Answer to Question #249041 in Microeconomics for SHREYA

Question

For each of the scenarios below comment on whether the setting can be termed as a capitalist system. If yes why, If not why not? If you think that It does not represent capitalism say how it can be modified to make It Into capitalism:

a) In the Arumbaya tribe hunters leave in the morning to find food. At the end of the day, they return with their catch and leave it all in a pile outside the village. Tribe members can come and take what they need.

b) An influencer on social media hires people to develop content for her YouTube channel. Now she provides social media solutions to various businesses.

c) The Maghrebi were an important Jewish trading community in the Mediterranean. They used to trade through overseas agents who could be trusted as they all belonged to the same community. A cheater would never be employed as an agent again. 

Answer 1

(a)

This is not a capitalist system setting, because the tribe hunters do not own nor control their daily catch. Neither are prices set in the society according to demand and supply because members just come and pick what they need without paying for it. No profit is made in this case.

(b)

This is a capitalist system setting, because the influencer owns and controls her own YouTube channel. She pays for the services offered by the people who she works with. Profit is made through the provision of solutions to various businesses that possibly pay for the services offered.

(c)

This is a capitalist system setting, because the trading community owns and controls the trading activity that is performed by their agents overseas. Not employing a cheater as an agent implies that no losses are made. The main motive here is profit making.