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The Pros And Cons Of Capitalism As An Economic System

1052 Words5 Pages

This essay proposes to look at capitalism as an economic system and how it has ultimately become a leading economic system in modern times. In order to answer the question as to why capitalism is the dominant system, numerous benefits of capitalism such as stimulating entrepreneurship and expanding competition, production and economic freedom will be discussed. Capitalism, however, is not a perfect system and can still be enhanced to achieve even greater success. Therefore, this essay further aims to look at solutions of how accountants can effectively utilise their skills in order to rectify the minor problems which occur in a capitalist society.

Capitalism refers to an economy whereby the citizens and private sector own and control the factors of productions (Amadeo, 2017). The involvement of government is limited in this economic system and government mainly acts to ensure peaceful …show more content…

The growth of businesses ultimately results in greater competition between these companies (Halleen, 2017). The enhanced competition requires businesses to look for new production methods and technology in order to maintain a competitive advantage. The nature of this competition therefore allows for continuous development of new products, services and manufacturing technology. An economic system such as communism does not possess such traits as resources are provided by the government to ensure equality and this makes citizens complacent and unwilling to develop further as it provides no benefit to themselves. This is contrasted by the benefit of capitalism as it creates a desire of individuals to not remain stagnant but to innovate as time passes. Innovation is necessary in an economic system as it ensures that processes and resource allocations become more streamlined as environmental and political conditions adapt to changing

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