The nature and power of Capitalism

The real father of Capitalism is generally thought to be Adam Smith,based on his seminal work, The Wealth of Nations. The famous remark in this great works is that each individual if driven by his or her own self interest would as if being lead by an invisible hand do what was best for SOCIETY. Therefore, the greater good was definitely in the mind of Smith. The MEANS served the END, and the end was the greater good for society. In this meaning, self interest was believed by Smith to be integrally compatible with and actually responsible for the betterment of all men and women in Society.

Neveretheless, the market structure envisioned at the time was the pure competitive model of limitless firms in the market, none of which could on its own impact the price of their product, and all prices being driven by market supply and demand. This model is of course not the prevailing
market in today’s world and pure capitalism as envisioned by Smith is not the by product of the universe in which we live. In spite of these imperfections, the capitalist model with its profound emphasis on private property ownership and the pursuit nof self interest is by far the most powerful economic system on the face of the earth.

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