I believe capitalism forces business men to make profitable amoral decisions may not benefit our society at all. However, maybe Smith is also correct on capitalism is the best way to serve the society before other solutions appear. And with many evidences from different countries, I have to agree with Griffin and Smith that capitalism is efficient. However, I would only describe capitalism as an insensitive, bloody, efficiently machine that does not have feel and moral. The core of capitalism is still profit driven, materialistic, and money.
However some industries are regulated because they have the potential to exploit the customer, these industries would be more difficult and dangerous to privatise. Privatisation depends on the right set of internal and external factors to work successfully. Good management, workers, communication and motivation are essential as well as external factors such as the amount of help from the government to get it underway, the competition in the new private market, the customer response to the new system. Without these key factors to drive the process of privatisation, then it maybe unsuccessful, and this is simply what happened with Railtrack.
Equal opportunity must exist for capitalism to end human misery, however the stratification of society ensures that no individual has equal access to the keys of capitalist success. Capitalism as an economic system
Government regulations to help prevent monopolies can actually make it more difficult for small businesses to survive. People portray monopolies as greedy businesspeople who want to take all the money away from consumers. Despite that, people often forget that monopolies are still disciplined by market forces. It does not make sense for a monopoly to set prices so high that consumers cannot purchase the product or to create a useless product that no one will buy (“Monopolies,” 2015). This is an easily understandable, but quickly forgotten fact.
This can affect the economy in a very harmful and harsh way. If there is something someone needs, but prices are outrageous, and the company only makes limited supplies of that item, society is out of luck. Having a monopoly can cause less income for the economy because of the simple fact that it is a restriction of supplies. They can be harmful because most monopolies do not provide more up-to-date products because it has nothing to which to be compared. Economists object to monopolies because they realize and understand who is “more worthy”, the producers or consumers.
Thus a capitalist democracy is an oxymoron as democracy is characterized by the rule of many and equality of opportunities. However, capitalism does not create the necessary prerequisites for a democracy true to its original form. Those who assert globalization do so on the logic that the strengths outweigh the weaknesses, but for whom?
This power is limited, by means such as elections and constitutions. Inclusive economic institutions encourage property rights and contracts, as well as promote starting new companies, competitive markets, and freedom for citizens to enter the workforce of their choosing. In contrast, extractive political institutions support economic institutions that protect elites from competitors. The wealth of the elite can strengthen the hierarchical system, and in turn, make it more repressive to the population and increase the elite’s wealth even more. It is discussed “Nations fail today because their extractive economic institutions do not create the incentives needed for people to save, invest, and innovate”.
Capitalism is about the whole concept of free market, but sometimes the free market isn’t the best choices in the long run. Because capitalism has inequalities, it’s an inhuman system, and there’s competition. People might say, and what’s wrong with a little competition? I am not saying that competition is wrong, because it’s not. But sometimes people take it too far and instead of having a friendly competition it turns out to be a war.
Thus, the analysis rather static and the virtues of the status quo are assumed. Furthermore, the lack of government control does not make the market stronger and individual prosperity greater as expect. The uneven distribution of income would create tension between the classes. At the international level, the asymmetry in term of development between North and South shows that liberalism only serves the interests of the strong, particularly a few developed states. Thus, liberal trade policy can create tensions between states instead of bringing peace.
Any good/service being produced or used domestically would not contribute to the GDP of the nation even though they amount to real production. Apart from this it only takes into account the legal transactions that take place, underground economy is not reflected in the GDP. The size of underground economies differs from nation to nation. For example Italy’s GDP would be much higher if we considered its underground sector as part of the economy, while Switzerland’s GDP would change very little. A healthy and clean environment is surely an integral part for a good life, however this calculation tool does not take this into account.