State Capitalism vs Liberal Capitalism

1465 WordsMay 21, 20136 Pages
Overview Capitalism is the combination of many actions that provides the economic structure such as the changing balance of output, trade, income and employment. This is based on private ownership by means of corporations or individuals. There are many types of capitalism. This essay discusses two types of capitalism that are currently being debated in the media, State capitalism and liberal capitalism. This essay also investigates whether the South Africa is really state capitalism or are they using Major Private Sectors to socially develop the South African economy, being Neoliberal capitalism? State Capitalism VS Liberal Capitalism State capitalism is when the government takes control over the commercial economic environment. The…show more content…
By increasing the number of firms and projects will shift the demand curve to the right and therefore increasing the number of labours from L1 to L2. Transportation and Water Government is planning to develop and integrate rail, road and water infrastructure in various parts of South Africa. This is increasing the production of minerals; namely coal, platinum, palladium, chrome and other minerals. This will also expand the rail transport thus connecting coalfields to power stations. The government is planning to link South Africa’s major cities, such as Gauteng, Durban and the Free State with each other and with the major sea-ports to improve exports. The government is implementing this integration with their state owned enterprise, Transnet. Thus implying that the upgrade of transportation is state led capitalized. Further to this, Transnet is reducing port charges to decrease the cost of doing business. Furthermore the reason for government intervention in transportation and water development is to increase the production of minerals which is our primary GDP driver. Mining Industry contributes 8.8% directly to the country's gross domestic product (GDP) and another 10% indirectly. (Brand South Africa 2012) Health and Education Government is implementing National health insurance systems such as the refurbishment of hospitals and nursing homes. As well as spending a large amount of money for schools and universities in poor areas such as Mpumalanga and the

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