University of California Los Angeles Capitalism & Socialism Discussion Reflection
Description
Discussion Questions (Unit 1) You will have 10 minutes to talk about each question. We will rotate groups after each one so dont move on to the next question. Make sure that each person in your group has a chance to talk. Your cameras must be on throughout the conversation. After the discussion is over, write down a brief (~1 page double spaced) reflection on the most interesting parts of your conversation and post this on Bruin Learn. This does not have to be polished (but should be coherent) – just write the first things that come into your mind after the discussion.
1. Regardless of your personal views on capitalism, what do you see as the biggest benefits of the capitalist system relative to other economic systems? What do you see as its biggest flaws? Alternatively, you can think of this question as asking: if you had to make the case for capitalism, how would you defend it? If you had to argue against capitalism, how would you critique it?
2. We have spent a good deal of time talking about the role of profit in the economy. On one hand Marx and his followers see profit as a sign of exploitation. On the other side Mises sees profit as a sign that entrepreneurs are satisfying consumer needs. To what extent do you think these interpretations are accurate?
3. The market socialism debate touches on a larger debate about economic theory. To what extent do you think it is possible to use economic theory to improve economic policy in the real world? Are there any dangers in taking the results of economic models too seriously? How should economic models be used when applying them to reality? As you answer this question, think about the differences in the way Lange and Hayek view the role of economic models. Which side do you fall on?
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You will have 10 minutes to talk about each question. We will rotate groups after each one so
dont move on to the next question. Make sure that each person in your group has a chance to
talk. Your cameras must be on throughout the conversation.
After the discussion is over, write down a brief (~1 page double spaced) re ection on the most
interesting parts of your conversation and post this on Bruin Learn. This does not have to be
polished (but should be coherent) – just write the rst things that come into your mind after the
discussion.
1. Regardless of your personal views on capitalism, what do you see as the biggest bene ts
of the capitalist system relative to other economic systems? What do you see as its biggest
aws? Alternatively, you can think of this question as asking: if you had to make the case
for capitalism, how would you defend it? If you had to argue against capitalism, how would
you critique it?
2. We have spent a good deal of time talking about the role of pro t in the economy. On one
hand Marx and his followers see pro t as a sign of exploitation. On the other side Mises
sees pro t as a sign that entrepreneurs are satisfying consumer needs. To what extent do
you think these interpretations are accurate?
3. The market socialism debate touches on a larger debate about economic theory. To what
extent do you think it is possible to use economic theory to improve economic policy in the
real world? Are there any dangers in taking the results of economic models too seriously?
How should economic models be used when applying them to reality? As you answer this
question, think about the di erences in the way Lange and Hayek view the role of
economic models. Which side do you fall on?
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4. Each person go around and talk about the topic of your essay and the argument you made.
What did you learn from researching and writing your essay?
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Discussion Questions (Unit 1)
Running Head: CAPITALISM
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Capitalism
Introduction
In the United States, numerous parties have defined and created effective platforms for
understanding how businesses interact with consumers and regulators. Economists have provided
diverse viewpoints and perceptions about understanding the current trends witnessed within their
immediate and global environments concerning business operations. These viewpoints represent
the different approaches that define the relationships between consumers, businesses, and
government. One of the famous economists who will form the foundation for this project t is
Adam Smith. Adam Smith is reputable for his contributions towards the economic models used
today in modern environments. His contributions range from business operation theories to
economic models that influence the decisions made concerning profits maximization and wealth
creation. Among the areas to which Smith has contributed is wealth creation. Wealth generation
and sustainability is essential tool that enhances business success. When applied to the larger
environment, wealth generation allows and empowers governments to promote economic
development. Smith is one of the parties who examined the capitalistic dimensions of wealth
creation within the national and international dimensions. His arguments against the foundations
of international trade can be examined to show the potential weaknesses and benefits in
promoting efficiency and sustainability in wealth management. While Adam Smith opposed
mercantilism, it is considered the most effective approach for countries to generate and sustain
wealth through international trade while encouraging fairness in the global and local markets
(Magnusson, 2019).
