The Pros And Cons Of Capitalism

1175 Words 5 Pages
Register to read the introduction… However, this expansion of operations leads to a number of problems for competitors, consumers and governments. Bill Gates mentions the need for going into new markets, essentially pointing towards globalization (2). He gives the example of how Safaricom developed into a huge mobile company in Kenya (2). Safaricom can be regarded as a success story as far as capitalism is concerned but it also hints on the inherent flaw present in similar ventures. Private entities are profit maximizing and thus need to capture the market so these firms practice predatory pricing. They lower down their costs radically; as a result, competitors are unable to match these low prices and go out of business (Smith). Once, these firms have the market to themselves, they form a monopoly. The next step sees the companies raising their prices to exploit consumers. These consumers, thus, as mentioned above, have to pay these prices since no substitutes are available in the market anymore. An example is that of Microsoft itself. It practiced predatory pricing by providing the Internet Explorer for free to capture the market and now has established itself into a monopoly. Being a monopoly, Microsoft has raised the prices of its software sky high, exploiting the consumers in the process (Spaulding). Moreover, in certain cases, the governments get effected too. This happens when the firm is too influential and takes over almost everything in the …show more content…
Many people believe it to be the answer to economic inequality, unexplored areas, government inefficiency and social responsibility but Capitalism, in truth, fails to tackle all these problems. It has some inherent flaws, which not only ignore economic disparity but also perpetuate it. This system does well to explore new markets but ends up hurting the consumers, infant industries and governments there. It separates economics from the state but fails to do a number of important things without it. Capitalism claims to be a socially responsible system but falls flat without the government, preferring profits and turnovers over philanthropy. Capitalism, thus fails on each of the four criteria Mr. Bill Gates used to qualify as a system that would make the world a better

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