Answer to Question #2845 in Economics of Enterprise for Amy

Question

What are the advantages and disadvantages of capitalism?

Answer 1

Advantages of capitalism:
1) Little impact by the government, absence of those problems like corruption, total control, regulations that limit diversity and competition,& lack of incentives and poor information.
2) Equal opportunities to every individual to make his own wealth that dependes only at efforts they put in.
3) In capitalism entrepreneurs& feel free to take risks and introduce more technological innovations that quickly causes structural changes and high rates of economic growth and labor productivity.
4) More efficient and competitive capitalist enterprises − there's no limit to how much wealth an individual can accumulate and how far he can progress in a capitalist economic system.

Disadvantages of Capitalism:
1) Vast imbalances in opportunity encourages revolt, because some individuals concentrate all the resources in their control, though wealth tends to redound to a small percentage of the population.
2) Immobility, that explains by difficult practically moving move factors of from an unprofitable sector to a new profitable industry.
3) Some individuals who have more power can construct rules that limit diversity and competition.
4) There is limited government control. And in a truly capitalist society with no government welfare great poverty is bound to occur.