Analysis
CAPITALISM
2
One of the issues witnessed within the country is the need for balancing trade between
nations. International trade ensures that countries maintain the ideal connection by delivering
products and services in exchange for wealth creation. Numerous models and experts have
offered their viewpoints on international trade and balancing imports and exports. However, the
traditional approach is mainly used today to define the best ways a country can maximize its
wealth generation. Adam Smith is one of the parties who opposed the concept, which allows
countries to maintain a surplus in trade when dealing with international platforms and markets as
a practice for accumulating wealth (Weingast, 2018). The reasoning behind this argument was
that trade is a practice that should expand opportunities for achieving better returns in various
markets. His argument shows that international trade is an essential practice that allows
businesses and countries to expand their operations, earning more returns. Similarly, trade allows
nations to access resources produced at a lower cost in other environments in line with the
concept of comparative advantage. Therefore, it is essential to maintain effective trade on the
international platform because it allows nations to access expanded markets while promoting
effective relationships which generate more wealth through the expanded markets.
Smith criticized the concept of maintaining a trade surplus over the other nations
claiming that it violated the fundamental principles of international relations and comparative
advantages. This argument offered a foundation for examining the potential malpractices which a
nation may engage or develop to sustain a positive trade relationship with the rest. Similarly,
Smith argued that such a practice might undermine the expansion of markets within each
country, denying the possibility of achieving better returns from a wealth creation dimension.
However, this argument can be refuted considering the economic benefits associated with
mercantilism. When viewed from the modern dimension, mercantilism is associated with various
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CAPITALISM
benefits that allow businesses and entities to achieve the intended goals. From a national level,
mercantilism allows countries to maintain a surplus in their exports, promoting productivity. One
of the benefits of this concept is that it has formed the foundation for developing modern
economic perceptions towards wealth creation at the national level. Countries generate wealth
based on numerous aspects like exports and exploiting their comparative advantages. When a
country increases its exports, it accumulates more wealth. For a country to increase its exports, it
must have reliable internal inputs, which translate into improved quality of life, low
unemployment, and high per capita income in the household setting.
While examined from a modern dimension, mercantilism has allowed many countries to
empower their internal stakeholders to improve their inputs and outputs. Trade remains a
significant factor that is used in assessing the success of a country in achieving the intended
growth and reputation within the global markets. Mercantilism has encouraged governments to
promote private ownership of the factors of production, including capital, natural resources,
labor, and entrepreneurship (Lind & Press, 2018). One issue witnessed within the global market
is the desire to empower the internal stakeholders to maximize their wealth and economic
growth. Economic growth is achieved through various strategies and interventions that support
the contributions made through the local industries.
Conclusion
Adam Smith is one of the reputable players in the economic fields due to his
contributions to understanding global business and international trade. His contributions have
been used to create modern economic theories. One issue that Smith contributed is opposing
mercantilism. This concept, according to Smith, does not sustain long-term trade and wealth
generation in countries. However, for a country to generate wealth, it must empower its internal
CAPITALISM
stakeholders by stimulating input and encouraging maximum outputs. Mercantilism has
encouraged countries to take advantage of their comparative advantages, generating a trade
surplus. The surplus in trade and production has allowed countries to examine more target
consumers, which expands their markets, leading to economic growth.
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CAPITALISM
References
Lind, J., & Press, D. G. (2018). Markets or mercantilism? How China secures its energy
supplies. International Security, 42(4), 170-204.
Magnusson, L. (2019). Mercantilism. In The Elgar Companion to John Maynard Keynes.
Edward Elgar Publishing.
Weingast, B. R. (2018). War, Trade, and Mercantilism: Reconciling Adam Smith’s Three
Theories of the British Empire. Available at SSRN 2915959.
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Explanation & Answer:
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economic theory
market socialism
capitalism
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