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The Pros And Cons of Capitalism

I thought I'd do a post on the pros and cons of capitalism. I think it is pretty apparent that capitalism is the best social system in existence and the only one that follows good moral values, such as individual freedom.

The Pros of Capitalism
  • You are free to make your own choices (right or wrong) in the market place.
  • You own your life and the means to produce for your life.
  • You can choose to run your own business or get a job with ease of government regulation.
  • As a consumer, you get the highest quality of products for the cheapest prices.
  • As a consumer, you get the highest variety of the types of goods and services you can purchase.
  • You are free to innovate and invent without the government getting in your way.
  • You don't have to pay taxes beyond that of the basics to protect your rights (police, courts, national defense, etc).
  • You vote with your dollars. If you don't like a particular store, you can always shop somewhere else.
  • You have the right to own property, which comes with the right to develop it as you choose.
  • You have the right to earn as much money as you want without having to answer to the government.
  • Capitalism has given the highest standards of living this earth has ever seen and no other system has ever been able to do this
  • Capitalism recognizes your right to pursuit of life, liberty and property.
The Cons of Capitalism

There really isn't any cons for capitalism. The only cons come from people that want to be able to tell people what to do or how to live their life. In capitalism, people are allowed to make their own choices, good or bad, and this seems to bother some that think they have the right to tell others how to live their life.

As a capitalist I feel unfortunate that people do sleep on the streets, but I can't feel bad for people that make the conscious choice to stick a needle full of heroine into their veins. Everyone is given the same level playing field and everyone can play.

This is what I think the pros and cons of capitalism are. It is the best social system ever devised and I (as well as you) owe capitalism for the great standard of living that we have.

If you liked this post you might be interested in reading my post on Stem Cell Research Pros and Cons. Also you might want to take a look at my Marijuana Legalization Pros and Cons post.


Anonymous said…
Has capitalism resulted in areas having the highest quality of life? I would argue that European countries tend to have higher qualities of life than the United States, and a fair share of those countries tend to be socialist.
Christopher said…
I'd have to disagree and really focus on in what "quality of life" means.

I know a lot of the reports that come out from the UN show that they have better quality of life, but when you actually look at what constitutes a better life, you can see it's not really related.

For example, they'll look at how much money is spent on welfare compared to the GDP. The view is that the more, the better.

Obviously that isn't a far depiction of "quality of life". Most people don't collect welfare, so it's actually pretty irrelevant.

I argue the fact that Americans make more money, have more disposable income, have more services and goods available to them, more personal and economic freedom. It all comes together for a great quality of life.
Candyland said…
although i'm all for capitalism, i do disagree with saying that it follows good moral values. the whole reason capitalism has been so successful is because it allows people to benefit from their work, thus they work hard and make money. Why do they do this? because they want money. the whole system is based on greed. i mean look at it 'Capitalism' do you know what capital is? the great thing about how the consumer gets to choose the product with the lowest price is that it causes many companies to resort to underhanded methods to make cheaper products, and thus more money.
i know this sounded really anti capitalist, so i just want to remind you that i actually think thus system is great
Christopher said…
Greed is just a negative word for self interest. I view greed as a good concept. We need people that are more interested in themselves. We need people that will at least take care of themselves. Today we have people telling others how to live their lives because they don't choose to live their own.

Greed is a good thing. What is the opposite of greed? Altruism. Altruism is not being greedy and giving to others, but to give to others, someone has to take it and that is greed.

Why is it a virtue to deprive yourself of what is yours and to give to others that selfishly take it, but if you try to keep it you're a sinner?
Anonymous said…
What a dumb article. How bias to show no cons of capitalism? Renders this article useless...
Christopher said…
Unfortunately there are no cons for capitalism. If they existed, I would of added them.

The people that see the cons in capitalism have a very odd view of the world, where they secretly hate freedom and think that some people exist for the sake of others.
Anonymous said…
What about exploitation and economic imperialism. The two things this world hates about us most. Before you say there are no cons, you should study history. Capitalism rapes goods and resources from less developed countries. Most of these countries (i.e. Latin America) were discovered and established because of supply and demand of resources. Cheap labor is necessary to lower prices and beat competitors so a pair of shoes cost 3 dollars to make by some taiwanese kid who will happily do it for 12 hours a day with no bathroom breaks cuz the last company paid a buck fifty. It's easy to argue that he wanted it and it gave him more money but he's 9 and still being exploited and living in poverty.
You sound like some republican who just read the fountainhead. You don't really know what you're talking about. It's easy to be egoist and care for your self-interest only, but morally, does your self-interest worth the exploitation of others so you can choose between a few more pairs a pants for a few less dollars.
By not providing any cons you're being ignorant.
Christopher said…
Hi Anonymous,

There are a lot of "assumptions" in your post that are bent in such a way to make it sound like capitalism is negative.

