Capitalism as a Force of Progress for Business and Society - Case Study Example

? Capitalism Introduction Capitalism can be defined as an economic system in which a country’s trade and industry get controlled by private owners for profit rather than the state. Capitalism as an economic system gets characterized by a lack of government intervention, private firms owning the means of production as well as goods and services getting distributed according to the price mechanism. Capitalism has been adopted by most of the states in the world due to its competitive nature that accelerates economic growth. Equally, capitalism gets best suited in a democratic country and such, most of the democratic countries in the world use this economic system. Progress, on the other hand, can be defined as a gradual shift from one state to another. This paper seeks to discuss capitalism as a force of progress for business and society. Capitalism as a Force of Progress for Business and Society In a capitalistic nation, a business and a society can be seen to relate in that both involve a group of people held by some common beliefs and objectives. The main principle applied in capitalism as an economic system is the principle of open competition. Capitalism treats all parties in an economy equally. As such, completion gets encouraged in the production of goods and delivery of services (Chang 2011, p.133). With capitalism, more choices get given for goods needed in an economy. This gives customers a large pool of products from which to choose their preferred taste. Capitalism makes it possible for these goods to come at the preferred prices of the customers. The same product may be produced at different levels of quality so as to be affordable to all classes of people in an economy. Competition has a wide range of benefits to the business sector. One such benefit is that it ensures a continuous production of standard goods as businesses try to compete with each other. In a competitive environment, businesses get to acquire the most competitive human labor available in the market. In order to impress businesses, individuals get required that they keep their skills up to date. Competition in a capitalistic society also entails competing for the available scarce resources (Hurrell 2007, p.348). This competition keeps businesses on their toes in terms of management and production. It is, therefore, necessary for the progress of such a society. In a capitalistic economy, the influence of the government on production gets highly minimized. This allows for all owners of the factors of production to compete fairly in the economy. Lack of government interference further ensures that potential investors get attracted to invest in such an economy. This is because they feel that they will have sole control of their production processes. When companies have less burdensome regulations from the government, they tend to perform better than when there is a lot of regulation from the government (Wade 2009, p.568). Capitalism in most cases works for the social good of the society. Although it may seem at the first instance that in capitalism everyone is greedy for money, an inner look of the matter may reveal otherwise. Every economic activity carried out in a capitalistic economy provides some benefits to another person different from the one producing it. Goods and services offered get produced by owners of the factors of production who later use the same income to pay for the factors of production such as labor and raw materials. These incomes, therefore, get rechanneled back to the economy. Capitalism brings equality in the society. No matter where a person may start in life, everyone has the opportunity to achieve what they wish. The basic principle used is that the harder one works the higher the reward one gets. Capitalism treats all individuals in a society equally providing them with equal opportunities to succeed. In a capitalistic society, all individuals get subjected to the same rules that govern the production activities in such a country. Capitalism further provides freedom to a society. Everyone is at liberty to participate in any activity as long as the activity does not pose a threat to others (Mcnally 2011, p.143). This promotes social development in a society as people are able to express their desires in the economy without little limitations. Capitalism further allows an economy to grow exponentially. The more money a firm makes through sales of its products, the more money available for investing into the economy. A lack of a resource on the economy leads to innovation people will always look for a way to provide for something that lacks in the community. However, the rare the resource is on earth, the high its monetary value. A clear example of this is oil whose monetary value gets higher as its scarcity increases. In order to address such a situation, it calls for other resources that can compete with oil to be discovered (Kay 2004, p.190). Such resources include nuclear power. When these resources start competing with the once scarce resource, the monetary value of the scarce product goes back to its initial. This keeps the economy growing. In a capitalistic society, every challenge that requires addressing leads to the growth of the economy. Capitalism can be used to promote economic freedom. This economic freedom further creates political freedom. In a case where the government owns all the factors of production and sets the prices for goods in the market, such