Research Assignment Topic 3: The Two Realms of Capitalism

The Two Realms of Capitalism
Student Name:
Professor:
Course title:
Date:
The Two Realms of Capitalism
Capitalism is essentially a political and economic system wherein the trade and industry of a country are controlled not by the state, but instead by private owners for profits. In this system, factors of production are owned by individuals, enterprises and other private entities (Scott, 2009). Robert Heilbroner is one of the most well-known economists who extensively discussed the system of capitalism in his paperback titled Twenty-First Century Capitalism. In this book, Heilbroner (1992) identified two realms of capitalism. He pointed out that these two are both dysfunctional and beneficial for the society. This paper provides a discussion of what he meant by this and how it is truly possible. In addition, the paper discusses how capitalism’s contribution to the society has been more negative or positive.
Heilbroner’s Two Realms of Capitalism
The two realms of capitalism that Heilbroner (1992) identified are the government or state on one hand, and the business or economy on the other hand. The relationship between the government/state realm and the business/economy realm is interesting given that one aspect of this relationship makes them dysfunctional for the society, whereas another aspect of the relationship actually serves to make them beneficial for the society. According Heilbroner (1992), the realms of the economy/business and the government/state are of benefit to the society only when these two realms are dependent upon each other. This is because when they are reliant on one another, they are able to support each other. This in turn leads to a peaceful state and economy of a society. Conversely, the realms of the economy/business and the government/state are able to proceed separately without having to rely on one another. When they split, however, Heilbroner (1992) pointed out that they would become dysfunctional for the society given that the government may block the path of the economy/business to grow in a free manner, and the economy would not survive separately by itself without the state’s support leading to a weak economy.
Under the system of capitalism, the private sector controls the economy of the nation or state. Capital and land are owned privately by individuals or by private companies. The government’s involvement in the economy is limited (Sternberg, 2015). In essence, the state may only be involved when it is required to protect the rights of properties and contracts of people. In this economic and politic system, workers and employers have the freedom of seeking their own self-interests. A notable characteristic of capitalism pertains to its goal. Heilbroner (1992) pointed out that the elusive goal of any capitalist country in the world is to simultaneously secure stable prices for goods/services and high rate of employment amongst its citizens. With such an idea, an ideal capitalist society is able to effectively provide job opportunities to the people and simultaneously allow individuals to seek profits all whilst sustaining stable prices. The prices of goods are kept steady by means of mass production of products which is only possible through si...