Capitalism Socialism and Democracy - Case Study Example

? Capitalism is a force of progress for business and society Capitalism Is a Force of Progress for Business and Society Capitalism can be rightfully defined as the freedom of choice which is applicable on the idea of how one chooses to use the property s/he owns (Schumpter, 2008, p.5). Not only that but it is also encompasses a system that allows people the freedom to choose their personal jobs, the products they buy, the prices they buy them at and the liberty to choose them at the best value. In short, capitalism is rightfully described by Murphy as free enterprise (Murphy, 2007, p.1). Countries like America have ensured that its people make the best out of capitalism, unlike countries that govern their people by using the socialistic system (Murphy, 2007, p.2). There are certain freedoms that capitalism has provided to the people with the help of democratic rights of freedom. They include that as a US citizen one is not bound to one job. If he feels the need to leave it, then he has full rights to do so and no law bounds him from leaving that job (Murphy, 2007, p.3). Along with that, capitalism also provides the opportunity to be self employed by the help of a self-owned business or sell your own goods and services at the price he/she desires. Sometimes, capitalist form of economy and democracy are thought to be considered much adjacent to each other, however in reality it is quite the opposite. The economic growth that the world saw for a quarter of a century may say otherwise after the World War, but after that, the international economy simply deteriorated since then. That quarter of a century of progress made people assume that democracy and capitalism together result in economic growth. But the events later to that growth prove otherwise. The economic meltdown of 2008 itself is a proof for that matter. (Cammack, 1997, p.252) The political rights and school of thoughts determined that in order to make capitalism the primary form of economy, democracy had to be abolished because it gave power to the authority, or in other words power of the weak and poor over the rich. They even warned that capitalist forces may even start a campaign to destroy democratic form of governments to avoid redistribution of the capital. In order to align Democracy and capitalism, it was proposed after the World War that it could only happen if key industries and sectors of the economy were nationalized and a more co-determination by the workers as it happens in Germany. (Cammack, 1997, p.252) Unlike a socialist country, where the state bounds you to a certain set of jobs and where personal rights are not given at ease. However, capitalism has often been accused of their hypocritical by several critics in a number of ways. One such example of that includes the fact that even though people do have the right to choose their own jobs, nevertheless, it is undeniable that they are always at the mercy of the people who employ them (Murphy, 2007, p.3). When it comes to capitalism and the choice of occupation, the major factor that determines what job a person chooses is the salary (Anderson, 2000, p.24). With capitalism and the inequality that it brings into the economic order, it also creates a remarkable ridge between professions and the earnings that people make from them. For instance, in the United States, a teacher or a doctor earns around $40,000 to $50,000 in a year with most of the expenses going in their mortgages and rents ((Anderson, 2000, p.27). However, on the other hand professional sportsmen earn round $2 million to around $20 million in a whole year, as the interest of several bookies and economic tycoons rely on them, even though they haven’t even graduated from college. The most expenses they have are their agents. Capitalism therefore has induced such in equals in our society where sportsmen are paid much heavily as compared to teachers and doctors. Capitalism is quite difficult to understand at times. This is because on one hand, it gives the people a free market to work in. People with businesses have the complete freedom to sell their products at any price they want in order to gain maximum profit, using the best demand and supply strategies (Murphy, 2007, p.49) (McConnell, 1987, p. G-17). The only role played by the government in such a scenario is to be a mere symbolic figure of authority, with little or no power of dictation. This ensures healthy competition in the market and thus, helps in maximizing the outputs as well as simultaneously, minimizing the inputs (McConnell, 1987, p.630). So yes, on a quick look, capitalism does surely lead to prosperity and advancement in the business sector. However, a detailed insight in the matter shows that the capitalism also brings with itself a system that is drenched with greed, corruption, materialism, ruthless competition and exploitations to its very core (Murphy, 2007, p. 49). With a poor check and balance system by the government, many firms exploit