Short Synopsis of How Capitalism Works and the Good About It Draft 2

“Capitalism is an economic system based on private property and the profit motive in which goods and services are produced, distributed, and consumed through free markets.” The dominate framework of capitalism is the land, the labor, and the capital; where the land is the raw materials that are used to make the goods or stuff that are needed to make the services possible, the labor is the people who are actually doing the work that is done to process the free market, and the capital is the money or tools used to make profit. Capitalism enables one to make more money if one has the ability to so one does not have to be on the same social class than others. People invest wealth on capital to make profit that turns into more wealth. Some of that wealth is being reinvested onto the capital to make even more profit that turns into even more wealth. In the definition of capitalism, profit motive is the desire to make money. The founder of the apple company wanted to make money and, therefore, created the apple company. The market price is the price buyers and sellers agree on; the price almost always higher than what the buyer wants to buy the product at and lower than what the seller intends to sell the products at. This way, buyers can buy products at a price they wish to pay and sellers can sell the product at a price where they can still make profit. The free market is all about competition and negotiation. The prices in free markets are not set and therefore people can compete and negotiate with prices. "Everyone benefits from lower prices" (Bland). Companies compete to make more money by lowering the prices to try to get people to buy their products. This way, people can buy products at a lower price while companies still make money with the lowered price. Capitalist countries allow “two-for-one special on sleeping bags in aisle three”. The fact that stores close down do not necessarily have to be bad news. “They close down because they can't compete. They can't deliver the quality good at the lowest price. The market mechanism dictates these losers be replaced with the firm that will best serve the public interest.” Capitalism eliminates the stores that carry products with poor quality. Having a capitalist economy provides better products for the people by getting rid of the stores that cannot give the people what they want. Capitalism enables social mobility and is led by the invisible hand. The invisible hand is thought as an actual hand or an angel that comes to lift things and make things work together. Without the invisible hand, people would not be able to work together to get what people want to need. During the 1800’s in a small town of Hamilton, Valentin Keller was a 26 year old, small, 5 feet 6 inches tall tailor (Boaz). Keller had gotten sick a year later and died at the age of 41; his 36 year old wife later joined him a month later. But the rest of his family is taller, heavier, healthier, and living longer today than Keller himself when he was living. Gina Kolata researched and reports the scientific findings and interviews on why Americans today are able to maintain their healthiness compared to Americans in the 19th century. Dr. Robert W. Fogel found that the retirement age was around 85 and now, the retirement age is around 62. Boaz believes that capitalism is the answer to the significant changes between American health today and American health back then. The process of creating more wealth has caused capitalist countries to invest that wealth on sanitation, more than enough food for the people, vaccines, and antibiotics. Capitalism caused better sanitation and better immune system so people today will not get sick as easily.