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Capitalism Essay, Research Paper

A characteristic of man that separates him from the majority of the

animal world is his organization of social and economic systems.

Man, however, retains traits of his evolutionary ancestors in the

form of self-preservation and greediness. While many political,

economic, and social systems attempt to eliminate this modern

form of natural selection, capitalism and similar economic

structures preserve social inequality in many forms. Historically,

this preservation of financial inequality has achieved a higher

standard of living generally than systems initially formed and

employed to achieve just that. There are specific economic factors

of capitalism that enables it to make life more civilized and

beneficial for its population.

By definition, capitalism is an economic system controlled

chiefly by individuals and private companies instead of by the

government. Through this, it stresses private economic choices.

People are free to decide how they will earn and spend their

income. Companies may choose which goods and services to

produce and how much to charge for them based on the wants, or

demand of the people. This regulates the amount and kind of

products produced to accommodate the population. Because of

this emphasis on economic individual freedom to become the

wealthiest of one?s nation, many inequalities form in the

distribution of wealth. As many citizens are able to acquire their

needs to survive and eventually purchase luxuries, some citizens

are not able to support their own existence and eventually die of

cold, starvation, or other such causes. Although this is viewed by

many as inhumane, capitalist societies achieve a higher standard

of living than other socialist and communist societies. This also

provides incentive for the unemployed to find jobs, as they are not

supported by others in a capitalist society.

Historically, communist societies achieved less

disproportionate financial inequality, but the standard of living

was lower than that of capitalist societies. This is a major reason

that capitalism is better. Also, a free market in a capitalist society

deals with the economic needs of the people better than socialist or

communist government planners. The complexity of human

behavior and the vastness of one society is too great for human

planners to address. A typical example of this can be found in the

former Soviet Union. The planners of this communist nation

issued a plan that factories with the greatest production of cloth

textiles in feet would receive monetary bonuses. In response, the

factories narrowed the size of cloth, producing more feet of

unusable textile. This irrational outcome would not have occurred

in a capitalist government where the usefulness of the product

would be a paramount consideration.

Rather than emphasizing job security of citizens, capitalism

prefers harder and more efficient workers over less efficient

workers. Although one may have had a job for sometime, he/she

may still be replaced by a more efficient worker. This code of

work ethics forms higher levels of competition, boosting work

quality and production. Many privately owned companies exist in

capitalist societies. The population is not vast enough to support

all of these companies. Therefore, the company producing the

most desired product earns the most money while companies

producing the least desired products eventually go out of business

if they do not adapt to the market. This too inspires higher

productivity through competition. Although forfeiting security,

the incorporation of competition in a capitalist society makes

better products for its citizens, increasing the standard of living.

Furthermore, a capitalist society justifies differences of

wages in different jobs. Services in a capitalist society work in a

similar manner as products. If a service is particularly important

to a society?s population, the person performing this service will

earn more money. Hence, the position itself will become more

desirable to more people. This creates similar competition to that

of production, including the same benefits to the society. People

performing this desired service become more skilled at it to

maintain their jobs and customers, servicing their customers in

better ways. Those not as skilled at this profession will seek jobs

they are more talented at, presenting additional services to the


Taking all of these advantages into account, in becomes clear

that a capitalist government is the most efficient organizer of

business. The government sets up trading markets and allows

access to natural resources, after which it allows private

enterprises to trade and manufacture products as they please. In

reality, this produces the best standard of living, hence a capitalist

government is the best organizer of business.

In theory, communism presents the greatest argument of its

superiority. In theory, it is the perfect utopia. However, viewing

the historical standard of living of communist societies, capitalism

is clearly a superior system. The great German philosopher

Immanuel Kant once wrote that a theory that does not work well in

reality is not a good theory. Theories must be based upon

evidence already drawn from reality. Realistically, a pure

communist society is impossible to achieve. Before the

government of a communist society withers away, it must trust

little or one person(s) to control the government. Historically, this

leader or group of leaders have seized sole power, forming a

dictatorship instead of a communist society. The invisible hand

and self-regulation of a capitalist society is both good in theory

and in practice for its high standard of living.

Democratic socialism is also an ideal compromise between

capitalism and communism, abiding by the free market of

capitalism while providing free healthcare and secured jobs for its

citizens. However, the cost to support this society is far too great.

As a result, taxation increases to high amounts, and costs of

products become unaffordable. Present democratic socialist

nations, such as Germany and France, cannot maintain ideal trade

amounts with other countries due to high costs in their own

products. Therefore, capitalism is a superior economic system to

both communism and democratic socialism.


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