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What are the pros and cons of capitalism? Show more Show less

Capitalism is an economic system in which the four factors of production (entrepreneurship, capital goods, natural resources, and labor) are owned by private entities with the aim of generating a profit. Capitalism requires a free market economy driven by supply and demand. There is a lack of government intervention. Competition helps keep prices moderate and production efficient. This stands in opposition to socialism, a system in which the means of production are owned by the state.

Pros of capitalism Show more Show less

Capitalism is self-regulatory. It promotes innovation, freedom, and opportunity. It meets the needs of the people and is beneficial to societies as a whole.
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Capitalism helps societies as a whole.

Capitalism helps societies as a whole through higher GDP, globalization, and the invisible hand.
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Context

The Argument

Capitalism helps countries to have effective wealth creation. People face incentives to innovate and work hard. When one person starts a business, they give people jobs that give people money that they then invest in the economy and the cycle continues. This creates a higher GDP which leads to a higher standard of living for everyone.[1] Capitalism in one nation also helps other nations as well. Globalization, free markets, and free trade can allow countries to access goods and services from all over the world.[2]Countries can use their competitive advantage and people from everywhere are encouraged to be innovative. Capitalism inevitably benefits society as a whole. This can best be characterized by the idea of the invisible hand. The concept of the invisible hand was first introduced by Adam Smith. It is a metaphor that describes how the self-interested actions of individuals lead to unintended beneficial social and economic outcomes.[3] In other words, when people act in their own self-interest, the economic outcomes benefit everyone. This can be seen by the fact that in a capitalist society, production and consumption is a symbiotic relationship. A tourist wouldn’t be able to travel without an airline, and the airline wouldn’t stay open with tourists.

Counter arguments

Capitalism does not help societies as a whole. There is vast wealth inequality within capitalistic societies. Also, capitalism has harmed societies by focusing on exploitation and imperialism. Developing nations have their labor exploited for extremely low prices and their land depleted of its natural resources. This is not helping them.

Framing

Premises

[P1] Capitalism leads to a higher GDP which leads to a higher standard of living for everyone. [P2] Capitalism in one nation also helps other nations as well. [P3] Capitalism inevitably benefits society as a whole.

Rejecting the premises

[Rejecting P2] Capitalism has harmed developing nations by exploiting their labor and land. [Rejecting P3] Vast wealth inequality shows that capitalism does not help society as a whole.

Proponents

Further Reading

References

  1. https://www.economicshelp.org/blog/5002/economics/pros-and-cons-of-capitalism/
  2. https://netivist.org/debate/pros-and-cons-of-capitalism
  3. https://www.britannica.com/topic/invisible-hand

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This page was last edited on Saturday, 23 May 2020 at 04:39 UTC