Chapter 1 Assignment

1.) What is meant by managerial capitalism and why is this type of

capitalism important to the U.S. economy?
Managerial capitalism is a market economy that allows the larger, more dominant firms
to be run by managers that are paid instead of smaller companies being operated and
run by the owners that started the business. As time continues to pass on, this type of
capitalism is important to the U.S. economy because otherwise only the owner of the
entire business would get to make all decisions. That could be very controversial in
multiple ways. One person who started a large ( now booming ) business you could say,
might have a very different idea of what should be put in place versus an entire
company and everyone that works for it coming together to put a plan out. With more
people involved and main managers that get to lead and help the group with making
decisions and important changes, there is a lot more reality to giving people their needs
and wants. Without this type of capitalism, we would all be overruled by one single
person who owns the company. Nobody else would get a say.

References for question 1

https://www.oxfordreference.com/view/10.1093/oi/authority.20110803100129827#:~:text
=The%20prevailing%20form%20of%20capitalism,by%20teams%20of%20salaried%20e
xecutives.

2.) What are the various assumptions underlying the market

capitalism model?
Some assumptions underlying the market capitalism model include as follows. First, the
government’s interference within the economic life is small. This could also be known as
Laissez-Faire. Laissez-Faire is the idea that the government should leave everyone
alone and let them do their own thing. Second, there was an assumption that it is
allowed for individuals to own private property and freely risk investments at their own
risk. Third, the biggest contribution that the market capitalism model is giving to society
is jobs and opportunities for others. There is another assumption as well ; that any
consumers are informed about all products and prices and make rational decisions.
People also assumed that all basic institutions including banking and laws are made to
ease commerce.

References used for question 2

https://www.sciencedirect.com/topics/computer-science/market-capitalism
3.) Discuss the dominance model in the Business-Government-
Society relationship? Please include examples to expand upon your
views.
The dominance model in the Business-Government-Society relationship is a pyramid
idea with mainly representing the ideas fom business critics. Inside of this dominance
model, business and government get to dominate over the mass of the people. This
model and the ones that believe in it think that by having a powerful control system that
helps a few and lets down many others is the best way to go. Usually, we see what the
people want and have those that rule above report those findings and so mainly majority
rules. That does not apply here. The United States followed the dominance model, but it
failed to stay on top when many people were falling down from such overpowerful
rulings. I believe that there are many things wrong with both sides of it. I think that
powerful business’ should have some more power than the smaller ones, but we cannot
cross out all of the people’s ideas just because they are not as greedy or wealthy as the
ones that are thriving from this dominance. There are business’ out there that do and
can very much so abuse all of the power that they built up over time. Three main
components get lost when this happens. First, people’s interests will decline. Second,
salaries will become harder on people. Third, the workers will be exposed and no longer
protected by the business.

Resources used on question 3

https://s3-ap-southeast-
1.amazonaws.com/unisim.elearning.documents.prod/SSC205/LessonRecording/SSC20
5_SU01CH01T01_V1_0/presentation_content/external_files/SSC205_SU01CH01T01_
V1_0.pdf

4.) What is meant by the countervailing forces model in the Business-

Government-Society relationship? Please use examples to illustrate
your ideas.
The countervailing forces model is meant to be so there is no constant dominance from
Business’, governments, and society. It other words, it kind of gives everyone a fair shot
to be able to maintain a fair amount of power. It is meant so that people are not getting
overruled and their lives ruined from stronger more dominant business’. All of these four
different forces have potentional to fall or rise, it all depends on their issues and
circumstances. An example of this could be something that is in high demand by
consumers. For example, when the pandemic started, lysol and other cleaning brands
were not able to keep up with the high demand that people wanted them at. Stores
would constantly run out of hand sanitizer or clorox wipes. Clearly those companies
were skyrocketing off the charts like never before during that time. However, as much
as a company can soar high, they can also fall very low. Let’s think about other
companies that have been struggling during this pandemic. For example, places like
amusements parks are really hurting right now, when usually they are making an
overload of money.

Resources used for question 4

https://escholarship.org/content/qt3z26h30n/qt3z26h30n.pdf