Hollywood Popular Artists

Jul 2nd 2012, 20:23

45 million 18-29 year olds will be eligible to vote in this year's presidential election, representing the largest potential voting bloc in the country. Learn more about the issues, register to vote and get involved with MTV's Power of 12. Today, we've got another Jargon Buster"for you.

capitalism, noun: An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Layman's terms: Individuals and corporations -- not government -- have the primary power to set a nation's wealth.

We can break this one into three parts:

1. Private ownership of capital goods
All this talk of privacy doesn't indicate secrets or undergarments. "Private," here, means that citizens are responsible, that government does not have control. Capital goods are the raw materials used to make the things consumers buy -- machines and materials, for example. In capitalism, people and companies get to own the car factories or the chocolate factories (and chocolate bar ingredients) that sell stuff people buy.

2. Investments determined by private decision
Again, no secrets or undies here. Private decision means that entrepreneurs and businesspeople get to run their businesses freely. Of course, there are ethics standards, but the government isn't going to tell Willy Wonka how to fund his golden tickets or how to produce an Everlasting Gobstopper. Washington won't give a price cap for motor vehicles (much to Lamborghini's relief).

3. Prices, production and distribution of goods are determined by a free market
The freedom to make their own investments also gives businesses the freedom to price and produce and sell their products however they please (within reason, of course). Car companies might look around, see what people are paying for a minivan these days, and set their price tag accordingly -- ideally, in such a way that will lure shoppers toward their lot. Wonka can sell his fizzy lifting drinks from street carts and/or in Walmarts. Decisions!

The point: Capitalism promotes competition; competition sets our economic tone. Unlike competitive sports, free market competition rarely has a long-lasting "winner." Trends change, power players change, and through it all, the people, not the government, set the scene.

FYI: Understanding the definitions of different economic systems is especially relevant given campaign season talk.

And now you know. Get out there, you crazy entrepreneurs! America needs more innovative chocolate bars.

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