Government and Pure Capitalism - Essay Example

The paper "Government and Pure Capitalism" is an outstanding example of an essay on business. The U.S does not practice pure capitalism. This is because while capitalism rejects any form of government intervention in economic affairs, the U.S government is involved in economic affairs in several ways. These include the fact that America has established laws that govern the economy such as fair labor laws, anti-discriminatory laws in hiring, and social security. In addition, the government has also established laws that even govern the minimum amount of wage that a person should receive. This clearly indicates that the U.S does not practice or even encourage pure capitalism. The U.S should not operate under pure capitalism. This is because there are more disadvantages tied to it than there are advantages. Some of the advantages include encouraging innovation, efficiency, and economic growth while the disadvantages include monopoly power that affects the consumer adversely, monopsony power that affects the employees, wealth inequality, social division, and ignoring social benefits. 

Governments should control business activities. This is because if the opposite happens the consumer and the employees will suffer. This takes place because the businesses acquire monopolism. This gives them the power to choose the price for the products instead of having demand to determine the price. On the other hand, they set employee wages as low as possible so as to maximize profit-making because there is no form of control by the government. Some of the advantages of governmental intervention in business include controlling commodity prices and wages offered to employees so as to eliminate exploitation. However, the disadvantages include that the government may discourage innovation and impose high taxes, which may affect the profitmaking capabilities for businesses. Read More