A capitalist economy is a supply and demand side economy. Adam Smith was the founder of this idea in his book, “The Wealth of Nations,” written in 1776. Capitalism is an economic system based on the principal of no government interference or ownership of the means of production and property. The capitalist economy is the best known to date because it has a tendency for competition to keep the prices of products with in the lines of the needs of the consumers. The idea of capitalism changed the way of the government and gave birth to a new industrial error in the United States. Capitalism is an ideal way of running a society in that the government does not have a large role in the economy, people who act in self interest could bring greater good for the society and trade is based on supply and demand. http://www.hrusa.org/hrmaterials/suste
Supply and demand is the most important part of a capitalist economy. The supply side has a direct relationship with the demand side. If a supply is scarce and the demand for it is high then the value of that product is high. If a supply is in abundance and the demand for it isn’t high then the price of it will be low. In an ideal system, the demand side is equal with the supply side. If they are equal it is affordable and there is a balance that is created. Spending should come from three places according to Karl Marx. Those places are from the consumers, the government and businesses.
Consumers are the ordinary everyday working class citizens. Every consumer has to earn money to achieve buying things that they need. To create jobs resources are needed to be produced. Resources are produced and adjusted to fit the demands of the p
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