Business Ethics: Capitalism

5279 WordsJul 11, 201122 Pages
Part I: Capitalism 1.1 Introduction According to an online article entitled “ Reflections on capitalism” : The word “capitalism” was popularised by Karl Marx in the middle of the 19th century .It is a social , political as well as an economic system that countries use to guide their development programs and economic policies. Almost all the worlds countries are currently running their economies on capitalist inspired doctrines ,this fact testifies to a great extent of the many advantages and viability of the system of capitalism . 1.2 Advantages of Capitalism 1.2.1 Cheaper and better products A capitalist economy operates in a “free market”, this is a requirement vital if capitalism is to thrive. A free market is characterized by…show more content…
Therefore, firms gain monopoly over power in a free market allows and exploit customers by charging higher prices. They often pay lower wages to workers. 1.3.3 Immobility Besides, immobility is one of the main problems of capitalism is that a free market is supposed to be able to easily move factors of from an unprofitable sector to a new profitable industry. However, this is much more difficult practically. Because of the inequality of wealth in a truly capitalist society with no government welfare great poverty is bound to occur. Leading to homelessness, slums, and disease this will further lead to forced migration. Forced migration will also increase these problems in large cities and towns. The people who cannot make any money in the countryside will move to the towns and cities with the belief of finding work and making money. 1.3.4 Irrational Behavior Followed by, economics sympathetic how individuals, families, businesses, and governments make choices under conditions of scarcity. We believe people select products to maximize their happiness and that businesses try to maximize their profits. There's no right or wrong choice here whatever gives you more pleasure is the better choice for you. Of course, a choice we think will make us happy or give us big profits might end up doing nothing of the sort. People tend to get caught up in hypothetical
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