Capitalism



Capitalism

Introduction

The economic system which is based on private ownership through which one can gain profit by the means of capital investment and labor employment is capitalism. It is the system which now exists in almost every country. Initially capitalism had existed in a limited form in the society, it included factories, mills, workshops and but gradually, it has expanded to multinational firms. Capitalism has two divisions of classes, those who own the means of production and those who work for them. Capitalism is a political, social and economic environment in which corporations and wealthy few control the property, including capital assets (land, factories, money, stocks and bonds, bonds). Capitalism differs from previous economic system, the feudalism, for the purchase of labor for wages, and not by the direct labor that was obtained by way of custom, task or duty (close to slavery) in feudalism. It differs from socialism largely by the predominance of private property, in contrast to the social ownership of production elements. In capitalism the price mechanism is used as a supposed sign that allocates resources among different uses. The different forms of capitalism depends on, among others, the degree to which use the price mechanism, the degree of competitive markets and the level of government involvement in the economy. To define capitalism is necessary to define its basic principles, since there is no consensus on its definition. My argument is that the capitalism is an economic system in which private property plays a key role and it is a necessary component for the political and economic freedom of the society.

Arguments in favor of Capitalism

Capitalism is grounded on free endeavor and believes that there should be restricted government intervention. It argues that free market should be based only on supply and demand, which will eventually maximize consumers' benefits. Capitalism promotes the freedom of individual venture however the government is required to take action against its abuses like slavery and financial fraud. It can still exist while under military dictatorship like the Scandinavian democratic socialism states, South Korea's rapid state-sponsored industrialized growth, and Japan's consent politics all coexist with capitalism. However, since the 1930s Great Depression, considerable government involvement has existed in spite of the capitalist principle of "hands-off" government, in most of the capitalist nations. It also exists in the form of taxes, incentives, grants and other exemption in some countries (Hayek, 1963). Although global dealing has been linked with the thriving of capitalism for many years, some scholars feel that since last quarter of the century, the trends that link with globalization increased the flow of people as well as capital. Now these trends boost that capitalism should be viewed as a truly global system. However, other thinkers argue that globalization, even at its quantitative extent, is no greater now than during earlier periods of capitalist trade.

While some scholars feel that the thriving of capitalism eventually leads to the materialization of democracy, others disagree to this claim. Some thinkers argue that although in the past ...