Milton Friedman Theory on Capitalism
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FREE MARKET
Free market economy is an economy in which the allocation for resources is determine only by their supply and demand, its a market where buyers and sellers can make deals they wish to make without any interference ,except by the force of demand and supply. Adam Smith the wealth of a nation (1776) he claimed that the free market system is the best way to obtain the greatest good.
What is Capitalism?
Capitalism is a modernized way of free market, an economics system that is based on survival of the fittest Darwenian Concept.
Capitalism is an economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and re investment of profits gain in a free market.
ADVANTAGES OF CAPITALISM
Capitalist system is a great engine of human prosperity, besides creating incentives for industry.it has pulled hundreds of millions of people out of poverty around the world.
Financial incentives: people tend to work more only when there is a financial reward.
Cost of effective allocation of resources: Capitalism system ensure that resources are distributed according to people choices.
DISADVANTAGES OF CAPITALISM
Inequality: The benefits of capitalism are not equitably distributed their tends to be a rise in inequality.
Monopoly behaviour: This is whereby an organization or individual gains monopoly in a free market and exploit customers by charging higher prices on goods and services.
Immobility: Free markets are supposed to move factors from an unprofitable sector to a new profitable industry. This could be difficult because in the capitalist economic system inequality of wealth without government intervention will lead to great poverty, which can bring about diseases, homelessness and force migration.
Only the rich will get prosper, it allows people to pass wealth to their children.so people will be born with the merit and dis- merit that is nothing to do with their own effort. Capital tends to remain concentrated in a few hands and has limited circulation for the benefit of all.
ETHICS AND MORALITY OF CAPITALISM
Capitalism is neither moral nor immoral taking about capitalism as being moral, established the moral context in which business is done nor the context is all about how ethics in business is important to capitalism in a democratic society. People have to be compensated for work, marketing cannot be found on lies, any contract made with suppliers must be honoured. The practice of capitalism requires a ethical standard of conduct.