Pros and Cons of Capitalism

Capitalism is an economic and political system in which a country’s a trade and industry are controlled by private owners for profit rather than by the state.

The states where capitalism is practiced have economic freedom, voluntary exchange, private property rights, profit motives, and competition.

Pros and Cons of Capitalism

Pros of Capitalism

  1. No better alternatives

As the states are always democratic, this allows everyone to do what he or she thinks is right and this will lead to the public not having any other alternatives to choose from in the field of trade. Every trader will put the price on the product without the government being involved and this may make other traders exploit the consumers.

  1. It creates economic growth

It may lead to economic growth as each and everyone will struggle to use ways that are creative to get more income hence improving their living standards which will eventually improve the economic status of the country.

  1. Innovation

There will be an improvement in the field of innovation as everyone will strive to come up with something that is new in order for him or her to get to a better place hence improvement in the field of innovation.

  1. Efficiency in production

Firms that are found in countries where there is capitalism will produce goods that are on-demand to meet the needs of the consumers. The goods that will be produced will be of high quality hence the consumers will enjoy a wide variety of high-quality goods.

  1. Economic freedom leads to political freedom

When the government is not involved in the setting of the prices of the goods, there will be political freedom whereby the producers are the ones that decide on the prices of the goods.

  1. There is consumer choice

The consumers are able to choose what they would like to consume and this makes them become careful about what is good for their health without the government necessarily getting involved in it. This leads to high-quality goods as there will be competition.

  1. It brings people together

Capitalism allows people to be together as they are able to assist each other to pool their resources together hence development in the country.

Cons of Capitalism

  1. It does not provide for everyone

Those who lack skills such as the elderly, children, and the disabled are not provided for. As there are no government policies that value family unity, this makes it possible for others to suffer.

  1. It does not provide equality of opportunity

Those without good education may not find something good to do in society and this may divide the society into classes.

  1. It ignores external costs

Costs such as pollution and climate change will not be taken into consideration as everyone will be struggling to improve his or her production without necessarily taking into consideration the negative effects that he or she may cause to nature.

  1. Firms can gain a monopoly

Strong firms are able to gain a monopoly in the market hence the other firms will not get an opportunity to rise up to other levels.

  1. Consumer exploitation

When a firm gains monopoly in the market, it becomes easier for the firm to exploit consumers as it will be the best firm at that moment hence putting high prices on the products.

  1. Exploitation of workers

The workers may be given lower wages compared to the work they do as there will be no rules governing the firm hence being exploited by the firms.

  1. It will create an anti-social system

People will not be able to socialize with others well and this may make them not assist each other in times of need forgetting that “No human being is an island”. We need each other for us to live peacefully.

  1. Poor working conditions

The firms will not put into consideration the working conditions of the workers hence exposing them to dangers that lead to their death and they may not compensate the families at the end.

  1. It may lead to wars

People get into wars so that they can get their share by force. This may cause a lot of disasters as many may be injured or even die.

  1. High crime rates

There will be an increase in crime rates as the ones that do not have what to eat may end up robbing people for them to get food.

  1. It leads to dictatorship

The managers in the firm may dictate the juniors and they may not have a chance of defending themselves hence easily exploited.


Capitalism can cause more problems in a country than good as people will operate under their own rules which will eventually result in wars that may leave many injured and to lose their loved ones. The government needs to come in and control the citizens so that the problems that can be created by capitalism may be minimized.


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