What is Capitalism?

It is the ideology of how an economy works.

Capitalism means to be free in an economy and naturally compete with others.
All people’s statuses are different.
The government does not interfere with people and their way of life.
Basically, it is the complete opposite of communism.

Competition
Competition between businesses is vital in a capitalistic society, business owners believe that
hard work pays off.
Prices and value of goods decrease, and increase based on demand and supply, as does the
quality of those goods.

Rugged Individualism
The Republican Party was in power in the US during the 1920s, it was believed that the
government should not help people in economic difficulty.
‘Rugged Individualism’ was the belief that if one works hard enough, one will eventually be
able to succeed.
Herbert Hoover used this term often and believed that you should help yourself if you were
in financial trouble.
In a Capitalist society, the state should have minimal control over businesses.

A Free Market
America’s free market was based on supply and demand with little to no government
control.
Prices of goods would go down if there was an excess of supply.

The American Dream

People talk of the 1920s as the ‘golden ages’. The economy was booming, and many
Americans were financially well off. Many people came from overseas to the USA.
The capitalist boom of the 1920s:
At the beginning of the 20th century, America emerged as the world’s leading industrial
power, there were several reasons for this:
- It was a huge country with a vast array of fertile plains and grew many agricultural
crops.