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A Guide for the Survival of Humankind and Helping the World, Society, and Yourself.

The Pros and Cons of Capitalism

Even though capitalism is the clear winner when in competition with other types of economies, capitalism has major disadvantages that are often overlooked. So, I think it would be a good idea to review both the advantages and disadvantages of capitalism.

The Advantages of Capitalism
  1. Free Competition: Just by allowing any person or company to compete with any other person or company is a major freedom that should not be unnoticed.

  2. Decentralization: The decentralization of capitalism allows the economy to be much more dynamic to changes and competition, thus capitalism is much more stable than other alternatives.

  3. Self Regulation: By allowing buyers to buy want they want from who they want helps businesses to regulate themselves to the customers' changing needs.

  4. Innovation: In an effort to increase market share and profit, companies are more will to attempt innovation and fund research and development.

  5. Cost Cutting: Again to increase profit, companies often attempt to cut costs to increase revenue.

  6. Products and Services: Capitalism allows for a much wider range of products, prices, and quality for all goods and services. Thus, capitalism gives customers a wider choice.

  7. Equality: Any person or existing business can start a new business, assuming sufficient funds and resources.

  8. Money: With luck, anyone can become wealthy. Or at least earn a respectable self sufficient income.

  9. Globalization: With a worldwide market, workers and buyers can be found everywhere, thus bringing modernization everywhere too.

  10. Improving Society: All businesses and workers provide some sort of improvement to society, customers, and employees.

  11. Politics and Religion: Capitalism can, yet not always, reduce the religious and political influences on the economy, that more often hinder the economy than a free market.

The Disadvantages of Capitalism
  1. Class Gap: The greatest gap between the ultra wealthy and the averages workers are greatest under capitalism.

  2. Needs: To capitalistic businesses to succeed, they need luck, innovation, inspiration, education, talents employees, existing wealth/capital, resources, contacts, etc. just to name a few needs.

  3. Unfair Pay/Exploitation: To increase profits, some companies often tend to reduce wages to unlivable levels. Or some companies may even exploit child labor despite laws and morality.

  4. Unsafe Working Conditions: Again to increase profit margins, some companies do not provide safe working conditions to their employees.

  5. Environmental Impact: Capitalistic businesses tend to harm the environment more.

  6. Mega-Corporations: Larger companies tend to purchase or force competitors to close by being more cost competitive due to their size.

  7. Monopolies: As a result, mega-corporations tend to become monopolies without competitors that could help provide alternatives, innovation, and reduce prices.

  8. Greed: Wanting more and more money is a natural outcome of any successful business or person, however greed is self consuming and never ending.

  9. Automation: Automation of factories by machines enables cost reduction yet also reduces the number of jobs too.

  10. Democracy: In capitalistic economies, governments tend to serve the rich more than the majority. Thus the economy becomes more important than the people, and the government becomes anti-democratic.

by Phil for Humanity
on 12/17/2012

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