the ideology of capitalism to make illegal profits out of their businesses and indulge in practices like money laundering and tax eviction. The capitalism has a major role in maintaining industrial ecology and thus proving beneficial to the natural environment. In simpler words, it helps industries work in a way that promotes wholesale production, sale and consumption using ways that are both economically effective as well as environment friendly (Richards & Pearson, 1998, p.42). The reasons for such a strategy basically involves four different factors with the first being the well – being of the corporate. Profits are always more likely to increase when the companies are smart enough to recognize the costs that are wasted through production inefficiencies, waste of inputs and power losses (Kiely, 2008, p.185). Use of environment friendly strategies such as collaboration with companies who are responsible for cleaning the manufacturing plants also helps in reduction of unnecessary costs through energy losses, thus benefiting both the business as well as the environment. The best examples of these include the use of hybrid vehicles by freight companies and solar power energy by industries. Also, the consumer demand has a major hand in promoting the system of industrial ecology. In the 21st century, it is very important for the customers that they buy environment friendly products and this factor has a very important role to play in maintaining the image and reputation of the product in the market. So, whether they personally want to or not, but most businesses will resort to using environment friendly strategies to make their product green and thus likeable in the market. An example of this can be seen in many hotels which offer a change in sheets and towels on alternate days rather than on a daily basis in order to cut their costs on the cleaning services. However, again, a wide variety of repercussions are associated with the above discussed relationships with the most obvious being the increase in output waste due to the excessive production on a massive scale. Maximum profits lead to maximum quantities being manufactured in the attempt to even further reduce the cost per unit. Standardization of goods will also be achieved in order to maintain quality assurance. In short, the businesses will most likely to operate their production units through the rule of volumetric which is based upon the principles that say that with the increase in quantity, there is more likely to be an increase in the total selling cost thus ensuring maximum profits (Ehrlich, 2007). An example of this involves restaurants where food is served in larger quantities than it is possible to eat since all the management staff cares about is the maximum profit gain achieved from each sale (Miller, 2007). Companies fail to recognize that this strategy has a direct effect of the natural capital since the increase desire to consume more results in an increased depletion of the natural resources, usually even at a rate faster than they can be replaced. This in turn leads to what is called an unsustainable yield and it is exactly what is happening in the case of petroleum and other such fossil fuels (Miller, 2007). It can be therefore said that Capitalism seems like a perfect solution for economy, but only to the perspective of the various multi-million dollar business owners. Along with prosperity for corporate world, it brings corruption and greed along with no decency for the Earth’s natural resources into the equation. Not to mention the powerlessness of the government in the entire economic order leaves it open to zero accountability due to the freedom provided by democracy. Therefore, capitalism is only the best case of economic order under a largely nationalized form of economy that has strict checkup and power in the hands of the government to maintain a check and balance over various social evils that corrupt the society such as corruption. Works Cited CAMMACK, P. A. (1997). Capitalism and democracy in the Third World: the doctrine for political development. London, Leicester University Press. DEANNA RICHARDS AND GREG PEARSON. (1998). The Ecology of Industry: Sectors and Linkages. National Academies Press. http://www.myilibrary.com?id=21027. EHRLICH, I. (2007). The mystery of human capital as engine of growth, or why the U.S. became the economic superpower in the 20th century. Cambridge, Mass, National Bureau of Economic Research. http://papers.nber.org/papers/w12868. KIELY, R. (2008). Empire in the age of globalization: US hegemony and neoliberal disorder. India, Orient Longman. MCCONNELL, C. R. (1987). Economics: principles, problems, and policies. New York, McGraw-Hill. MILLER. (2007). Living in the Environment. Academic Internet Publishers Incorporated. MURPHY, R. P. (2007). The politically incorrect guide to capitalism. Washington, DC, Regnery Pub. SCHUMPETER, J. A. (2008). Capitalism, socialism and democracy. New York [u.a.], Harper Perennial Modern Thought. Read More