Capitalism is an economic system where private individuals own the land, labour, capital and entrepreneurship. These individuals produce all the goods and services in the economy and owns their labor. They have the freedom to do their own technique of production without being interfered by the government. The government has no hold to these groups except of the rules of having a business, after all enterprises could affect innocent people who will buy the products which happened to be under the protection of the government.
Moreover, these private individuals gain their income from their ownership which sometimes led these capitalists to be greedy to make more revenues. Greed that will affect your business unintentionally, creating competitions to increase more salaries. Greed that doesn’t improve but will only look ways of making more money than actually making the business boom. It will lead you to the thought of maybe having more clients or buyers will make you have more money because there is a saying that the more the merrier.
Capitalism also has advantages and disadvantages. The advantages of capitalism includes the people’s freedom to choose a product they desire which leads the other businesses to compete for a better product and services; economic incentives are produced from the goods and services based on the demand to cut costs and avoid waste; the economic growth determined by the increase of the gross national product to improve better living standards; and the prices are determined by the supply and the demand theory. The law of supply and demand tells us that if the demand is little, the supply will be less and the price would rise; and if the demand is high, the supply will also rise and the price would go down. The law of supply states that the producers raise the price of a certain product to increase their revenue while the law of demand states that if the price is high, surely, less consumers will likely demand the product. The disadvantages of capitalism are: one is that it could gain monopoly power which gives a specific person or enterprise of supplying a particular product with a higher price. Capitalism could also gain inequality to the distribution of wealth and other people struggle to gain employment and resources.
With capitalism, people get to buy things as much as they want and the business will provide people’s in demand products which cost the capitalism to grow potentially. The more money the business makes, the more it can provide into the production which costs the business to earn more profit. This works perfectly for both capitalists and the people who buys the product. The business has also the freedom to change the products they make and sell based on the changes of the consumer’s preferences and for the new consumer trends. Overall, capitalism is a free market trade that meets people’s expectations and demands through the use of labour, capital, entrepreneurship, and natural resources to produce goods and services to the economy.