Nielsen, Makayla
S00561651
Business-1050-042
3/5/2013
Assignment 14
Standard Six
1. The text What Kind of an Animal Is This Here Capitalism? is written by David M. Potter.
Potter was an American historian of the South. He worked as a professor of history at
Yale and Stanford and served on numerous editorial and professional boards. Some of his
other works include: Lincoln and His Party in the Secession Crisis, People of Plenty:
Economic Abundance and the American Character, and The South and the Sectional
Conflict.
2. The text is about American Capitalism and how it differs from the rest of the worlds
economic systems. Potter explains that it isn’t just Capitalism, it is rather a specific type
of capitalism. Unlike calling a Dog a Dog, our Capitalism needs more definition such as
calling it a Border Collie.
3. The text was written in the year of 1960. Some major events going on at the time were:
the European Free Trade Association formed in Stockholm, Eisenhower and Premier
Kishi sign the U.S.-Japanese Security pact, and the USSR agreed to stop nuclear testing.
4. The text was supposedly written in the U.S. Other ideas originating from the U.S. at that
time were: the first weather satellite was launched, the 50th star was added to the flag, and
the Civil Rights movement began.
5. The text is relevant to the study of modern business because it discusses the American
economic system which so far has been the most successful. In order to succeed in
business one must run well with the economic system. Like that of a river if you fight it
you’ll drown, whereas if you go with the flow your likely to stay afloat.
6. The text made me feel that my level of education on the American Economic System we
call “Capitalism” wasn’t as adequate as I had thought. The literature of the text and my
grasp of Critical thinking are expanding, and the enlightenment of this text has also
expanded my education.
Questions 1-20
1. How does Potter describe American Capitalism?
a. Potter describes American Capitalism as a high standard of living, with emphasis
on consumption with a huge middle class.
2. What time period and what industries does Potter write about?
a. Potter discusses time periods of the 19th and 20th centuries. Some of the industries
he writes about are: government, oil, farming, mechanics, automotive, and the war
industry.
3. Outline the two (2) essential economic goals of American economies (Pg 143 Top)
a. Goal one is that of maximum opportunity for the individual coming from the
dignity and worth of man. Goal two is of a high and steadily improvement of the
standard of living.
4. Where does the first goal of maximum opportunity come from?
a. The dignity and worth of man.
5. What kind of government did Alexander Hamilton advocate? (Pg. 144 line 21)
a. One that was openly advocated by and for: “the rich, the well born, and the able.”
6. What are the property interests and why do they not remain in control? (Pg. 144-145)
a. Property interests are the big businesses. They do not remain in control because
historically the masters of capital have never been in really full control. Especially
in the even of setting American Economic goals.
7. Explain: “….the goals of the economy have been set by the democratic philosophy rather
than by the theory of capitalism.” (Pg. 145 line 29)
a. Rather than having the goals be set by the system itself, they are set by influences
from outreaching sources.
8. What does the word “democratic” refer to in the question immediately above?
a. The word “democratic” refers to the free and equal participation that some believe
in, otherwise stated as a socialistic influence to the economic goals.
9. Access to wealth is the only economic policy the American people insist on. Explain this.
(Pg. 145-146)
a. Because the American capitalism goals are that of reaching a higher standard of
living and achieving the maximum opportunity. By achieving wealth both goals
may be met by individuals.
10. In what way are corporations like people? (Pg. 146 line 23-34)
a. Corporations are like people in the sense that they are too large for one man to
work alone, so by allowing men to invest in these corporations, the government
decided to count them as persons so that each man may receive equal rights to the
company.
11. Explain David Ricardo’s Iron Law. (Pg. 147 line 18-32)
a. The Iron law basically states that in order to keep profits up, workers’ wages must
be kept down forcing them to live at the level of bare living.
12. Compare Ricardo’s law with the wage practices of modern U.S. employers like Walmart.
a. It is easy to see how the law could still be in effect, however with a company like
Wal-mart, always guaranteeing low prices, it is hard to see how the law is still in
effect when prices are low and minimum wage is continually rising.
13. Why does he say “The American economy today (1960) is….far from Ricardo,... It has
been based, from the beginning upon a rejection of their ideas that the exploitation of
labor was inevitable.”
a. Because America has had more land than men. We have always had a surplus of
goods and since we continually are developing the “easy way” to perform work,
the exploitation of labor is inevitable when a machine can do what a man used to.
14. According to Potter, the U.S. “….economy can support a large proportion of the
population, namely, those younger than twenty or those older than 65, in nonproductive
activities.” What does this prove? (Pg 149 line 9-20)
a. This proves that the U.S. economy can only support those who are unable to
support themselves. It can only hold up those who need to be held up while the
remaining “middle” is based all upon themselves since they are productive.
15. Compare Potter’s diffusion of benefits (Pg. 150 line 19) to Adam Smith’s Invisible-Hand.
a. The diffusion of benefits is that each attains what he earns. Smith’s invisiblehand, simply states that one may be guided to success. They both are similar that
they end with success and higher standards yet, dissimilar in the way of achieving
the higher standards.
16. What is the traditional American way of solving economic problems? (Pg. 150 line 3440)
a. To increase total wealth rather than redistribute existing wealth.
17. How does the distribution of wealth in 2012 compare that of 1929, 1940, and 1948? (Pg.
151 line 15)
a. The distribution of wealth is that for personal earnings it has increased while from
property it has decreased.
18. How did the U.S. standard of living compare to other countries in 1950? Today?
a. In 1950 the U.S. standard of living compared to other countries was it was filled
with abundance. Today there it is still seen as a country of abundance with all of
the immigration our country works with.
19. Why does Potter say that capitalism hardly fits as a good description of the U.S.
economy? (Pg. 153 line 33-40)
a. Because the single term cannot define all of our economic policies. Rather
working on a more descriptive form of capitalism suits our economy better.
20. In the Glossary, look up Cold War Economics, and Folly. Explain Potter’s folly.
a. Potter’s folly was that he believed the U.S.’ successful economy during the 19th
century was only because of the influence of free enterprise. But he overlooked
the growth perfomed by government expenditure for public works and defense.
10 Vocabulary
1. Proletariat
a. The class of wage earning workers in society.
2. Subverted
a. To undermine or overthrow a government or other institution.
3. Corollaries
a. Something that is a natural consequence of or accompaniment to something else.
4. Plausible
a. Believable and appearing likely to be true, usually in the absence of proof.
5. Interlude
a. A relatively short period of time between two longer periods, during which
something happens that is different from what has happened before and what
follows.
6. Deprivation
a. The stat of being without or denied something, especially of being without
adequate food or shelter.
7. Subsistence
a. The condition of being or managing to stay alive, especially when there is barely
enough food or money for survival.
8. Frugality
a. Characterized by thriftiness and avoidance of waste.
9. Expropriating
a. To take property or money from somebody, either legally for the public good or
illegally by theft or fraud.
10. Opulent
a. Characterized by an obvious or lavish display of wealth or affluence.
Works Cited

"David M. Potter." Wikipedia. Wikimedia Foundation, 16 Feb. 2013. Web. 05 Mar. 2013.

"Historical Events for Year 1960 (Part 2)." Today in History, Birthdays & History
Articles. N.p., n.d. Web. 05 Mar. 2013.

"America's Best History U.S. Timeline, 1960-1969." America's Best History U.S.
Timeline, 1960-1969. N.p., n.d. Web. 05 Mar. 2013

Potter, David M. "What Kind of an Animal Is This Here Capitalism?" Critical Thinking,
Readings from the Literature of Business and Society. By Edward G. Engh. N.p.: n.p.,
n.d. 141-54. Print