Firms should not be owned and managed by people who survive because of their connections to government or their privileged birth: Capitalism is dynamic when owners or managers succeed because they are good at delivering high-quality goods and services at a competitive price. This is more likely to be a failure when the other two factors above are not working well.

James Bronterre O’Brien, told the people:‘Knaves will tell you that it is because you have no property, you are unrepresented. I tell you on the contrary, it is because you are unrepresented that you have no property …’16

A thousand years ago, the world was flat, economically speaking.

"Some inequality of income and wealth is inevitable, if not necessary. If an economy is to function well, people need incentives to work hard and innovate.The pertinent question is not whether income and wealth inequality is good or bad. It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy." - Robert Reich

Economy, Society, and Public Policy

In 1968, Garrett Hardin, a biologist, published an article about social dilemmas in the journal Science, called ‘The Tragedy of the Commons’.

social dilemma A situation in which actions, taken independently by individuals in pursuit of their own private objectives, may result in an outcome that is inferior to some other feasible outcome that could have occurred if people had acted together, rather than as individuals.

In some, their spending on goods and services as well as on transfers like unemployment benefits and pensions, accounts for more than half of GDP.

Yet some things that we value are not private property—for example, the air we breathe and most of the knowledge we use cannot be owned, bought, or sold.

Figure 1.16

We should be sceptical when anyone claims that something complex (capitalism) ‘causes’ something else (increased living standards, technological improvement, a networked world, or environmental challenges), just because we can see there is a correlation.

Market competition provides a mechanism for weeding out those who underperform.

Capitalism is an economic system that can combine centralization with decentralization.

Government bodies also tend to be more limited in their capacity to expand if successful, and are usually protected from failure if they perform poorly.

Yet some things that we value are not private property—for example, the air we breathe and most of the knowledge we use cannot be owned, bought, or sold.

First, because capital goods do not fall from the sky: all countries that have successfully moved from poverty to affluence have done so, of necessity, by accumulating large amounts of capital. We will also see that a crucial feature of capitalism is who owns and controls the capital goods in an economy.

First, because capital goods do not fall from the sky: all countries that have successfully moved from poverty to affluence have done so, of necessity, by accumulating large amounts of capital. We will also see that a crucial feature of capitalism is who owns and controls the capital goods in an economy.

If you have never seen an ice-hockey stick (or experienced ice hockey) this shape is why we call these figures ‘hockey-stick curves’.

But some have taller skyscrapers at the back, meaning a greater disparity between the top 10% and the rest of the population, whereas others have a less steep profile.

PPP

Cyril Ramaphosa

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