of government has four key elements. There is a political system where the citizens vote on choosing and replacing government officials through free and fair elections. The citizens being active in politics and civil life. The protection of all the citizens human rights. And to have all of the laws be applied equally to all citizens no matter what.

7. The United States practices this form of government because it is the most just system where people can speak their mind freely and have a say in what goes into it. Giving the citizens this type of power prevents any type of dictatorship to occur because the people of the nation choose who they want to be in the government. The people choose who goes into the government by voting for the representative who they think will express their opinions the best. The founding fathers chose a representative because they didn’t think the average citizen knew enough about the government or the issues to vote on what was best for the entire nation. This would happen in a direct democracy where everyday people would vote on what would happen in the government. "They believed that a representative democracy was a better alternative and believed that the people would elect the brightest among them to be their representative." "The founding fathers who wrote the constitution gave us a republic. They believed democracies were dangerous and unworkable."

8. There are many positives and negatives of having this type of system. Some of the positives include having the people have a say in the government. This is because the citizens can vote on the issues at hand and the majority wins. Another positive is that the citizens can vote on who they want to represent them in the government. The citizens vote on who they believe is the best and can express their views well. One of the major negatives of having a democracy is that the people can’t tell their representatives exactly what they want. Even though the citizens voted on who would represent them the best, they will never be able to do exactly what everyone wants from them so not everyone can be happy with the decisions the representatives will make. Not everyone can have what they want because in a democracy the majority rules. So if you are not part of the majority you do not get to see what you want in the government. Although not everyone gets exactly what they want in the government, having a democracy allows everyone’s voice to be heard.

9. Michael Moore makes many points throughout his documentary "Capitalism: A Love Story." __Point 1__- Since capitalism revolves around making as much money as you possibly can, companies began to lay off workers as their companies made more money in order for the upper class to make more money. This makes CEOs even wealthier. During Ronald Reagan’s presidency, the richest Americans had their income taxes cut in half while the middle and working class had theirs raised. Bankruptcy and debt rates increased and many people could not afford to live where they were. Meanwhile, the rich were living well off and comfortably. __Point 2__- Wealthy investors started thinking that the United States should be ruled as a plutonomy. This means that the top 1% of the population rules the society. This is not a good idea whatsoever, according to Moore. This would increase the gap between the rich and the poor and cause more tension. It would also destroy the American economy even more. Moore continues to say that the poor in fact have equal voting power with the rich since a vote is a vote. This means that every citizen’s, no matter how much wealth they possess, vote counts. The United States was never intended to run on capitalism based on the Constitution, and should therefore stay on democracy. __Point 3__- Michael Moore tries to prove throughout the documentary that capitalism is a major system of giving and taking. This is mostly done by taking from others for a personal profit. The profit motive makes people money hungry and drives them to desire more and more money, taking as much as they can. Those who have wealth and power will have an easier time gaining more wealth and power rather than the middle and working class and the less fortunate. Capitalism is essentially destroying American economy with this system. It has taken over the economy in a way of greed so that only the rich and wealthy benefit, while leaving nothing for the average American citizens. __Point 4__- Once the stock market crashed, the recession began and even more greed by the richest took place. Corporate executives started taking money from the working class and then became even richer. Many houses went under foreclosures since Americans could no longer afford their mortgages or house insurance rates. Taxpayers had to help bailout banks that fell due to the crash, even though the banks did absolutely nothing for them. Overall, capitalism should be replaced with democracy, or socialism, in order to create a better economy and treat taxpayers and average citizens fairly. Quoted by Moore, "Living in the richest country in the world, we all deserve a decent job, an education, a home, and healthcare." Unfortunately due to greedy banks and capitalists, this is not the case. __Point 5__- President Bush claimed that "capitalism was the best system ever devised." Many believe that capitalism is immoral and against what Americans should be practicing. The system of taking from others should therefore not be in place. Capitalists try and convince the American people that capitalism is the way to go since it encourages people to "strive for the top and make the most that they can."

Michael Moore's arguments in the movie help to prove the point of capitalism in the United States. He interviews citizens, capitalists, congress members and journalists to ask their opinions about capitalism/democracy. He profiles people that have had their house set under foreclosure and shows how capitalists are making more and more money. Many people have different opinions about capitalism, which may cause some tension to viewers. Although he did a good job of explaining how bad Capitalism was he did not at all mention any of the positives about Capitalism. Moor has a tough opinion and is very persistent, which helps him to get his point across but at the same time, he may be too aggressive for some people. This appears as a turn off. I like how he interviewed his father about General Motors. This shows how people are affected by capitalism and how what once used to be on top is now at the bottom. (General Motors)

10. Capitalism and democracy work with one another, as well as work against one another. Democracy helps to hold capitalism together, since democracy essentially involves the people, rather than the economy. The people are what run the economy. This tries to create balance and justice. Of course, democracy and capitalism are more different than similar. Capitalism results in taking from one another and greed. The profit motive is the main goal in capitalism. Democracy helps to create justice among the American people and create fair equality. Capitalism only works when large amounts of money are being made, by the richest Americans, while democracy works together with all citizens, no matter what social class they are in. Democracy is not an individual idea, while capitalism's idea is to "take as much as you can for yourself and forget about everybody else." Democracy is a "rule following" system while in capitalism, you can basically do what you want since you are doing it for yourself anyways. It breaks people apart and causes tension, since money is the root to all evil. This is not to say that democracy is perfect either, since not every citizen has the same opinion about the same subjects. Democracy just tries to hold the nation together and keep the peace, since all the voices of the American people matter, not just what the top 1% has to say.

__Resources:__

Murray N. Rothbard, "Free Market." //__The Concise Encyclopedia of Economics.__// 2008. Library of Economics and Liberty. 31 August 2011. []. Ray, Douglas. "Spirit of Democracy - Fundamental Freedoms - Freedom of Speech." //University of New Brunswick | Canada | Welcome//. Web. 31 Aug. 2011. []. "What Is Democracy?" //Stanford University//. 21 Jan. 2004. Web. 31 Aug. 2011. [].

Lecture at Hilla University for Humanistic Studies Meyers, William P. "America: Republic or Democracy?" //WilliamPMeyers.org William P. Meyers, Bill Meyers on Philosophy, Ethics, Politics, Eduction and the Environment//. 19 Feb. 2002. Web. 31 Aug. 2011. []. Cereijo, Manuel. "CAPITALISM AND DEMOCRACY." //Guaracabuya, Revista Electronica//. Web. 31 Aug. 2011. [].