Liberal Capitalism - Assignment Example

According to Kovel (pp. 45) the shift in business governs, the trend shifted from the usual state capitalism to liberal capitalism. State capitalism refers to when the market and business environments are dominated by the government. It is also characterised by government business emerging in the market and influencing the market structure. In another scenario, state capitalism is whereby the private owned businesses are having their operations fully controlled by the government (Feenberg, pp.98). Some of the operations controlled by the government include credit allocation and investment ventures.

Generally state capitalism can be described as a system where the state influences the economic environment to serve its own interest. On the other hand liberal capitalism refers to the market freedom of citizens. This is where individuals in the market environment are given the freedom to make their own decisions, make their own mistakes and chose their own investors. According to Steele (pp, 134) liberalism tends to oppose any government interference in the corporate environment. It advocates for economic liberty to choices and decisions.

However, in some scenarios governments give funds to private business people but it does not give them the liberty to control the business persons. In this paper I will focus on proving that liberal capitalism is better than state capitalism. It will also focus on the advantages liberal capitalism has over state capitalism. Liberal capitalism is usually referred to a system which enables creation of wealth. In this case, wealth refers to private property with sole decisions making regarding the wealth.

Prior to the establishment of liberal capitalism, many people in the economic environment used to make wealth, but in this case the government was the beneficiary. The government enjoyed and exploited the effort invested in the economic front. All individuals with companies were heavily taxed and had decisions made by the government. The government chose their investors and who to transact business with. This hindered most people from being successful (Kovel, pp.76). Their wealth was a crumb of the cake the government was getting.

However, this tendency has taken a major shift. In the modern business environment, entrepreneurs are given the liberty to make wealth and to control their wealth in the corporate environment. The only government interference is based on the taxation basis. This has enabled private owned companies to rise to the limits of the state owned companies. For example, Electronics giant Hauwei has evidence of the growth in private owned companies. Private owned companies have been able to reach the standards of state owned organisation, a trend that has been promoted by liberal capitalism (Feenberg, pp.19). Liberal capitalism stops the government interference and manipulation in the business ventures.

For instance, in Bulgaria a business person had to acquire seventeen business permits so that he could start a business. Bulgarian prime minister was shocked by the events and ordered simplified mode of acquiring business permits (Kovel, pp.213). After the simplified business permit procedure was implemented, many investors and entrepreneurs ventured into the Bulgarian market. This not only promotes local entrepreneurship but also gives back to the growth of economy. In modern day business environm