advantages and disadvantages of capitalism



We explain what the advantages and disadvantages of capitalism are. Also, how was its origin and its history until today.

Capitalism encourages both investment and financial speculation.

The capitalism

The capitalism is a socio-economic order sustained in the private property, which proposes the accumulation of capital as a reflection of the production of goods and services, as well as the investment and financial speculation, depositing the means of production in private hands. It is the prevailing economic system in the entire world at the beginning of the 21st century.

Capitalism arose in England, thanks to the Industrial Revolution of the 18th and 19th centuries and the rise of the bourgeoisie What social class dominant in the Modern age. During the 20th century it was the system defended by the democracies liberals from the West, against the communist totalitarianism of the so-called "Eastern Bloc" that led the Soviet Union, in what is known as the Cold War.

Despite the fact that the conflict culminated in the late 1980s and early 1990s, with an overwhelming triumph of capitalism throughout the world, the truth is that capitalism has not stopped receiving criticism and questioning.

There are not a few who consider it urgent to propose a new system that knows how to preserve the advantages of capitalism and better face its disadvantages. The problem is, precisely, to agree on which are the advantages and which are the disadvantages.

It should also be understood that there is no single and exclusive way of applying capitalism. There are methods with more or less intervention of the Condition, with greater or lesser emphasis on the social, on a wide range of trends that depend on the economic, social, cultural and historical conditions of each country.

Advantages of capitalism

Capitalism offers a great capacity for production and innovation.

In general, the advantages of capitalism have to do with its great capacity for production and innovation, especially in the framework of a society highly industrialized, which for many is in itself a sign of progress. In any case, we can summarize the advantages of capitalism in the following points:

  • The Liberty commercial and entrepreneurship. Capitalism is a system that encourages and rewards innovation, risk and entrepreneurship, thus allowing immense economic mobility, which brings with it various forms of production of goods and services.
  • The capacity for accumulation. By sustaining itself in private property, capitalism allows the accumulation of goods or capital, in such a way that later large sums of money can be invested. money in initiatives considered worthy: in scientific research, for example, or simply in making even more money.
  • The democratizing effect of capital. Compared to previous systems, such as feudal, in which the birth status determined access to wealth (noble blood or plebeian blood), capitalism proposes a system that only understands money: those who have it and those who do not, without distinguishing between nobles and commoners (immovable categories , for life), but between poor and rich (categories that, in principle, can change). This allows for a greater redistribution of wealth than in feudal systems.
  • Greater facilities of consumption. Capitalism is usually accompanied by societies with high consumption of goods and services, since its dynamics of self-regulation of the market (offer Y demand) encourages competence among producers and marketers to conquer the public consumer. This means that consumers ideally have a variety of products and services to choose from, and this allows for great freedom of consumption.

Disadvantages of capitalism

In capitalism there is a great difference in access to opportunities for advancement.

The other side of the capitalism coin tends to focus on its more or less uncontrollable effects on the economy. environment, and his inequality of social opportunities in a capital-centered system. We can summarize the disadvantages of the system in the following:

  • Ecological havoc. Capitalism is inseparable from industrial production, and the latter, at least as it has been carried out in the last two centuries, has had a impact brutality on the environment, the most tangible example of which is the climate change. The exploitation indiscriminate of natural resources it is unsustainable in the long term.
  • Promotion of individualism. The idea that everyone must generate the money to pay whatever they want is an attractive idea when at the top, but terrifying for those at the bottom of society. The culture of individualism is rarely concerned with the welfare collective, and that often conflicts with dynamics of social control that require collaboration and solidarity of the citizens.
  • Economic inequality. Although capitalism allows the mobility of social classes, that is, classes are not fixed in an immovable way as in feudal times, people who are born poor have much fewer opportunities than those who are born into the middle or upper class, and this leads to social classes stagnate. People with more purchasing power have access to more and better goods and services, receive better opportunities and can therefore aspire to better jobs and pay, creating a gap between rich and poor that can often be impossible to bridge.
  • Consumerism. The consumer society built by industrial capitalism requires a consuming mass that is constantly buying new services and products, to keep the productive wheel rolling. This created a culture of consumerism or irresponsible consumption, in which much more is consumed than is needed, especially low-quality and short-lived goods, which not only impoverishes the population and distracts it from more satisfactory long-term goals Instead, it produces tons of waste each month.
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