This freedom extends to selecting one’s education, as well as religious or political influences. People have the freedom to choose the goods and services that best meet their needs instead of being given a limited set of options due to government interference that is intended to preserve the structure of the ruling body. It promotes equality See: Karl Marx – Das Capital / Communist Manifesto. That means it is a system that encourages people to be involved with their governance. For example, a diverse business team is more able to identify market niches, understand the needs of society's minorities, and target products to meet those needs. Capitalism requires a free market economy driven by supply and demand. The Library of Economics and Liberty. As such, high importance is put on technology. In a non ethereal way the current tech giant bend towards communism will only promote civil war by marginalizing hard work . They can choose to own a business, work at a specific employer, work as a freelancer, or not work at all. Last updated: 10th July 2019, Tejvan Pettinger, www.economicshelp.org, Oxford, UK. Firms in a capitalist based society face incentives to be efficient and produce goods which are in demand. Capitalism doesn't provide for people that cannot work (the disabled or elderly). This simply means that businesses tend to rely on automation more than they do humans. This is called a “monopoly.” When such a circumstance occurs, all the power in the business-to-consumer relationship lies with the business. It distributes goods and services according to the laws of supply and demand. Here are some additional key points to consider when looking at the overall pros and cons of Capitalism. In essence, rather than provide for the common good, they create products and services with only profit in mind. Competition is forced out of the market. A free market will ignore, Inherited wealth and wealth inequality. They sell their goods at the highest possible price while keeping their costs as low as possible. Pricing and supply is driven by demand. Capitalism also encourages mass consumption, is unsustainable, and provides an incentive for business owners to harm the environment for monetary gain. The United States is mostly capitalistic and the U.S. Constitution protects the free market. That is why Capitalism creates gaps between different socioeconomic groups. Also, corporations being "too big to fail" and economic cycles of booms and busts make capitalism unstable. Of course, this is a scam at best. "An Economic History of Twentieth-Century Europe," Page 68. An athlete, even if overpaid, can provide much excitement and entertainment for society. Accessed May 22, 2020. Efficiency. Pros of capitalism: Economic freedom: It helps political freedom. In this kind of economy, people are more open to lots more options in business. PROS. Services are improved to solve more problems. This creates a natural outcome of corporate and individualistic greed. Let’s use an example to illustrate this further. In capitalist societies, there is often great inequality between the owners of capital and those who work for firms. This causes the rich to become richer and the poor to stay poor. It was the dominant global economic system towards the end of the 19th century. On a scale of 1-triangle what is your favorite food. In the short term, inequality may seem to be in the best interest of capitalism's winners. From voting to serving on local boards to running for a national office, people get involved with government so they can create their preferred outcome. Goods and services in Capitalism are all designed to help someone live a better life. Global Slavery Index. Cons Of Capitalism 1474 Words | 6 Pages. Capitalists argue that a capitalist society is fair because you gain the rewards of your hard work. – from £6.99. That's guaranteed, regardless of their economic contribution.. Capitalism requires a free market economy driven by supply and demand. Corporate Finance Institute. Accessed May 22, 2020. 18 Major Advantages and Disadvantages of the Payback Period, 20 Advantages and Disadvantages of Leasing a Car, 19 Advantages and Disadvantages of Debt Financing, 24 Key Advantages and Disadvantages of a C Corporation, 16 Biggest Advantages and Disadvantages of Mediation, 18 Advantages and Disadvantages of a Gated Community, 17 Big Advantages and Disadvantages of Focus Groups, 17 Key Advantages and Disadvantages of Corporate Bonds, 19 Major Advantages and Disadvantages of Annuities, 17 Biggest Advantages and Disadvantages of Advertising. People who become rich tend to reinforce their position because they have a greater access to the societal mechanisms which bring wealth. A capitalist society is described as a free society – one where the people are provided a level of freedom that is unparalleled elsewhere.