For example, you say "Capitalism rapes goods and resources from less developed countries." How do they "rape"? Extracting oil out of the ground and selling it is not "rape". It's what capitalism is about. It's called production.

"taiwanese kid who will happily do it for 12 hours a day with no bathroom breaks cuz the last company paid a buck fifty."

This kid can make their own choices. There is nothing wrong about hiring cheap labor. It's not immoral. If people want to work and you can get a great return on the exchange rate, than why is that a problem? If you're looking for the positive spin to that, a business is providing that child with a higher standard of living.

"It's easy to argue that he wanted it and it gave him more money but he's 9 and still being exploited and living in poverty. "

Anthropology shows us a lot of interesting things. It's not uncommon in any culture as it develops for children to work. In poor countries, the child works and eats, or doesn't and dies.

"You don't really know what you're talking about."

Thank you for telling me it. I'll make a mental note of that. Anything else you think I should know?

"It's easy to be egoist and care for your self-interest only, but morally, does your self-interest worth the exploitation of others so you can choose between a few more pairs a pants for a few less dollars. "

Absolutely. And they're not exploited by the way. They're acting as self-interested egoists themselves trying to earn some money.
Anonymous said…

I don't know what hole you crawled out of captain america, but there most definitely ARE cons to capitalism. do your research and quit being so biased. I'm American, but you don't see me behaving blindly and choosing to ignore problems associated with capitalism. so quit being pompous, and go suck an egg.
Anonymous said…
Extracting oil out of the ground leaves a hollow cocoon, like in the gulf where we do off shore drilling. It’s what helped make hurricane Katrina worse than it already was. its estimated that there is only 20 years of fossil fuel left.
Yes’ that is exactly what capitalism is about. The selling of goods creates capital.
I'm more concerned with people though.
You think there’s nothing wrong with cheap labor? There is nothing wrong with child labor? You say the kid has a choice, but what are they? Working for a $1.50 over $3? or according to your anthropological studies, work or death? Those aren’t much of choices.
That’s the problem, people born into circumstances they can’t control. No matter how hard he works, he and others will still live in poverty. They don’t get to reap the benefits of the system, they are slaves, like you and I. We just happen to be lucky enough to in a position to receive some benefits. In the end only a few really prosper from this system.
The business provides a job, but people still live in poverty, circumstances haven’t changed. What they also need is an education. What people need are food, healthcare and to be risen out of poverty. Of course the people will choose to work for a few extra bucks, obviously it’s in there best interest, but it doesn’t change much.
That’s the problem with cheap labor, people are slaves. And what’s it all for? A cheaper product? More capital for the business?
That’s why this exploitation is so easy to sell to people. You offer a better price that is still cheap. People will want it because they need it, it’s in there best interest, but it makes no difference.
I also said you were ignorant; you should take a mental note of that more importantly.
Anonymous said…
oh, you should go back to wikipedia and read up on your objectivism.
Autarch said…
You've made some great points and counter arguments, Christopher; At first i was shocked at your position of cons to socialism, but it seems justified as of now.
Anonymous said…
The child mention previously is forced into labor, you said that "This kid can make their own choices" and then "In poor countries, the child works and eats, or doesn't and dies." Seems like a pretty crappy choice. And this kid is creating a higher standard of living for himself as you had stated but is isn't as high of a standard of living than it would have been if the US hadn't taken all of the natural resources there. The boy is also going to end up working there for the rest of his life while the capitalist get cheaper products and thrive off of his lost. Another con of capitalism is that a monopoly may occur.
David said…
The reason why capitalism does work, and work it does when left alone, is because it realizes, and accepts, that man is self interested. The very basic example is that of the butcher who, in his own self interest, is helping others. Adam Smith referred to this as the concept of the invisible hand.

Now, someone gave an argument of cheap labor. I do believe Thomas Sowell gave the best response to that: "Those who vent their moral indignation over low pay for Third World workers employed by multinational companies ignore the plain fact that these workers' employers are usually supplying them with better opportunities than they had before, while those who are morally indignant on their behalf are providing them with nothing."

Is capitalism perfect? Of course not. But it is best.