influence is likely to spread onto other areas of life. In order to address such a situation, capitalism provides political freedom that ensures that everyone is at liberty to venture into any business in the economy as long as they can afford to accumulate the factors of production (Harvey 2005, p.217). There is little interference from the government in doing so. Firms in a capitalistic society face incentives which help them to create goods that are in demand. These incentives in most cases get geared towards helping such firm cut their costs of production while at the same time avoiding waste. When efficiency of firms in an economy gets improved, this consequently accelerates the rate of economic growth. Firms get able to provide more employment opportunities to people in such an economy. The quality of goods and services offered in the market further increases due to competition of firms to remain relevant in the market. In a situation where firms do not compete, their service delivery becomes poor. This is because no matter the standards of these services, customers have limited options to choose from in the market (Gamble 2009, p.124). Capital creates wealth in a society by continuously advancing to higher levels of production and technological sophistication. In order to retain their market in the economy, business people will always improve on the quality of their products. This ensures that their products are distinguishable from the rest of such products in the market. This creates new dimensions upon which production takes place. Equally, in order to provide these goods at a relatively lower cost and ensure that the time taken to produce these goods gets reduced, owners of the factors of production apply technology (Fulcher 2004, p.60). Technology narrows the time taken to produce these goods. Invention of sophisticated technologies gets experienced in the economy as firms try to outdo each other in terms of production rate and quality. Human skills get also enhanced by this competitive nature of capitalism. The system rewards the adaptable while punishing those who fail to cope with it. Those who fail to cope with it are left with limited options other than coping with the system for them to be rewarded. When such people do so, this leads to further improvement of the economy as the number of dependants get reduced (Dicken 2010, p.459). Although capitalism seems to distribute wealth to the efficient group in society on the short term, it equally does so in an evenly way in the long term. This is because people get to learn how to put together the factors of production and involve themselves in the production process. A capitalistic society is more likely to experience robust growth compared to a society that adopts other forms of economic systems. Investors are more likely to be attracted to such a society because of the nature of the economy. It is worth noting that investors prefer an economy where they have most of the control of their production activities and the government rarely involves itself in these activities. When investors get to invest in a society, the benefits that come with such an investment cannot be underestimated. There is provision of goods and services in the society as well as employment opportunities provided such companies that invest in the society. Capitalism further rewards the owners of factors of production with the profit they make. This reward is important as it encourages more people to engage in production activities. When more people engage in production processes, there is more overall production of goods and services in the economy (Crouch 2011, p.247). These owners can also use some of the profit to reinvest in the economy hence creating more wealth for the economy. Conclusion Capitalism has been hailed as the best economic system that has ever been tried. This is because of its ability to accelerate the economic development of countries in which it has been used. Its compatibility with a democratic society makes it more preferable than most of the other economic systems considering that most of the countries in the modern world are democratic. Capitalism plays a vital role in promoting progress in business and society. This progress gets mainly centered on the use of competition as a tool to accelerate progress. This is mostly important in the business sector. References List Chang, H.-J. (2011). 23 things they don't tell you about capitalism, New York, Bloomsbury Press. Pp.132-134 Crouch, C. (2011). The strange non-death of neoliberalism. Cambridge, UK, Polity Press. Pp.245-248 Dicken, P. (2010). Global Shift, London, Sage Press. Pp.456-460 Fulcher, J. (2004), Capitalism: A Very Short Introduction, Oxford, Oxford University Press. Pp.57-61 Gamble, A. (2009). The spectre at the feast capitalist crisis and the politics of recession, Basingstoke, Palgrave Macmillan. Pp.121-125 Harvey, D. (2005). A brief history of neoliberalism, New York, Oxford University Press. Pp.212-218 Hurrell, A. (2007). On global order: power, values, and the constitution of international society, Oxford [u.a.], Oxford University Press. Pp.345-349 Kay, J. A. (2004). The truth about markets: why some nations are rich but most remain poor, London [u.a.], Penguin Books. Pp.187-193 Mcnally, D. (2011). Global slump the economics and politics of crisis and resistance, Oakland, CA, PM Press. Pp.139-145 Wade, R. H. (2009). Is Globalization Reducing Poverty and Inequality? The Development Reader, London, Routledge. Pp.567-569. Read More