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CAPITALISM
An economic system in which capital (the goods or wealth used to produce other goods for profit) is privately owned and profit is reinvested so as to accumulate capital. The dynamics of the economic exchange in capitalism are unique. In a barter system of economic activity a producer may grow a pound of potatoes and barter them for an equivalent amount of honey produced by someone else. In this exchange the goods bartered are of roughly equal value. In capitalism, however, a person uses capital to produce goods and then sells those goods for cash. The amount of cash received is greater than the value of the good produced such that a profit is created allowing for reinvestment in the capital stock and to support the owner and producers. See: CAPITAL / LABOUR THEORY OF VALUE / .

Last updated 2002--0-9-


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Athabaca University ICAAP

© Robert Drislane, Ph.D. and Gary Parkinson, Ph.D.
The online version of this dictionary is a product of
Athabasca University and
ICAAP

*This social science dictionary has 1000
entries covering the disciplines of sociology, criminology, political
science and women's study with a commitment to Canadian examples and
events and names