Capitalist Economy Essay

The right of private property means that plentiful factors such as land, factories, machinery, mines etc. atomic number 18 under private ownership. The owners of these factors are free to use them in the manner in which they like. The government whitethorn however, put some restrictions for the benefit of the society in general independence of attemptThis means that everybody engages in both economic activity he likes. More specifically he is free to set up both firm to beget goods.Freedom of choice for the consumersThis means that people in a capitalist economy are free to spend their income as they desire. This is known as consumer sovereignty. Consumers are sovereign in the sense that spring uprs produce only those goods which consumers are willing to buy.Profit motive In a capitalist economy, it is the profit 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 t o satisfy their wants. Advertisement, price cutting, price reduction 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 amongst the large and the poor in the income which mainly arises due to unequal distribution of property in such economies.Merits of capitalist economyThe following are the merits of capitalist economy1.To attract the consumer, the producer is in a horizon to bring out newer and finer varieties of goods 2.The existence of private property and the campaign force of profit motive results in high standard of surviving 3.Capitalism works automatically through the price mechanism 4.The freedom of enterprise results in maximum efficiency in production 5.All activities under capitalist economy enjoy the maximum amount of liberty and freedom 6.Under capitalism freedom of choice brings maximum satisfaction to consumers 7.Capitalism preserves fundamental rights such as righ t to freedom and right to private property 8.It rewards men of porta and enterpriseCountry as a whole benefits through increase 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 non 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 currency on advertisement and sale promotion activities like fairs, exhibitions etc., 5.Class conflict arises betwixt employer and employee and they will be paid low wages and this leads to strikes and lock outs 6.Productive resources are misused under capitalism and they are used for the production on luxuries as they are bound to bring high profits 7.Capitalism leads to the arrangement of monopolies and8.There is no security of employment for the workers and employees under capitalism.Referencehttp//classof1.com/homework-help/economics-homework-help/