Benefits of Capitalism-Free Samples for Students-Myassignmenthelp

Question: Discuss the Concepts and Methods that Economists use to measure these benefits (this discussion should include any shortcomings associated with these Economic Concepts and Methods. Answer: Introduction Capitalism can be defined as the economic and political construct in which the control of industries and resources of production are controlled by the private owners and the intervention of state or government is minimal or non-existent. Under capitalistic framework, the primary motive of the owners of the productive resources is to maximize profit. Benefits of Capitalism The capitalistic framework, though seem to be solely individual profit maximization oriented, there are several positive implications of this socio-political-economic framework on the overall society as well as on the individuals belonging to the society concerned. One of the primary objectives of the Capitalistic society is to maximize productivity and profitability. This implies that under Capitalism, the firms have incentives to maximize their efficiency, which requires them to be cost effective in the competitive environment. Thus, it can be asserted that Capitalism encourages efficiency maximization, which in turn facilitates innovation. Under Capitalism, with the absence of large and bureaucratic government, the consumers also enjoy the freedom to choose the goods, services which they desire to have, and from whom they want to avail the same. The presence of competition in the market also leads to efficient and competitive pricing of the goods and services, which benefits the consumers. Capitalism provides people with the incentives to work hard to earn more, which in turn is measure by the economists by observing the increase in the economic growth of the concerned country. However, the fruits of economic growth are expected to trickle down to all the socio-economic strata of the country, only when the country is not burdened with excessive inequality in distribution, which cannot be measured by the economic growth of the country.