The real question isn't what is wrong with capitalism, since capitalism states very clear that MAN and man alone is where the error lies, (as someone, I forgot who, put it..capitalism didn't fail. we failed capitalism) but what economic system is better?

Anonymous posted about the people born in less than fortunate circumstances and being a victim of such circumstance.

Capitalism, however, is the only economic system which caters specifically to the people in those brackets. There are more rags to riches stories then I could even begin to type. More stories of success concerning immigrants coming to America and making something for themselves. The so called robber baron, Andrew Carnegie, was born poor.

Capitalism allows growth, unlimited growth and unlimited possibilities. Capitalism sees those in third world countries and gives them an opportunity to change it.

While other economic systems are fit to keep those people in the same situation.

Countries with a capitalist system are the more innovative and have a higher lever of productivity.

Now America is not a pure capitalist society. But when their are errors in our economy it is capitalism that is blamed, even though all it takes is a basic course in Economics to know that government intrusion into the market creates more long term problems than it solves.

But capitalism isn't sufficient on its own. You need capitalism and a limited government. In America our government grows every year. And capitalism, which works when by the people, is being seen as something archaic; dated. But it isn't that, it is the two do not mix. A large government which uses a capitalist system is just as corrupt as a large government that uses a socialist system.
Tony said…
Capitalism is the best economic system there is but it does have it flaws.

The first being with public goods. Things such as national defense, police protection, roads, etc. These thing will not be produced by the public sector in efficient quantities. With these good nonpayers, or freeriders, are not prevented from benefiting from the good and a persons use of the good does not prevent others from using it.

It is very similar with pollution. When someone drives their car it causes pollution that everyone must live with weather or not they have a car.

This is why there is a need for government to supply goods that will not naturally be produced in sufficient quantities and to help regulate other things such as pollution.

The idea that capitalism exploits workers is so subjective to what you consider exploitation. I could create two different definitions of what to consider exploitation and with one prove that I was being exploited at my job and with the other prove that those children make $3 a day were not being exploited.

Marx spent his whole life trying to prove that capitalism exploited workers and could not. His definition was also to such an extreme that if he had proven it no one would be able to deny it.

Rather than saying workers are exploited you could say that it generates an unfair income distribution. However this is still up to interpretation of how unfair the distribution is and some could say that it is not at all unfair and they would be just as correct as anyone else. This is another time where government steps in and why there is a progressive tax in the United States where the more you make the more you are taxed.

As for those kids making $3 a day it is up to their own governments to decide how to level out the income distribution or if to at all. Generally in more developed capitalist systems the income distribution is much more even.

In a capitalist system you have the choice between many different products and you can chose not to purchase items that you feel exploited these workers and it will probably cost you a little and if enough people have the same feeling as you companies outsourcing labor to these people will go out of business or will stop using that labor. This is how you can vote with you money.

If a socialist country, where there are generally few choices in products, should decided to outsource to countries where as you would say workers are being exploited you may have no other competing good to choose that is not made from "exploited labor".

Capitalism will never use up the last barrel of oil or use up the earths natural resources because it will be to expensive. Meaning that it will become cheaper to use other forms of energy such as solar power and to develop new technology.
Anonymous said…
Consumers regulating the market can also be seen as a Con. Based on the general rule that when shopping for food, given a choice between two similar meat, egg, or dairy products, people usually buy the cheaper one without considering the health factors involved. Whereas the cheaper, generic canned foods are usually overlooked, even though they are usually healthier than a heavily advertised name brand canned food.
Anonymous said…
"Everyone is given the same level playing field and everyone can play."

are you kidding me? how shadowed are you? have you ever opened your eyes and thought about reality, rather than you nice house and nice material possessions?
whatever said…
Anonymous you seem to not understand that yes these people are victims of circumstance in their countries, but it isn't the responsibility of businesses to provide healthcare, higher wages, and an education to these people. If they did their business would collapse. These people working for such low wages are not doing so because of Capitalism. China for example, where they are communist an extreme version of socialism, and the opposite of capitalism doesn't provide health care, education, and decent wage minimums.If capitalist didn't provide jobs for these people they would essentially have no money for food.
Anonymous said…
yea there are cons. things that Adam Smith neglects and Kerl Marx uses. in capitalistic society, greed CAN be bad. competitors can become to powerful and monopolies could be created, thus jeopardizing the whole situation. this would also set the proletariates back even further, especially back when capitalism was just picking up
David T said…
First Capitalism is flawed. End of discussion. It's sort of axiomatic that Capitalism is flawed. Its, mega-flawed, ungodly, horrifically, outrageously flawed. It's flawed with a big, fat capital F. But, it's the best of the economic systems that have been tried. So far. Let's not over look the many glaring inequalities associated with pure Capitalism, and the more it leans to the anarcho-capitalist, individualist, greed-is-good ideas the more flawed it becomes. Can't we just accept it as that. Capitalism's not good but it is better than the rest. And another thing. China currently is not communist. In the early 80's China converted to a mixed economy. Pick up a book for Gods sake.
Christopher said…
Hi Anonymous,

You say that greed is bad because that can lead to powerful monopolies.

