Capitalist Economy Essay

The right of hush-hush property authority that productive factors such as land, factories, machinery, mines etc. are under private ownership. The owners of these factors are still to use them in the manner in which they like. The government may however, put some restrictions for the benefit of the society in general emancipation of enterpriseThis means that everybody engages in any economic activity he likes. More specifically he is free to set up any firm to produce goods.Freedom of choice for the consumersThis means that mickle in a capitalist economy are free to spend their income as they desire. This is known as consumer self-directedty. Consumers are sovereign in the sense that producers produce only those goods which consumers are willing to buy.Profit motive In a capitalist economy, it is the win motive which forces or induces people to work and produce Competition Competition prevails among the sellers to sell their goods and among buyers to obtain goods to satisfy thei r wants. Advertisement, price cutting, discount etc., are found to be the normal methods of competition in any capitalist economy.Inequalities of incomes There is generally a wide gap of income between the rich and the poor in the income which mainly arises due to unequal dissemination of property in such economies.Merits of capitalist economyThe interest are the merits of capitalist economy1.To attract the consumer, the producer is in a position to commence out newer and finer varieties of goods 2.The existence of private property and the driving force of profit motive results in high standard of living 3.Capitalism works automatically through the price mechanism 4.The freedom of enterprise results in maximum efficiency in production 5.All activities under capitalism enjoy the maximum issue forth of liberty and freedom 6.Under capitalism freedom of choice brings maximum satisfaction to consumers 7.Capitalism preserves fundamental rights such as right to freedom and right to pr ivate property 8.It rewards men of initiative and enterpriseCountry as a whole benefits through growth of business talents, development of research etc.,Demerits of capitalismThe following are the demerits of capitalism1.In capitalism the enormous wealth produced is apportioned by a few. This causes rich richer and poor, poorer 2.Welfare is not protected under capitalism, because here the aim is profit and not the welfare of the people 3.Economic instability in terms of over production, economic depression, unemployment etc., is very common under capitalism 4.The producer spends huge amounts of silver on advertisement and sale promotion activities like fairs, exhibitions etc., 5.Class conflict arises between employer and employee and they will be paid low wages and this leads to strikes and lock outs 6.Productive resources are misuse under capitalism and they are used for the production on luxuries as they are bound to bring high profits 7.Capitalism leads to the formation of mono polies and8.There is no auspices of employment for the workers and employees under capitalism.Referencehttp//classof1.com/homework-help/economics-homework-help/