History of Capitalism

Capitalism is an economic system that encourages individuals and all segments of society to profit from the ownership of processes that create goods and services or from investments in activities or services created by others. With the demise of the feudal system, capitalism gained acceptance in the Western World as a way for individuals to profit from their own ingenuity and abilities. The system opened the way for the private ownership of property as well as for the attendant problems that included wage labor conflicts, power relations and property rights. Political ideologies varied in degrees of influence, but most tended to agree that the government does not have a rightful place in the free practice of capitalism. By the 19th and 20th centuries, economic capitalism emerged as the most dominant form of the market system.

Capitalism Debate Pros

Capitalism tends to improve standards of living by enabling individuals to afford to buy food and clothing as well as housing and health care. A capitalist society offers opportunities for work in professions or businesses that generate a profit. Economic freedom typically accompanies political freedom, while controls on economic activity are generally associated with political repression. The capitalistic system is designed to work effectively when economic transactions in diverse activities are voluntary. Curtailment of free enterprise is seen as counterproductive to the vitality of capitalism.

Self-organization is a key concept in the viability of capitalism. Control or interference by the government or other organizations curtails the ability of the market to regulate itself through pricing practices. In the absence of external controls, individuals in a capitalist society have the freedom to choose to buy products and services that are offered in the market or to refuse them. Self-regulation is a result of independent decision-making by buyers and sellers in the marketplace.

Capitalism Debate Cons

The unfair distribution of wealth can occur in the practice of capitalism, as it tends to reward those individuals who have preferred skills and abilities. Some members of a capitalist society own businesses that employ others, and the ones who are employed are in danger of exploitation. The benefits included in the capitalism debate tend to accrue to those who are successful in the marketplace, creating a disadvantage to those who are not successful. Social inequality is a likely outcome of a system that rewards some individuals more than others.

The unpredictability of the marketplace makes capitalism an unreliable system. External events may have a negative effect on a business or an investment, resulting in a loss that the owner or investor has no way to control. Such factors may cause a business to flourish without a reason or to fail even when all measures are taken to ensure success.