The Capitalist System; Definition, Disadvantages, Advantages And Types Of Capitalism

Date: Jan 24, 2023, 10:10

The capitalist system has such an economic system whose basis is on the foundations of personal ownership and the owners of its capital are private individuals. These people are the same business owners with the capital and means of production such as factories, machines, technical equipment, raw materials, and other facilities, and use workers as a labor force for the rotation of this system.

The literal meaning of capital is something that includes land, factories, money, and material assets.

The most obvious form of capitalism is the free market. The free market is a limitless investment based on which capital owners can invest in any field that has the most profit, regardless of social and cultural considerations.

Capitalism, in terms of application, is a system of economic production and distribution of resources, which instead of planning economic decisions through centralized political methods such as socialism or feudalism, is done by decentralized, competitive, and voluntary choices.

capitalism pros and cons - Sarafi Afghanistan

Advantages and Disadvantages of Capitalism

Disadvantages

Class Gap: This means the distance and inequalities between the working class and the capitalist class.

Pollution: Manufacturing companies often lead to a lot of negative external effects such as air and noise pollution.

Friendly Capitalism: The support of businessmen by the government in the form of tax exemptions and financial aid is based on their close relations with each other.

Threat to Human Health: Companies produce any products that are profitable for them, without considering the physical and mental health of humans; Such as large chain companies of tobacco, alcoholic beverages, energy drinks, and the like.

Advantages

Free Competition: Companies use innovation to outdo their competitors in producing products.

Freedom of Work: The owners of the funds are free to implement any possible idea to gain more profit that leads to a lot of profit, and advertise it in their desired market.

Non-interference of the Government: The government does not interfere in economic activities and companies have complete authority over their decisions.

Profit Motive: Maximizing profit and capital is what promotes the level of production. The motivation of companies to surpass their competitors is to earn more profit.

Types of Capitalism

Mixed Capitalism: It is a type of capitalism in which the government owns part of the means of production and a specific share of it, not all of it. But the government prefers its interests based on its power over the interests of the private economy.

Anarcho-Capitalism: Capitalism is freedom in which all industries are left to private ownership, including public goods. In this type of capitalism, there is no government supervision over economic activities, and government officials do not set any regulations on them.

Welfare Capitalism: This type of capitalism, which is concerned with the social welfare of workers, includes policies such as state pensions, collective bargaining, health care, and industrial safety laws.

 

 

The system of capitalism, which is currently at the top of the ruling systems of the world, is the accepted system in the majority of the countries of the world, and like any other system, it has its supporters and opponents. In our country, during the two decades of this system's rule, all economic sectors including the government's financial system, domestic and foreign trade, state and private banks, Afghanistan's exchanges, and other economic affairs are affected by this system. Also, all the affairs and political issues of this country, including parliament, rules and regulations of public and private offices, government's external communications, local administrative system, and other departments were derived from the capitalist system.