Pipers Woerterbuch zur Politik

Authors: Nohlen
Summary: The 500 word entry gives a general description of what constitutes a capitalist economic system, and contrasts the Marxian theory with classical economics and Max Weber and Werner Sombart s contributions. The entry identifies three central elements of a capitalist economic system: the means of production are in private hands, the markets for goods and services are decentrally regulated by supply and demand, and profit maximization is a driving force for market participants. Marx developed a theory of capitalism that highlighted the negative aspects. According to him, the working class is exploited and private and societal value is destroyed during economic cycles. The system s inherent contradictions and failures lead in the end to self-destruction and the establishment of a new, socialist, form of production and form of society. The entry establishes that, in contrast, classical economic theory views capitalism as a perfectly self-regulating system with very little need for state intervention in the form of social and public policy. Weber and Sombart , finally, adopted a psychological point of view and focus in their discussion of capitalism on the figure of the dynamic entrepreneur and the Protestant ethic as the motor for capitalist activity. The entry ends with a reflection on the extensive literature critical and skeptical of capitalism, both Marxist and bourgeois.