Psychology

Evolutionary Forces in Capitalism



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BF Skinner made significant contributions to psychology. His stimulus response or S-R theory is instrumental in explaining how the mind can be conditioned to pair a response to a certain stimulus. Teachers use this theory in the classroom as students have consequences and rewards for their actions. The stimulus is something that happens in the environment and the response is what you do when that happens. By reinforcing this pairing either negatively or positively it can help to shape behavior.

This theory explains capitalist evolution because capitalism at the root deals with reinforcements. The idea of capitalism is that a person can make as much money as they want by taking advantage of a free market. Capitalism can lead to large differences in wealth because of the power and opportunities gained by having wealth. In order to rise to the top you need to be innovative and those with the best ideas and ways of doing business will succeed. That competition in and of itself runs parallel with the S-R theory due to the possible rewards related with being a successful business owner.

A capitalist is driven monetarily by a system that operates on the basis of profits. If something can be done for a profit then a capitalist will do it. Over time this thinking has evolved to many complex ways to make profit. From the stock market to trading on borrowed money where the risk is high but the reward is too has taken reinforcement to the extreme. In the corporate world business decisions always hinge on the risk to a company and the affect on profits. If a company does not perform well then the stock drops, it may have to raise prices on products, or there might be some other negative reinforcement. Whereas, if a company performs well then the company gets good ratings and many other types of positive reinforcement. This conditions businesses to operate based on profits. Capitalism has always done this but now more than any other time the rewards are greatest for good decisions.

There are times when bad decisions shape the landscape of capitalism like the collapse of the housing market in recent years. Prices for houses were artificially high because of investors buying and selling houses because the prices were rising fast. As soon as the economy started to slip and housing started going down it was a domino effect. Credit scores were destroyed and many years of paying into mortgages were lost as people foreclosed on their homes. Although policy has not changed significantly, much of it surely has changed the behavior of those that witnessed it.

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