What is capitalism ? Explain its advantages and disadvantages.
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its an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
The major benefits or advantages of capitalism are as under:
1. The resources are utilized efficiently and economically.
2. Producers, consumers and the workers all enjoy economic freedomand are free to work, as they like. Goods are produced according to the taste, preference and demand of consumers.
3. Capitalist system can make changes according to the needs and circumstances of the economy. It has inbuilt flexibility.
4. An automatic equilibrium is brought about by the operation of price mechanism and market forces. No central direction is required for the operation of the economy.
Disadvantages of Capitalism
The demerits or disadvantages of capitalism are given below:
1. In a capitalist economy, wealth enjoys the prestige in the society, which results in erosion of human values.
2. There is a large-scale wastage of resources due to unnecessary competition.
3. In capitalist system, owners of the means of production can earn more as compared to those who do not possess much means of production. This brings wide inequalities in the distribution of income and wealth.
4. In modern capitalist market group rivalries and price wars, price-agreements etc. are commonly found. Speculative practices also present in the system.
its an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
The major benefits or advantages of capitalism are as under:
1. The resources are utilized efficiently and economically.
2. Producers, consumers and the workers all enjoy economic freedomand are free to work, as they like. Goods are produced according to the taste, preference and demand of consumers.
3. Capitalist system can make changes according to the needs and circumstances of the economy. It has inbuilt flexibility.
4. An automatic equilibrium is brought about by the operation of price mechanism and market forces. No central direction is required for the operation of the economy.
Disadvantages of Capitalism
The demerits or disadvantages of capitalism are given below:
1. In a capitalist economy, wealth enjoys the prestige in the society, which results in erosion of human values.
2. There is a large-scale wastage of resources due to unnecessary competition.
3. In capitalist system, owners of the means of production can earn more as compared to those who do not possess much means of production. This brings wide inequalities in the distribution of income and wealth.
4. In modern capitalist market group rivalries and price wars, price-agreements etc. are commonly found. Speculative practices also present in the system.
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Answer: resources are used effectively
Explanation:
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