Ummm, can you name a powerful monopoly as an example? Remember, don't pick any that have their monopoly provided by the government because that is not capitalist.

It's true that monopolies can exist in a free market society. Powerful ones don't really do. Weak ones do.

For example, a small town might only have one gas station and that gas station has a monopoly on the local market.

Are monopolies bad? Prove it to me.
Christopher said…
Hi David T,

You wrote an entire paragraph and said nothing. You provided no evidence or argument.

Like you said at the start, end of discussion.
Anonymous said…
I know this is an old article but I just want to say one thing;

Christopher; fo course monoplolies are bad. I thought you wanted competition in the market place? Most capitalists would. Monopolies are the anti-thesis of competition. Then again, they're also inevitable under capitalism. And the bad part about them is that they were un elected people who have full control over our society. Clearly you are the one who hate freedom.

And China is clearly a capitalist society. Hong Kong, part of PRC, has the most free economy. Though I do think they have a plan to switch back to socialism in 50 years, which is good to see as capitalism has raped China and her people.
Christopher said…
Hi Anonymous,

Your entire argument is stating a position I apparently hold (which I don't) and then telling me I'm wrong. I don't hold the position that competition is the pinnacle of capitalism and it should be pushed no matter what. The free pursuit of individuals in the market place is capitalism. That's really the end of it. Competitive market or monopoly, it doesn't matter.

You say that monopolies are the anti-thesis of competition and you're right. Black is also the anti-thesis of light and Lindsay Lohan is also the anti-thesis of talent.

You say that monopolies are inevitable under capitalism. Can you name a single one in today's market?

Consider this a privilege that I replied. Normally, I'd just delete a message like that because it is clearly devoid of anything remotely near reality. Using "rape" to describe China's push into better standards of living would almost be laughable if you really didn't believe it.
PharaohYusef said…
It is the best but it's definitely not perfect. There is no utopia. you can not generalize that that every american has a fair chance. Not all schools are the same so everyone is not getting the same education. Everyone doesn't have the same resources. One has a better opportunity to succeed in a capitalistic government but it does have it's flaws. Anything man made has flaws. Man is not perfect.
Anonymous said…
I don't agree with what u said that everyone is given the same level playing field. For example, people born in top society with much money have it much easier than people born in a low class family fighting to have food on the table.
Anonymous said…
You provide very good arguments Christopher and you clearly know what you talking about. On the other hand people who use words like capitalist regime and talk about environmental crisis's clearly don't understand what there are talking about. An example is ( i will not state my political orientation) is on Talk radio interview like the ones on NPR were the main usually Democratic anticaptialist host invites a soft spoken usually republican to "roast him" of make him seem the uneducated one were the host cuts off the guest with large overused words like and i quoit from posts found on their website "Too bad we're locked under this capitalist, artistically destructive regime" when the guest is in the middle of a "but" statement. The Democratic socialist party does everything its its power to try and malign the general reputation or the republican capitalist party (i don't know if every thing member of these party has the same economic goals but generally i have found this is their orientation) insted of getting real things done were for instance Obama's "brilliant(heavy sarcasm)" economic plan with dealing with the current healthcare problem while what we really need is jobs so people can work even the type of jobs that i have read people call "exploit people". True Capitalism always supports the good of the nation but not necessarily the people so people have a right to hate capitalism as they have a right to be anarchists and burn American flags in front of congress.
Anonymous said…
Capitalism inevitably results in unequal wealth distribution. In actual practice it appears that as the ranks of the wealthy grow the ranks of the poor also increase. At least that seems to be what is happening in the United States. It also appears that wherever there are great disparities of wealth in an area crime increases dramatically.

Another negative result of unrestrained capitalism is that the wealthy have little need to spend all of their wealth, so that they keep a great deal of the total wealth of the country invested and growing more family fortunes. As a result they can send their children to better schools getting better educations, and creating an ever-increasing gap between classes. The poor have more need to spend all of their income on the necessities, therefore can save little and accumulate little or no capital growth.

