Advantages And Disadvantages of Capitalism - SS1 Economics Lesson Note
Advantages of Capitalism:
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Economic efficiency: Capitalism promotes competition and efficiency, which results in lower prices for goods and services and an overall increase in economic productivity.
Consumer sovereignty: In a capitalist system, consumers have the freedom to choose which goods and services they want to buy, and producers must respond to these choices in order to remain competitive.
Innovation: Capitalism encourages innovation and entrepreneurship, which leads to the development of new products, services, and technologies.
Flexibility: Capitalism is adaptable to changing economic conditions, as businesses can quickly adjust to market demands and consumer preferences.
Economic freedom: Capitalism provides individuals and businesses with the freedom to make economic decisions and pursue their own self-interest, which can lead to greater economic opportunity and prosperity.
Disadvantages of Capitalism:
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Wealth inequality: Capitalism can result in unequal distribution of wealth, as some individuals and businesses accumulate vast amounts of wealth while others struggle to make ends meet.
Exploitation: Capitalism can lead to the exploitation of workers, as businesses seek to maximize profits by paying low wages and providing poor working conditions.
Lack of social welfare: Capitalism does not guarantee access to basic necessities such as healthcare, education, and housing, which can lead to social inequality and suffering.
Environmental degradation: Capitalism can result in environmental degradation, as businesses prioritize profits over environmental sustainability.