Pros And Cons Of Pure Capitalism

The allocation of scarce resources to people’s unlimited wants is a vital aspect of life which affects both welfare and fairness, and just how much each person gets depends on the economic system in place. In this essay I aim to argue in favour of regulated capitalism and show that it is in fact efficient, fair and practicable. In doing this, I will start by looking at the extreme cases that economic systems can take on and how these prove to have short comings. On one end of the spectrum we look firstly at pure capitalism and on the other end, pure socialism. I then go on to look at the consequences of these systems to identify the morally correct one based on the consequences that the economic system brings about. I will then end off by examining the best system, regulated capitalism, which refers to a system which acknowledges the flaws of pure capitalism and rectifies them by including socialist aspects to the system.

Pure capitalism refers to economic liberalism in an economy in which there is private ownership of factors of production, no government intervention and where individuals are responsible for their own welfare. Capitalism in its purest form is agreed to be more economically efficient but unfair when compared to socialism. Though pure capitalism is very theoretical and does not exist in reality, in a purely capitalist society the prosperity of the economy is fuelled by incentives. Adam Smith wrote, “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it”. This is in fact true because by the voluntary ability to act in our own self-interest we are willing to give up what we have for what we wish to have. This then requires that producers produce...

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...e to the result that regulated capitalism is the most morally favourable system.

In the above essay I have clearly shown how pure capitalism is efficient yet unfair on one end and how socialism is not fair as well as impracticable on the other end. The results attained proved that neither of these systems proves to be morally the best but that regulated capitalism is in fact the best available system. The fact that this system allows for efficiency in a regulated manner that minimizes exploitation and inequality as well as promotes fairness by introducing social safety nets and regulations that protect both the rich and the poor clearly makes it the better alternative. Thus, until a better economic system comes to light, regulated capitalism will remain the closest we can get to a morally acceptable system that benefits both individuals and the society at large.