Economic Systems:

When one thinks of Monopoly, they most always conquer with the board game. However, Monopoly was created to show the evils of capitalism. When referring to an economic system we are acknowledging a system of production and exchange of goods and services as well as an allocation  of resources in society. With better understanding, its a more organized way in which a state or nation allocates ( or distribute ) its resources and apportions goods and services in the nation. In one view, every economic system represents an attempt to solve these three questions/problems:

  • What goods and services shall be produced, and in what quantities?
  • How shall goods and services be produced? That is, by whom and with what resources and technologies?
  • For whom shall goods and services be produced? That is, who is to enjoy the benefits of the goods and services and how is the total product to be distributed among individuals and groups in the society?

Capitalism is an economic system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. Some of the main features of free-enterprise are individuals and how they engage as customers and citizens. Businesses and what and where production arises. The Market known as the central exchange of goods, influences of it as well. Income is also a main feature in which skills acquired and non control from the Government.

The benefits of Capitalism:

  • Economic freedom which helps with political freedom
  • Its efficient ( produce goods in which are demanded)
  • Economic growth (incentives to be innovative) *this helps to increase real GDP and lead to improved living standards
  • Health/ choices
  • social good (everyone benefits from each other) * invisible hand theory by: Adam Smith
  • Freedom (live the way you want)
  • Built on democracy
  • growth of economy
  • Class division

The costs of Capitalism:

  • Monopoly power (firms with monopoly power can exploit their position to charge higher prices)
  • Monopsony power (pay lower wages to workers)
  • social benefit ignored (pollution from production and harmful living standards)
  • Inherited wealth (based on legal right to private property)
  • fails to create equality of outcome and equality of opportunity

Acknowledging the cots of capitalism, I feel the benefits outweigh them. With capitalism you receive health benefits and much freedom. Your economy grow and expands with everyone benefitting from one another. Capitalism is also very efficient, in which demanded goods are produced with maximum variety.

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