Paste your essay in here…Competition is a natural benefit and consequence of capitalism. While many think that capitalism is a major disadvantage of the system as companies are referred to as ‘’Fat Cats” because they charge high prices for their products or service, but a massive benefit of competition is innovation getting companies to think outside the box for newer, better and cheaper products and services.
As wealth is the product of labour.” – John Locke, Philosopher
Capitalism gives people an incentive to work hard and create a climate of innovation. Think of companies like Ryanair, Aerlingus and Virgin Airlines always coming with new clever ideas to make their flights bigger and better than their rivals and then think of those protected from competition like health care. Joseph Schumpeter called it a “creative destruction” which sums it up perfectly. Innovative companies are forward looking they don’t look in the past. Competitive capitalism doesn’t just happen between companies’ it’s happening between individuals as well. Let’s assume you are looking for a job and there are many candidates that have a variety of qualifications, interests and skills to choose from. They are looking for suitable candidate who will help its productivity and competitiveness. This makes us strive to do our best, leading to more value creation. Those who say that the ‘’little guy” hasn’t a chance and that they get squashed by the giants of this world ignore the crucial role of capital markets. Vast pools of savings are directed by investors into all new types of products, services, adventures. It is the return on investments not the size of the companies that count. Look at Bill Gates in the 1970s was once an unknown, a college drop-out with big talent, a big ego, and big ideas, but a fairly small bankroll he rose up and took control and had enough incentive to become large and profitable and one of the wealthiest mean in the world.
A major disadvantage of capitalism is the ability of some companies due to private ownership is to gain monopoly power. This can be seen in today’s market where big companies have taken over certain sectors such as google. This can be very bad for the consumer due to price hikes. Monopoly power is another downfall to capitalism. ‘In the labour market, a monopsony occurs when there is one employer and many workers wanting to gain employment.’ This will then allow the company to take advantage of the situation and offer skilled workers lower salaries because the supply is greater than the demand of workers. But Monopolies can make major profit which can then be used to fund high cost capital investment spending. Successful research can be used for improved products and lower costs in the long term. Google has gained monopoly power through being regarded as best firm for search engines. Apple has a degree of monopoly power through successful innovation. We cannot fault these companies for working their way to the top and therefore taking advantage of this hard work they have put in to make themselves a monopolist.
Freedom under capitalism has only one meaning to live in a social system based on individual rights or in practical terms.
“It is the basic, metaphysical fact of man’s nature the connection between his survival and his use of reason that capitalism recognizes and protects.” –Ayn Rand, Philosopher
The election of President Barack Obama was a blow to the freedom that capitalism is built on, although President George W. Bush had done a fair job trampling on the principles of capitalism.
John Mackey stated in his book Conscious Capitalism that free market entrepreneurship economy is good because it creates value, ethical because it is based on voluntary exchange, noble because it elevates our existence and heroic because it lifts people out of poverty and creates prosperity. This statement captures the beauty of capitalism. Everybody in a capitalist society has a role to play and will act in their own self-interest when making an exchange. The best way for capitalism to succeed is for the government to get involved on seldom occasions and for very specific reasons.
We have grown up in a world-class education system and taken it for granted that Individuals have plenty of freedom like where to work and who to work with. Choice of starting a business and quitting a business and the choice to buy and sell and make whatever you want within the limits of the law. People can own and buy properties as they wish, this applies to both tangible and intangible items. The driving force that encourages people to improve their material wellbeing. This is responsible for the growth of the capitalism free enterprise system. Who is the winner in the freedom capitalist world? We are.
One of the greatest things about capitalism is democracy. We all get to vote, we all have equal rights whether on race, political views or gender. In Ireland once you reach a certain age you have the vote to make our government who it is. You have a voice.
The University of Leicester carried out an investigation and in it you can clearly see that the foremost democratic capitalist countries like the USA, Canada, New Zealand and the whole of Europe are the happiest in the world. Why is this? Well this is all thanks to the free-market, whatever products people want, they can get. And who are the unhappiest? The countries that export to us like the Asian Tiger economies. They need to start consuming more than they produce for the happiness to flow in.
One of the most common arguments that capitalists use is that capitalism works perfectly with human nature or more specifically greed. Most of the good in the world has been done by 'greedy' people .People out to better themselves.
“Banks have done more injury to the religion, morality, tranquillity, prosperity, and even wealth of the nation than they can have done or ever will do good.” – John Adams
Although capitalist markets have been growing almost all the time since their invention they have gone through some very rough recessions, namely the most recent recession in 2008. Is the capitalist market to blame? Capitalism isn’t to blame. People are imperfect so therefore so are their institutions. The regulations that were created, created bad incentives. It is our human nature to look after ourselves so of course someone somewhere was going to take advantage of the system. Greed is rewarded duly with large amounts of money and the entire economy is fuelled by people working hard to furnish their own needs. In addition, greed causes competition, which is an essential part of advancing the human race.
In conclusion, Capitalism is the only viable ideology to adapt. By no means is capitalism perfect. Although it's not too far away from what's exactly needed in the market. The fact that companies are able to amass wealth in capitalist societies allows them to expand and innovate which is vitally important in society. The technology sector is the fastest moving sector in the world and if a company is in this sector they need to be able to innovate which is why many of the major companies in the world are based in capitalist countries. When you think of technology you think of google, apple and dell. If the most powerful companies belong to capitalism then that speaks for itself which is better. To get the better jobs, they need education. To get that education, they need money. So to get that money, they need to compete with other people for the lower level jobs. Capitalism is essentially "survival of the smartest, fittest, most appealing, and most well connected. It is very beneficial to both the government and society. It provides people with freedom, democracy and voice in the forever changing world we live in.