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< Back to question What are the pros and cons of capitalism? Show more Show less

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 is self-regulatory

Capitalism ensures efficiency because it is self-regulated through competition. Companies must adhere to the ethical and moral standards of society, or else be at risk of being damaged by boycotts.
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Proponents


The Argument

Capitalism ensures efficiency because it is self-regulated through competition. Companies must make the best use of their resources and improve their organization. They need to be efficient in their production of goods and services or consumers will go elsewhere. Supply and demand regulate the market without government interference. A self-regulatory economic system also prevents companies with unethical business practices from flourishing. Businesses must adhere to the widely accepted moral and ethical standards of society, or else consumers may choose to boycott that business (for example, it may be revealed that a company racially discriminates against applicants, prompting boycotts). The free market can promote ethical and non-discriminatory behavior in companies and does so in a way that is self-regulatory and requires little government interference (as long as companies are not breaking any laws). One example is when PETA (People for the Ethical Treatment of Animals) promoted boycotts of several major airlines for transporting wild monkeys to laboratories for medical experimentation. "Due to Consumer pressure, other major airlines, including United, Air China, Delta, and American have reportedly stopped transporting primates for use in experiments. PETA was urging consumers to boycott Air France until the company also changes its policy on transporting primates."[1]

Counter arguments

Capitalism isn't self-regulated. Governments regulate, subsidize, and bailout corporations. It is also hard to expect consumers to regulate ethical business practices when the culture accepts poor business practices, the law protects them, and information on which businesses are unethical is hard to come by. This is especially true in instances where the unethical practices are purposely hidden such as fossil fuel companies burying the reports that predicted the climate crisis.[2]

Premises

[P1] Capitalism ensures efficiency because it is self-regulated through competition. [P2] The capitalist system allows people to 'vote with their dollar'. [P3] It is a good system as it means businesses can be penalized for poor business practices.

Rejecting the premises

[Rejecting P1] If capitalism was self-regulated then governments would not need to regulate, subsidize, and bailout corporations. [Rejecting P3] When poor business practices are the norm, the system cannot be considered good.

References

  1. https://www.ethicalconsumer.org/ethicalcampaigns/boycotts
  2. https://www.theguardian.com/environment/climate-consensus-97-per-cent/2018/sep/19/shell-and-exxons-secret-1980s-climate-change-warnings

This page was last edited on Friday, 17 Jul 2020 at 00:00 UTC

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