Capitalism is an economic structure that allows private actors to control and own property. The free-market system also allows individuals to use their income to meet their own interests. Further, it enables businesses to coordinate the supply and demand chain by responding to people’s needs. Capitalism has been effective in the United States since it limits government interference on the market supply and demand chain. Nonetheless, it allows some degree of government intervention to protect private property and regulate some aspects of the economy. Primarily, the U.S. market is predominantly based on an autonomous system since demand and supply forces influence the prices of commodities and services. Capitalism in the United States is morally acceptable since it facilitates production diversity and promotes freedom and cooperation between market players.
Capitalism promotes freedom and cooperation among market players. In a capitalist economy, individuals have the liberty to decide what they want to buy and how much they wish to spend. It also allows them to make choices of where they live, work, and invest (Michel). The inability to make such decisions limits people’s freedom, which hinders them from exercising free will. Perhaps, the most important benefit of capitalism is cooperation between businesses and buyers. For example, if an individual wishes to install an air conditioning system, they call a contractor. Both of them must then agree on the price; the contractor asks for payment which is equivalent to its market value. Next, they must pay workers to perform the installation and liaise with air conditioning suppliers. Therefore, since these activities involve cooperation, capitalism promotes healthy and mutual relationships. Statism, a market system that does not favor capitalism, limits people’s freedom to make decision and cooperate for a common good.
Furthermore, capitalism in the United States is effective because it promotes diversity in production, but it also accommodates some level of state control. Business owners are governed by a laissez-faire economy since they have the liberty to determine their business models and processes (Block 1173). In a capitalist system, all players have equal chances of success because it is founded on a free market/democratic framework. Commonly, democracy allows citizens to focus on a wide range of issues when making business decisions. However, such decisions must align with the rule of law, even though capitalism guarantees market autonomy. The U.S. government collaborates with private entities to offer federal grant licenses to control business activities (Block 1169). Besides, the federal and state administrations are responsible for monitoring the minimum wages, corporate taxes, trade restrictions, and duties (Scott 23). These regulations promote healthy competition and develop trade equilibrium in the market, which are critical elements of a free market. Therefore, capitalism ensures that workers are remunerated fairly and businesses operate in a healthy competition.
Capitalism is an effective system because of its positive effect on production diversification and cooperation between businesses and buyers. In a capitalist system, all individuals have equal chances of success due to the fact that it is founded on a free market framework. However, it accommodates some degree of government intervention in order to ensure that enterprises comply with certain standards and business ethics. Overall, without capitalism, people would not have the freedom to make free choices and cooperate to attain a common goal.
Block, Fred. “Problems with the Concept of Capitalism in the Social Sciences.” Environment and Planning A: Economy and Space, vol. 51, no. 5, 2019, pp. 1166-77.
Michel, Matt. “The Reasons Why Capitalism Is Morally Superior.” Contracting Business, 25 Sep. 2015, www.contractingbusiness.com/residential-hvac/article/20868486/ten-reasons-why-capitalism-is-morally-superior. Accessed 9 Feb. 2020.
Scott, Bruce R. The Political Economy of Capitalism. Division of Research, Harvard
Business School, 2006.