Positive Disadvantages Of Capitalism

Capitalism or Free enterprise system is an economic system featured by no interference from government and private ownership. Nowadays, there is no country which fully operates capitalism but in some countries, especially, developed countries, such as United States, United Kingdom and Japan employ this economic system (Yourdictionary), so they are usually considered to be the capitalist countries. However, there are several negative attitudes towards capitalism. For example, citizens tend to understand that capitalism always generates different wealth and income (Economicshelp). Moreover, a capitalist is viewed as an avaricious person who tries only to exploit profit from the consumers. In other words, they think that this is an economic system

Firstly, lack of government interference can cause monopoly power. Monopoly usually occurs in the public utilities, such as water, electricity and infrastructure because most of them are generally owned by a single firm in the country or it can be called natural monopoly. As a result, monopoly causes negative effects to customers and workers. To illustrate, because of no competition and no government regulation, firms who hold monopoly can set a price as high as they want because customers have no choice to choose but use a supply which is only available in the country. Moreover, firms have no incentive to concern about their product’s quality (Latestaccounting), so customers may be reluctant to use that product, though its quality is poor. Furthermore, monopolies tend to save a cost price as most as possible, so they will cut the unnecessary cost, including wages paying for workers (Economicshelp). Therefore, it is not surprised if many people think that capitalism is a selfish economic system. Another negative effect of capitalism, which is often argued, is social inequality. There is a famous quote of Churchill about capitalism, “The inherent vice of capitalism is the unequal sharing of blessings.” (working-minds). Due to the feature of capitalism: properties are privately owned, so a large powerful firm, which can make profits more than small individuals, has a right to possess all profits earned, so

If there is government interference, it means that there is no free market anymore. When government participates in an economy, it will regulate many policies to control privates’ productivities and economic system. Truthfully, there are no others who can respond to consumers’ demand as good as producers, so their decision without any control from government is the best (Economicshelp). Furthermore, the presence of government usually comes together with a fiscal policy. It influences on aggregate demand directly (Fundamentalfinance). There are various kinds of fiscal policy, however, in this paper will mention only two types of them. First is a tariff or import fees. Tariff is imposed to assist domestic entrepreneurs, so it impacts on the consumers as they have to spend much money on the imported goods (About). Another fiscal policy is subsidy. This policy is levied to help inefficient producers. In reality, the way to keep those unsuccessful entrepreneurs in business does not make any benefit, yet, it is an obstacle to new and proficient producers to enter the business. The growth of business and prosperities of the country cannot be achieved by them (Ringer 151). Apart from the negative effects of government participation in business as stated above, capitalism, besides, is not a selfish economic system and not completely leads to societal inequity since it