We explain to you what the advantages and disadvantages of capitalism are. Also, what was its origin and its history until today.
Capitalism
Capitalism It is a socioeconomic order supported by private property, which proposes the accumulation of capital as a reflection of the production of goods and services, as well as investment and financial speculation, depositing the means of production in private hands. It is the prevailing economic system in the entire world at the beginning of the 21st century.
Capitalism It emerged in England, thanks to the Industrial Revolution of the 18th and 19th centuries and the rise of the bourgeoisie as the dominant social class in the Modern Age. During the 20th century it was the system defended by the liberal democracies of the West, against the communist totalitarianism of the so-called “Eastern Bloc” led by the Soviet Union, in what is known as the Cold War.
Although the conflict culminated in the late 1980s and early 1990s, with an overwhelming triumph of capitalism throughout the world, the truth is that capitalism has not stopped receiving criticism and questioning.
There are many who consider it urgent to propose a new system, one that knows how to preserve the advantages of capitalism while better facing its disadvantages. The problem is precisely in agreeing on what the advantages and disadvantages are.
It is also important to understand that there is no single and exclusive way to apply capitalism. There are methods with more or less State intervention, with more or less emphasis on the social, in a wide range of trends that depend on the economic, social, cultural and historical conditions of each country.
See also: Capitalism and socialism
Advantages of capitalism
In general, the advantages of capitalism have to do with its great capacity for production and innovation, especially in the framework of a highly industrialized society, which for many is in itself a sign of progress. In any case, we can summarize the advantages of capitalism in the following points:
- Commercial and entrepreneurial freedom. Capitalism is a system that encourages and rewards innovation, risk and entrepreneurship, allowing immense economic mobility, which brings with it various forms of production of goods and services.
- The capacity for accumulation. By relying on private property, capitalism allows the accumulation of goods or capital, so that large sums of money can then be invested in initiatives considered worthwhile: in scientific research, for example, or simply in making even more money. .
- The democratizing effect of capital. Compared to previous systems, such as the feudal system, in which birth status determined access to wealth (noble blood or commoner blood), capitalism proposes a system that only understands money: those who have it and those who do not, without distinguish between nobles and commoners (immovable categories, for life), but between poor and rich (categories that, in principle, can change). This allows for greater redistribution of wealth than in feudal systems.
- Greater ease of consumption. Capitalism is usually accompanied by societies with high consumption of goods and services, since its dynamic of self-regulation of the market (supply and demand) encourages competition between producers and marketers to conquer the consuming public. This means that consumers ideally have a variety of products and services to choose from, and this allows for great freedom of consumption.
Disadvantages of capitalism
The other side of the coin of capitalism tends to focus on its more or less uncontrollable effects on the environment, and its inequality of social opportunities in a capital-centered system. We can summarize the disadvantages of the system in the following:
- Ecological havoc. Capitalism is inseparable from industrial production, and the latter, at least as it has been carried out in the last two centuries, has had a brutal impact on the environment, the most tangible example of which is climate change. The indiscriminate exploitation of natural resources is unsustainable in the long term.
- Promotion of individualism. The idea that everyone must generate the money to pay for everything they want is an attractive idea when you are at the top, but terrifying for those at the bottom of society. The culture of individualism does not usually concern itself with collective well-being, and that often conflicts with dynamics of social control that require the collaboration and solidarity of citizens.
- economic inequality. Although capitalism allows the mobility of social classes, that is, classes are not determined in an immovable way as in feudal times, people who are born poor have many fewer opportunities than those who are born in the middle or upper class, and this encourages social classes stagnate. People with more purchasing power have access to more and better goods and services, receive better opportunities and can therefore aspire to better jobs and salaries, creating a gap between the poor and the rich that can often be impossible to bridge.
- consumerism. The consumer society built by industrial capitalism requires a consumer mass that is constantly purchasing new services and products, to keep the productive wheel moving. This created a culture of consumerism or irresponsible consumption, in which much more is consumed than what is needed, especially goods of low quality and short duration, which not only impoverishes the population and distracts it from more satisfactory long-term objectives. , but produces tons of waste monthly.
Continue with: Capitalist mode of production
References
- “Capitalism” on Wikipedia.
- “Critique of capitalism” on Wikipedia.
- “The pros and cons of capitalism and socialism” by Francisco Peñaranda and Jessica Herrera from the Universidad del Atlántico (Colombia) on Acedemia.edu.
