What Are The Advantages And Disadvantages Of Capitalist Economic System?


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Ellie Hoe Profile
Ellie Hoe answered
Some of the advantages of capitalist Economic system are as follows :

1) Capitalist economies give an equal opportunity to every individual of the state to be wealthy and grow depending on the effort they put in and are generally considered to be "free" to write their own destiny and seek out their own prosperity.
2) Capitalist governance means little interference from the government in a command economic system and means an equal opportunity for all.
3) There's no limit to how much wealth an individual can accumulate and how far he can progress in a capitalist economic system.

Some disadvantages are:

1) It gives rise to rigid class systems where one class of individuals may remain as the unfortunate ones and the ones with all the resources in their control tend to cannibalize their share in economy at their expense.
2) Money tends to remain concentrated in a few hands and has limited circulation for the benefit of all, the downtrodden masses remain dependent on the "trickle down" effect.
melanie hou Profile
melanie hou answered
Capitalism (free markets specifically) has produced more wealth faster than any other economic scheme every implemented. That's a pretty big merit. I suppose a demerit would be that it also produces periodic expansions and contractions rather than a predictable stream of economic activity, but risk and reward are directly related, so you can hardly have the high growth of capitalism without the amplitudes of activity.
You will also find individual segments of a market that find capitalism inconvenient -- e.g. Incumbents who are forced to compete when they would rather have government protection for their positions.

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