Capitalism And Neo Liberalism

Capitalism is a predominant economic system used around the world, while capitalism promotes economic growth and free trade the are also negative effects caused by this economic system. The purpose of this essay is to discuss why although capitalism has negative effects it’s the best economic system currently in use. First, this essay will define and explain capitalism and neo liberalism. Second, the benefits of capitalism and neo liberalism will be discussed. Third, the essay will discuss that lack of alternative economic systems.

The leading economic system capitalism can be described as a laissez faire system where all of the private sector businesses are permitted to function with their own interests and goals in mind. Within the capitalist
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As Adler (2013) argues capitalism has three vital features, which contain significant benefits. First, capitalism creates significant competition between all competitors among profit maximizing firm, which leads to new and innovative advancements in multiple aspects. Furthermore Competition among different profit maximizing also promotes efficiency and high-quality standards since inefficient practices will lead firms to failure. Second, capitalism is additionally is a dynamic economic system that is able to adapt to different situations, while being creative. Third, Adler (2013) also states that capitalism is a growth-oriented system that implies a wage-based system that enables workers to use contracts and also trade on their own accord. As Adler (2013) further argues the wage-based system provides further benefits such individuals being able to create their own business or being able to change their employers. Neo liberalism correspondingly provides a range of positive effects such as flexible labor for individuals. Furthermore neo liberalism supports technological developments among businesses due to competition. Altogether neo liberalism and capitalism provide a variety of positives such as economic growth, innovation, and …show more content…
However there are other economic systems such as socialism. Although Farooq (2011) claims that socialism contains a wide range of negatives. First, socialism contains a lack of economic freedom, as the government that acts as a centralized body controls all entities. Individuals also are not allowed to change jobs or own their own assets. Second, within a socialist economy all aspects of the economy are planned and selected by the government, thus supply and demand do not play a part in a socialist economy. The lack of supply and demand affects the economy negatively in the long term. Third, in the socialist economy consumers in the socialist economy suffer from an absence of choices of goods and services. Fourth, evidence suggests that socialism contains a definite segregation between the poor and the rich, due to the planned economy. Thus As Berlinski (2008) argues there are no viable alternatives for

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