ADVANTAGES OF CAPITALISM
Capitalism is a system comprising economic and social factors in which the main factors of production – capital and land are in individual hands. Goods and services are traded in open market and any profits that result from such trade is subject to taxation. This system has several advantages including:
Ø Capitalism encourages competition. Since goods and services are freely traded in the open market with each seller setting his/her price, competition is bound to occur and this results in monopoly and cartels being removed.
Ø Capitalism encourages trade. As business is conducted in open markets, traders endeavour to avail a variety of goods and services thereby increasing trade opportunities.
Ø Employment. Capitalism provides employment opportunities for a people in form of labour.
Ø Development of skills. Capitalism results in a variety of goods and services in the market place. This affords a people to specialize in an area that they feel they can perform better.
Ø Investment. Capitalism provides room for investment opportunities as those with the capital seek ways to put their capital in use to make profits.
Ø Organization. Capitalism encourages self-organization. As competition levels rise, traders are bound to organize themselves and set a reasonable pricing method that benefits them all.
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