 Dear students, in this module, we are going to talk about the economy and the state, particularly we are going to talk about the capitalistic structure. Capitalism is an economic system based on private ownership of the means of production and the production of goods and services for profit. As you know, the purpose of the capitalistic system of the economy is profit making and the means of production used in the profit making process is produced by the means of production. Those commodities do not have a used value for you but market value. And the commodities used for market value are not prepared for immediate consumption. So overall, the capitalistic system, the basic structures and functions of it, we will look at them. Capitalism is characterized by competition, innovation and pursue for profit and is often associated with individualism and consumerism. So the key characteristics of this system is that capitalism is a competition-based system. It is also called LACEFAC. LACEFARE is an economic system, it is a free market economy. It is a competition so that people can get better commodities in the market to compete with each other. And a big advantage of competition is that the more competition there is, the more commodities or products will come to the market and similarly, their value or their price will decrease. So competition is one of the key characteristics and then we have innovation. Because the market oriented system can compete with those who have a new value in the commodity. And if you are producing conventional or traditional commodities, then you stay behind in that competition. So innovation becomes an important character of this capitalistic system. And then the pursue for profit is often associated with individualism and consumerism. So individualism and consumerism are the characteristics of this capitalistic system. Advertisements or commercials that you see in the media are an important reflection of consumerism. Because it motivates us to consume this commodity or product and the focus is more on profit making. In Pakistan, we see that the country has experienced a rapid economic growth in the past years as well as in recent years with the growing middle class and a focus on attracting the foreign investment. So why foreign investment is attracted? Because the GDP of your country is not enough. That is why foreign investment is more expensive. And based on that investment, the economic circle or economic activity or economic productivity is more possible. Your labour gets more and more work. So the relationship between the state and economy is complex with the tensions often arising over questions of regulation, taxation and distribution of wealth. On the one hand, the capitalists have this point of view that this should be a free market economy so that the commodities and their competition can decide the market. That is, your supply and demand mechanism should be dependent on it, not on the regulations of the government that the government should decide on the commodity or product, how much tax we have to impose and what will be the regulatory process and what will be the distribution of wealth in the society. So in the capitalist form of economy, the taxation is considered very negative and the competitive or free market economy is considered to be its basis. Understanding the dynamics of capitalism is essential for analysing the effects of economic systems on individuals and society. So the relationship between society and capitalism is very deep, especially in today's world. Today we see that almost unanimously the capitalist system is present in the whole world. And the economic activity that is being performed in the world is being performed in the same capitalist system. So it is very important for us to understand this because your financial aspects are determining your social aspects. One point of view is that the economy is actually determining the other aspects of your life. So it is very important to understand the capitalist system in this regard. So the study of capitalism requires a multidisciplinary approach, not only from a sociological point of view, but also from the point of view of politics, history and the media. Along with this, when we analyze and understand its complexities, we will be able to understand how our human behaviour and practices in other aspects and institutions are affecting the capitalist system. So it is a food for thought for you to see how the capitalist economy affects the people's values in Pakistan. And what is especially affecting our education system. Let me give you a small example of how our private school systems have become profit-making corporations, instead of really working for the academic purposes. In other aspects, you can also see how the economic capitalist system makes your other institutions relatively profit-making as compared to their own genuine purposes of different social purposes.