The Advantages and Disadvantages of Capitalism

The Advantages and Disadvantages of Capitalism

Capitalism advocates for a division of labor where you are only allowed to work in a field that you specialize in. It focuses on how you can make your skills productive and where they can be applied. This means that a person does an activity that they enjoy which streamlines the production process as it makes it easy for them to deliver. You can turn your talent and skills into profits when in a capitalist nation. If you have a specific skill that people need, your wages will be high. A person can secure a higher-paying job whenever they want as long as their skills are in high demand. You can employ yourself using your particular talent which will bring you money.

Since capitalism emphasizes creativity, all the

Since capitalism emphasizes creativity, all the desires of people are fulfilled by upcoming entrepreneurs. Companies, specialize in different products that meet the personal needs of each consumer. Organizations can only continue operating when the demand for their goods and services remains high. This leads to a competitive market that ensures that consumers are given different products that they can use. The market is not dominated by a single supplier but rather a variety of alternatives that help regulate prices. Different businesses producing alternative types of the same product protects consumers from exploitation due to scarcity of goods when the demand is high.

Companies can only operate when they

Companies can only operate when they have customers therefore, developing a need to better the quality of their goods and have them available at fair prices. This creates pressure on companies to reduce the cost of products to avoid wastage. In a capitalist economy, there is no need for massive production of commodities that will be sold expensively. A company that chooses to sell its products expensively will run out of business as consumers will only buy what they can afford. Those that produce goods of poor quality to sell cheaply will lose their customers as there will be a cheaper and better alternative. This means that you will save more money and still get access to high-quality products because you will only buy the best possible item that you can afford.

The Advantages and Disadvantages of Capitalism

Giving human beings the same opportunities does not mean that eventually everyone will be successful. There are those who will fail to achieve anything giving an advantage to those who have accumulated excess wealth. Since a person needs money for them to get more profits, only rich will have the means to grow richer while the poor remain in low living standards. The privileged will start despising the poor which will bring hatred and other vices to the community. Since capitalism advocates for inheritance, the living standards of people will never change with the rich enjoying at the top and the poor suffering at the bottom.

When a business manages to beat its competitors and have their product standout, the other companies will collapse leading to the availability of only one product. With competition eliminated the price of a commodity will skyrocket and the consumers will lose the power of choice. They will be compelled to pay for the high price given that the product is in demand and there is no other alternative. The quality of a product might be low but since there is no other alternative, you will have to buy it at a higher price. This limits the demand for skills to one company forcing their employees to work under poor conditions with low wages. Companies will make more profits but the workers will not enjoy the fruits of their hard work given that it is the only organization that can use their skills.

Financial instability is exhibited in a capitalist economy because of unpredictable market demands. When the market needs change, a company that was highly depended on by a society is likely to collapse. Other factors such as corruption can also lead to a collapse of the biggest business. Being the only employer, their employees will be rendered jobless which will be deadly to the economy. People will lose their jobs leading to less productivity which will lower the economy. It is dangerous for a community to depend on only one organization to employ them because in case it collapses, people are left with no source of livelihood.

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