This textbook covers the syllabus of the papers on economy, state, and society of undergraduate and graduate courses in Economics in India. The content also covers the topics in history of economic thought taught in some colleges and universities.

The textbook explains the emergence, evolution, and working of the capitalist system with the help of some of the major principles and theories of economics. It interrelates economics and economic life with other aspects of our lives—social, cultural, political, religious, and intellectual.

This book departs from the traditional analysis of the capitalist system in integrating the real sector of the economy with its monetary sector and carries forward Keynes' analysis. It underlines that the capitalist system is constantly changing, propelled by the tendency towards increasing concentration of ownership and control of the means of production in fewer and fewer hands.

The book comes with an Instructor's Manual to aid the teaching of the subject.

The Functioning of the Capitalist Economic System

The Functioning of the Capitalist Economic System

The functioning of the capitalist economic system

Learning Objectives

  • To understand the economy under competitive capitalism
  • To study the economy under monopoly capitalism—Keynes, Schumpeter and Galbraith
  • To have an overview of the Fordist period
  • To analyse the economy under the post-Fordist phase
  • To discuss economic development under feudalism, competitive capitalism and monopoly capitalism
  • Key concepts to look out for are liberalism; self-regulating market economy; efficiency, full employment, stability and maximisation of social welfare; Say's law and quantity theory of money; tendency towards chronic underemployment equilibrium; demand-management policy; anti-cyclical fiscal/budget policy; police functions; welfare state; dynamic competition; monopolistic practices; planning versus the market; managerial capitalism; state versus market; supply-side and demand-side economics; economic and financial globalisation; national sovereignty, nationalism versus globalism.

The discussion throughout the chapter keeps ...

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