In a capitalist society the wealthy have disproportionate power to influence legislation which inevitably favors themselves, often at the expense of the less affluent. This also, all too often, results in the corruption of government officials, and increase of white-collar crime.

Although the wealthy provide the means of developing the natural resources of a nation, they often contribute mightily to its pollution and degradation. I think it could be argued that the streams and forests and minerals of the country ought to belong to all of its citizens, not the wealthy who gain access to strip mine and deforest or drill at the expense of an environment that we all share.

Even though we may concede that capitalism is the most successful among the economic systems, we must recognize that it is not without negative aspects or that there is no room for improvements. The smug American attitude which assumes that we excel at everything overlooks areas in which we might benefit by studying how someone else does things. The complexity and chaos of a health care system which leaves 45 million citizens to the mercy of emergency room treatment for minor ailments, which costs the taxpayers a higher pecentage of gross national income than any other nation, might well benefit by adapting some of the methods of those countries which cover all of their citizens with lower costs and better results.

Socialist and communist countries have often outstripped us in such areas as education and health care, and it makes sense that we ought to imitate whatever aspect of their successes would prove advantageous to ourselves. We first need to acknowledge that there is room for improvement in our still imperfect society.
askgenie said…
Hi Christopher,
Thank you so much for posting the pros and cons of capitalism. It gave me a lot of things to think about, and I agree with what you have said. It also helped me a lot with my college final.
Thank you!
Anonymous said…
I'm poor and I agree with what you all say. Capitalism is a good thing because it's the only system that truly inspires innovation to move forward. Socialism is good for the people that don't really want anything to fancy and just want a regular life. Capitalism helps all classes. If the poor don't want to work for the rich then why don't they just get together and start their own business, and out compete that guy. Socialism is good for all workers because everyone gets a fair share.

Nothing is perfect but I would rather choose capitalism because socialism will make poor people to dependent on the government, and they won't try to better themselves because they know that governments got their back, but eventually governments get fed up with taking care of everyone and that leads to communism.
Anonymous said…
ignorance is bliss... Stating no real cons of capitalism just tells me you have never really noticed the in equality of the big buisness moguls' greed.
Allow me to help start the cons for you, and i'll just list one and that should help...
capitalism is only a great thing for the top .1% of the country,and yields little results to the middle and lower class people. Most people already know the inequality of the economy, but the only reason we allow for it is so one day, we can possibly become well-to-do too.The big businesses know our hopes but in reality, they really have no plan what so ever to really share their profit and stand down for somebody new.
stephanieN. said…
Capitalism is a great economic system because anyone can work themseleves up the 'ladder of success' and everyone has an opportunity to navigate their lives in the right direction. There are many reasons why capitalism is one of the best forms of government. Although, capitalism does a lot of good to the economy, it crosses the line when there is an excess of money going into the pockets of the head of the company or corporation.This happens to be the main issue of the negitive effects of capitalism. Who is to say where too much money crosses the line? Yes, it is hard earned money that is well deserved but when 99% of Americans are struggling and living check by check, while just a scant 1% is living BIG it doesn't seem fair at all. It isn't the fault of a low income family not being able to pay their taxes on time, on top of that, with interest. These big corporatios are laying off employees so people won't be able to get a job. These people from low income communities are also getting their homes foreclosed because they aren't able to pay. Stuff like this happens everyday all over the country. The promblem at hand is not weather capitalism is good or bad. It's how to distribute the money in a fair way. Back in the day capitalism was a totally different story. The rich would give 50% back in taxes and still be able to live an extravegant lifestyle- now they only take about15%... Why do people just like their money sitting there keeping their bank accounts warm?? Most of the wealthy people won't even touch all of their money in their whole lifetime! There should definetly be some regulations.
Chris said…
This statement, 'Everyone is given the same level playing field and everyone can play' really bothers me! I agree with the second part but not everyone has earned their wealth some people are BORN into it and therefore have better opportunities from the start versus someone born into poverty. A poor person has to work much, much harder to achieve a level of wealth that some are lucky enough to have from the start and as someone who came from basically nothing, it's not an easy road!
Anonymous said…
I agree that everyone has an opportunity to play and the same level playing field. You can inherit money but that's not really "playing." The go getters are the go getters. They can come from the hood or the suburbs. Not everyone is willing to take a risk.

Madonna went to New York with $37 in her pocket in the 70s. She built an empire and has a net worth reaching a billion. She's played in the same playground we are all in as well as Oprah and so on...

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