Subtopic 3.2 explores the complex and sometimes dark relationship between markets, capitalism, and eroding social and ecological systems. Capitalism is defined as an economic system focused on generating maximum profit for capital owners, where markets dominate as the primary provisioning institution. You’ll understand how capitalism developed through historical processes like enclosure and colonisation, supported by an emerging human-nature dualistic worldview.
The subtopic also explains the role of laws in enabling market activities, including the creation of trust and the reinforcement of power structures through private property rights and legal personhood. The subtopic critically examines market power, highlighting the various forms it can take, such as monopolies, and the strategies businesses use to enhance their power. It concludes by addressing the moral limits of markets, particularly how market activities can worsen economic inequalities and undermine key social values.
At the end of Subtopic 3.2 Markets: capitalism, power and inequality, you should be able to:
define capitalism and distinguish capitalism from markets
explain how capitalism developed through processes of enclosure and colonisation and the worldview of human-nature dualism
discuss the positive and negative consequences of capitalism
outline the role of economic narratives in supporting capitalism
explain how laws support freedom in market exchanges and the importance of fairness for the rule of law
discuss how private property rights enable market activities and how they can reinforce power and inequality
discuss how legal personhood and limited liability enable market activities and how they can reinforce power and inequality
define market power and describe various forms including monopoly, monopsony, oligopoly and oligopsony
explain the strategies that businesses use to increase market power
discuss the economic, social and ecological consequences of increased market power
discuss the ethical issues involved with using markets as a provisioning institution, including the impact on economic inequality and the crowding out of important social values