Element Description:
Governments do not directly participate in capitalist systems, but they must provide the basic elements that help markets grow and succeed. They must provide security and social stability so that people feel safe and won’t be cheated. Even more important, governments must provide roads, bridges, and other infrastructure that lets producers move goods and helps buyers and sellers connect. They must also provide stable money so that people can trade without having to barter.
Governments must also stop rent-seeking and monopolies. This allows everyone in the market to have more choices and better quality products.
Vocabulary
Monopoly
Definition:
A situation in which one company or seller controls most or all of a market
Market
Definition:
A system where people and businesses buy and sell goods and services
Producer
Definition:
A person or business that makes goods or provides services