Everything You Need to Know About Capitalism: Good or Bad For the Economy?

 

Source: World Atlas

To begin with the era of growing industrialization and urbanization, trade and industry have gained huge momentum in this 21st Century (CE). The reason behind this huge momentum in the field of trade and industry is the growing Capitalism. Many of us have a general idea about what capitalism is, but let's dwell on this article to understand it in more detail, the pros and cons of it, its effects on the people, the state, and many more.

Understanding The Concept Of Capitalism

So we all know that Capitalism means when trade and industry are under the control of private owners to generate profit rather than the state. Now many of us may claim that Capitalism helps in the political as well as economic development of a country. For example, the leading capitalist country U.S has a well-established political system and a strong position in terms of its economic system. It is ranked 3rd amongst the 32 countries in terms of its economy.

Pluses Or Merits Of Capitalism

Also, capitalism helps to ensure that there is an efficient chain of production, consumption, and dissemination. This means that the private owners ensure the proper working of this chain. For example, a private owner will keep of track a change in the taste of products for its consumer and would definitely bring in some changes in the products that are to be produced, further it is also kept in check how that product is disseminated or distributed and how it is consumed by the people that is their reaction towards the product in any form.

The concept of capitalism also gives freedom to free market producers to produce goods catering to the public's needs and interests. It also helps the people to rise, grow and develop by crossing the bars of poverty and encourages improved living standards.

Minuses Or Demerits Of Capitalism

Source - World Atlas 

Till now we talked about the good aspects of capitalism. Now let's have a look at its negative aspect.

The amount of positive outlook capitalism offers, also has the same amount of negative aspects. Till now we came to know that private owners help to boost the economy of the country, create good catering to the public interest, improve health standards, and many more, but also this private ownership or monopoly over the market leads to inequality, the commodification of people, unsustainable and many more.

Privatization also tends to increase the cost of healthy and beneficial products and thus it does not lead to equal distribution of those products as everyone cannot afford such costly products. Though capitalism enhances the scope of healthy competition, indeed this competition between the markets generally removes small manufacturers that is it harms their making of products and also its distribution. 

For example, if you have been given a choice to buy a make-up product from a MAC store or from a local shop, you would definitely purchase it from MAC rather than from a local shop. The reason behind its long-lasting and made with better ingredients than the latter. Thus, this not only removes them from competition but also harms their selling leading to loss.

Also, the benefits of capitalism go to those who are already privileged and nothing remains in the hands of the unprivileged. All sorts of private universities and colleges have increased their fee structure. Now the benefits of education from these universities or colleges go to those kids who can afford to manage the fees. 

Rest, those who cannot afford cannot get its benefits and thus many students miss out on an opportunity to be a part of the prestigious institutes despite they have the caliber and potential to do much better than the privileged ones.

Theory Of Commodification: An Integral Part Of Capitalism

Capitalism also leads to the commodification of humans. That is they try and indeed do sell us and buy us as commodities and these functions are very well carried out by the media. For example, 24-carat gold plated jewelry with a diamond is being advertised day and night by media houses either through papers or television. Now people being the main consumers of ads will definitely buy the product based on the fact they are highly influenced by the media. 

Thus this buying products increases the revenue of the company selling it through ads and as we all know that ads serve as a prime source of revenue for media houses, thus it increases their revenue too. So, humans are basically sold by the companies to media houses through ads for products and media houses buy people through their description of products in ads.

Conclusion

In general, what this article says is that every concept has two perspectives. Good or bad. It depends on how and which perspective we want to implement. Capitalism does benefit us in a lot of ways. It depends on private owners on how they utilize it for the betterment of the country by removing its negative connotation. It is also important for us to understand that just the implementation of the capitalist concept does not fulfill the requirement of a stable economic and political system. Before and after its implementation it is important to keep a check on how it works. Is it detrimental to society's needs or is it implemented more than its needs? If that is the case then it would end up in a situation like china or not then we might end up in a situation like the U.S.A or even better than that.

Written By - Riya Upadhyaya

Edited by - Kritika Sharma