Title: Capitalism | Intelligent Economist
Headings: Capitalism
Capitalism
Capitalism Definition
Characteristics of Capitalism
The Role of Government Intervention in a Capitalist Society
Pros and Cons of Capitalism
Advantages of Capitalism
1. Competition
2. Innovation
3. Political Freedom
Disadvantages of Capitalism
1. Marginalization
2. Externalities
3. Monopoly Power
4. Inequality
Capitalism vs. Socialism
Capitalism vs. Communism
Capitalism vs. Socialism vs. Communism in the Real World
Relationship Between Capitalism and Democracy
Capitalism and Democracy in the United States
Relationship Between Capitalism and Private Property
Capitalism Examples
Prateek Agarwal
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Content: Monopoly Power
Private ownership of the factors of production enables companies to gain monopoly power. These private companies with monopoly power can exploit their position to charge higher prices. Monopoly power also discourages companies to be innovative. 4. Inequality
It is crucial to note that systematic marginalization actually undermines the even playing field that is essential to the optimal functioning of a free market. It creates inequality, which has negative outcomes for those affected by it as well as for society as a whole in the long run. This is because those who are born into situations where they are marginalized (e.g. due to poverty) lack opportunities compared to those born with greater social advantages. In many cases, they suffer unjustly from a lack of having their basic needs met, let alone the opportunity to self-actualize. Lacking sufficient education, nutrition, support, etc., many will not be able to participate in the free market and contribute their skills and viewpoint to society.