CAPITALISM : GOOD OR BAD...

There is always a debate regarding which is more sustainable CAPITALISTIC ECONOMY or SOCIALISTIC ECONOMY. Today I am going to highlight the pros and cons of capitalistic economy, the impact it creates on people like you and me, impact on environment, etc.

WHAT IS CAPITALISM?

In simple words capitalism means the entity or sector which is held mostly by the private sector. All the inputs like labour are owned by private entities. 

PROS OF CAPITALISM:

A) DECENTRALIZATION: The most successful idea of capitalism is decentralization. In capitalist countries everyone has the freedom to open a business with less formalities. These businesses work independently. On the other hand in socialist countries everything is controlled by the government whether it is production, labour, wages, investments, etc. Due to this there is centralization of power and it affects the efficiency which in turn slows down the growth of economy.

B) INOVATION: In capitalist countries every business works independently due to which there is competition within the industry. As a result everyone tries to become best in their field, this leads to innovation. Plus they earn "profit" in the form of incentive. 

C) TECNOLOGICAL ADVANCEMENT: If you observe in the last 100 years there was a huge technological advancement in the form of computers, internet, mobile phones, etc. which was possible due to capitalistic ideas.

D) STANDARD OF LIVING: Due to capitalism there was a huge decline in poverty, the education has improved, due to which the standard of living has improved a lot. 

E) FREE CHOICES: The main advantage captalism has, it can provide you end number of choices in different sectors. Due to which the consumer can select the best product that is available in the market.

CONS OF CAPITALISM:

A) MONOPOLY: At times we see that there is monopoly in capitalistic economy. Many companies merge themselves or purchase small companies to become big. Due to this there is monoploy in that particular sector. For eg: recently Myntra was acquired by Flipkart. Flipkart was then acquired by Walmart. In social media world Facebook is considered to be the monopoly as it owns WhatsApp and Instagram. 

B) INEQUALITY: Due to monopoly small companies cannot compete with large giants. Thus the factor of "competition" in reality does not exist.

C) INCOME INEQUALITY: The bigger the companies the larger the wealth goes on increasing. According to a report, world's top 1% people own 82% of the new wealth generated in today's world. Due to this poor people find it difficult to even buy the basic necessities like good food, education.

D) ENVIRONMENTAL DESTRUCTION: This is the main reson why people oppose the idea of capitalism. In the past 100 years the environmental destruction has drastically gone up. Climate change, extinction of biodiversity has affected the most.

E) FMCG ( FAST MOVING CONSUMER GOODS): Advertising has an important role in this. Everyday consumers are brainwashed with ads related to fast foods. Capitalism provides a free market to these companies. As a result companies can advertise their products in any possible way. Companies today create an artificial demand for products that they actually do not need but convince people into buying these goods. This gives rise to "consumerism".

CONCLUSION:

Many countries have come up with strategies to control the level of capitalism to an extent. Nowadays there are many rules implemented to contribute towards the society. CSR (Corporate Social Responsibility) is one such initiative that is being implemented. However this is not enough. Definately if we see in terms of development it has worked for many people. But we need to take into account the environmental factor otherwise in the near years we all gonna suffer together.