Economic Policy
July 12, 2022

Capitalism, the Greatest Economic System Ever

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What is Capitalism?

Capitalism is simply defined as an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. Some of the core characteristics of capitalism include a price system, private property, and voluntary exchange and labour. 

Why is Capitalism the Greatest?

Capitalism is the greatest economic system because it has numerous benefits and creates multiple opportunities for individuals in society. Some of these benefits include producing wealth and innovation, improving the lives of individuals, and giving power to the people. Capitalism allows individuals to participate in actions within the market based upon their own interests. 

Producing Wealth and Innovation

Within a capitalist society, every individual has the opportunity to create wealth within their lives. Without oppressive actions and force from the state, capitalism allows an individual to easily grow and prosper throughout the economy by allowing them to participate in whatever action they believe will benefit them the best. What capitalism does is reward individuals that have equipped themselves with skills that producers are willing to pay for. On the other hand, the main aspect of socialism is redistributing wealth so that every individual is equal. Why should a doctor have the same wealth as a pet sitter? One thing socialists get wrong is believing that the redistribution of wealth is a good and moral idea. Why should someone else's money be used to pay for another person's college? How is it right to strip away the wealth from an individual, when that wealth is that individual's private property? The difference in this is that capitalism rewards individuals for success and progress by allowing them to grow that wealth through investment and other actions within the market. On the other hand, socialism allows the opposite by stripping away that wealth to be redistributed throughout the economy. Capitalism produces innovation because competition is highly evident within a capitalistic market place. Private businesses compete to provide consumers with goods and services that are better, faster, and cheaper. This encourages companies to create better and improved products to satisfy customers and oust competition. There is always room for improvement within anything, and capitalism rewards improvement through purchases and investment. Consumers will purchase the goods or services they believe are the best. This drives producers to make the best products possible. 

Improving Lives

How does capitalism improve lives? This question can easily be answered by simply looking back in time. In 1820, over 90 percent of the world lived in extreme poverty. In 1990 around 30 percent of the world lived in extreme poverty. Today, less than 10 percent of the world's population lives in extreme poverty. Before the industrial revolution, the poor were lucky to find anything to eat. These individuals lacked running water, shelter, and basic sanitation. On the other hand, today the poor and rich both have access to and enjoy these basic necessities. People all across the world now have access to education, food, heating and cooling, travel, cars, vaccinations, etc. Many people bring up the income inequality argument. I believe that the true inequality is materialistic. For instance, individuals may not have access to what they believe is good food, good housing, nice cars, and cool clothes, but still have access to all of these goods even when they do not believe these goods are the nicest levels they can get. Poverty levels around the world have dropped rapidly. Thanks to improvements in healthcare and living standards brought about by capitalism, almost every country has an average life expectancy of over 70. This can be accredited to the free markets.

Giving the Power to the People

The right to choose is one of the core characteristics of a free market economy. Within a free market, an individual has the freedom to choose what producer they will purchase a good or service from, who they will conduct business with, where to live, what to do with your career, etc. Individuals are able to freely choose how to go about their lives. This creates a vast and prosperous marketplace because many careers and skills are flowing in from all over the place. Consumers are able to choose who to buy from which forces the producer to create the best good or service possible.The state does not force its citizens to do anything, so capitalism allows individuals to participate in actions within the market based upon their own interests and beliefs. Why should the state choose how we live our lives or only allow us to consume state produced goods? The state should not do this because every person has different needs, wants, and goals. The freedom of choice allows us to buy what we want and what careers to pursue which brings out the best of individuals. The freedom of choice represents the right of the individual person to be themselves in relationships, to make their own decisions, to be free from the author­ity of others, and to be able to choose how they wish to use their services or property rather than others. 

Shall We Not Forget

As many in history have experienced, capitalism is the ideal economic system for people around the world. Again, capitalism produces wealth and innovation, improves the lives of individuals, and gives power to the people. If it wasn’t for capitalism, you wouldn’t be able to read this article right now. Capitalism is and will always be better than socialism.