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What are the pros and cons of capitalism? Show more Show less
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Capitalism is an economic system in which the four factors of production (entrepreneurship, capital goods, natural resources, and labor) are owned by private entities with the aim of generating a profit. Capitalism requires a free market economy driven by supply and demand. There is a lack of government intervention. Competition helps keep prices moderate and production efficient. This stands in opposition to socialism, a system in which the means of production are owned by the state.

Capitalism is good Show more Show less

There are many positives of capitalism. Capitalism ensures efficiency because it is self-regulated through competition. It promotes innovation, freedom, and opportunity. Capitalism meets the needs of the people and is beneficial to societies as a whole.
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Capitalism promotes innovation in a free market economy

A free market encourages innovation because people have incentives to work harder, which leads to higher productivity. Innovation allows societies to develop rapidly and gives people a better quality of life.
Capitalism

The Argument

Capitalism promotes and rewards innovation from people and companies. Innovation is encouraged for both goods and services at all levels. Companies invest in research and development in an effort to create better products so that they can sell more and increase their profits. This leads to huge advances, especially in fields like medicine and technology. The system also rewards companies for constantly making improvements to already existing products and technologies.[1] Capitalism creates an incentive for companies to constantly strive to keep improving because that is how they can earn the most money. These continual improvements benefit consumes because it leads to more choices of goods. Due to the competitive nature of capitalism, citizens also have an incentive to work harder. People know that with creativity and hard work (the backbone of innovation) they can become the next Bill Gates or Jeff Bezos. This results in a culture of productivity that increases overall efficiency, allowing for civilizations to develop rapidly as new technological advancements are being made.

Counter arguments

One result of capitalism has been the formation of monopolies. The incentives for innovation (such as competition) do not occur under monopolies. This results in large corporations becoming lax in their development and suppressing or buying new products in an effort to protect their dominant position. This is bad for a free market and bad for innovation.

Proponents

Premises

[P1] Under capitalism, people have incentives to work harder, leading to higher productivity and increased innovation.

Rejecting the premises

[Rejecting P1] Incentives for innovation do not occur under monopolies (which occur in capitalism).

References

  1. https://www.cato.org/policy-report/julyaugust-2013/why-capitalism-awesome
This page was last edited on Monday, 2 Nov 2020 at 23:21 UTC

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