Today’s economic world consists of three different types of economies and they are communism, socialism, and communism. Each of the economies has their own advantages and disadvantages, but the United States follows a free-market capitalistic society. A capitalistic society allows individuals to have private ownership of their own factors of production and distribution. These privately owned businesses operate for an individual profit and decide what to produce and at what cost without help from the government unlike socialism and communism. However, capitalism does have specific advantages and disadvantages.
The advantages of capitalism and a free market are the right to own private property, the right to own a business and keep all that business’s profits, the right to freedom of competition, and the right to freedom of choice. These four rights lay down the foundation to a capitalistic based economy. The two most important rights are the right to own private property and the right to freedom of choice. The right to own private property gives an individual the ability to buy and sell land at their own free will; the ability to do so lets the owner become more invested in their success. If the government owned the land no one would be willing to work as hard to make the business successful. The right to freedom of choice gives the individual the ability to choose where they want to work and what type of business they would like to operate.
Even though capitalism lets companies of all sizes flourish, there are also a few disadvantages of this economic system. The main disadvantage for capitalism is that it does not create an equal playing field for every American citizen. Certain men and women do not have the ability to begin their own business due to educational level, social status, and economic status, while communism puts everyone on an equal playing field. Other disadvantages of capitalism are the increasing greed amongst people and how certain businesses deceive the public. Most companies manipulate their audience through commercials; the owner can advertise a product at a certain quality, while the product is truly a lesser quality. The businesses deceive their audience because of the competition level amongst competing companies. There are a few ways one can think of to minimize these disadvantages.
To minimize the inequality amongst the American people certain banks should help lesser fortunate people take out loans like Muhammad Yunus’s business, Grameen Bank. The company helps distribute small loans to the poor to begin their own business. Another way to decrease the disadvantage of a company’s deception is to increase the law involving false advertising. Companies should be held accountable for their false advertisement on the radio, television, and billboards. Capitalism can be seen as the best way to control an economy, but like everything else it has its downfalls.
2 comments:
I really like the points you made about the disadvantages of a capitalist society. It is so true that even though everyone potentially has the same opportunity of succeeding, the playing field is definitely not equal. I thought it was good how you mentioned that not everyone has been fortunate enough to have the same amount of education, have the same level of social status, and all have the same economic stability. There can be a huge gap sometimes between peoples' education because of the money spectrum on things. If we could all start with the same amount of money in life, maybe that gap would be smaller but in reality, you are born with what you have. My favorite part though was when you incorporated how greed is increasing throughout the business world. This makes life for those who are not the "head honchos" of the business tougher. More and more bosses are becoming cheap in the sense that they take most of the business's profits for themselves and pay their employees as little as they have to for their hard work. If this greed continues, especially in capitalist societies like America, there will be major economic and political problems.
I did this same question and I completely agree with your points on the advantages. You pointed out how people have the right to own private property, the right to own a business and keep all that business’s profits, the right to freedom of competition, and the right to freedom of choice. You also mentioned the four rights that lay down the foundation to a capitalist economy. I also agreed with your disadvantages, especially when you mentioned that the main disadvantage was that it did not create an equal playing field for all. The main disadvantage that I focused on was the quote that many use referring to a Capitalist Society which is "The rich will get richer, while the poor will get poorer." I think it was ironic that we both had the same way to solve this major disadvantage which was to help out the less fortunate people and create banks like Muhammad Yunus's, Grameen Bank. This bank helps the less fortunate get loans to start their own businesses.
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