Capitalism Paper
Capitalism is defined as an economic system in which the means of production are owned by private persons, and operated for profit and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a free market. In his landmark book, Wealth of Nations, Adam Smith outlined the fundamentals and institutions of capitalism. One of the most prominent of these institutions is the “Invisible Hand” or self interest theme.
According to Adam Smith, in a free market each person will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better off than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in a manner that benefited both parties to the greatest extent. In other words, the "invisible hand" represents all the social good incidentally caused by individuals pursuing their own self-interest.
A good example of this “invisible hand” is the flood of Sean Taylor related Redskins items in late November of last year to the Greater D.C. area. After Sean Taylor, a very talented and popular Redskins safety, was tragically killed last November, Redskins stores nearly immediately sold out of Taylor related merchandise. The NFL and the Redskins, in serving their self-interest of making money off of a popular product and preserving the legacy of one of their most popular players, put tens of thousands more memorabilia items into production. The fans, in serving their self-interest of preserving their own memories of one of their favorite players, purchased these new items as quickly as they were placed on the shelves. This exchange was mutually beneficial to both...