Capitalismis an economic system based on private property and private enterprise. In this system, most of the economic activities are carried out by private individuals or organizations for profit. The means of production, raw materials, capital and other necessary means are largely private.
It is a system in which individuals have maximum economic use and private institutions are competitively supported using economic arguments in their favor. (one)
What is the purpose of capitalism? Why has it gained priority today?
Capitalism individuals act independentlyIt is a system in which the state supports competitive social activities and is the most important argument for economy and development. In addition, this system is a mechanism where the private sector and institutions are encouraged to produce continuously with state support and the welfare of the society is ensured.
The individual sustains the development of society with the help of private organizations, and competition and production are aimed. The most important argument of capitalismproduction is based on competition. The state manages education, health, transportation, clothing, housing and food through the private sector. The public implements proactive management in these areas and involves the private sector. Individuals position themselves in competition and participate in management. (2)
word capitalismfirst French politician and historian Louis Blanc It was used by. With the discovery of gunpowder in the early 16th century, feudal structures collapsed. monarchy and capitalism shifted. The enrichment of the people increased the influence of individuals in the government. Economy and commerce, which provided people with wealth and power, guided society as a spirit towards capitalism. Regulators began to use capitalism, and it has been widely used all over the world since the 19th century. This turned capitalism into a system.
Karl Marx He says the following about this subject: ‘The modern biography of capitalism begins with the world trade and markets of the 16th century.’
After the revolution in England, this system was fully coded to the world. Today, almost every state administration in the world has this system. This mechanism comes from capital (capital means capital, capital). This system will continue as long as economy and competition are the backbone of humanity. (3)
- The most important means of production in the world are developed by private enterprise, and states provide serious support to them (for example, Tesla, Apple, Samsung, Daimler Benz, Toyota, etc.).
- In this system, all tools and machines used for production purposes in the public area can be used for profit.
- Since the main purpose of the system is to make profits, competitive production is the basis of capitalism.
- After production, it contributes economically to the society as well as the individual due to profit.
- Capitalist’s propertyis the system in which a person controls the factors of production and earns income from his property. This flexibility gives people the ability to run their businesses efficiently. It also encourages them to maximize their profits.
- In companies, shareholders are the owners. On the other hand, their degree of control in the company depends on the number of shares they own. Shareholders elect the company’s board of directors and hire managers to run the company. In this way capitalism managementit works everywhere.
- Suppliers compete for the highest profit. They keep costs as low as possible while selling their products at the lowest price possible. Competition in capitalismkeeps prices reasonable and production efficient. (4)
Advantages of capitalism
- In capitalism, producers and companies produce the best products at the best prices. Because consumers pay more for the products they want most.
- Companies sell the products their customers want at the highest prices they can afford, but prices are kept low due to competition between companies. They make their products as efficient as possible to maximize their profits.
- The most important element of economic growth in capitalismInnovation is innovation that paves the way for new products and more efficient forms of production. (5)
Disadvantages of capitalism
- Capitalism does not support those who lack competitive skills, including the elderly, children, disabled people and caregivers. Therefore, this system requires government policies that value the family to make society work.
- Despite the idea of ensuring fair competition, this mechanism does not promote equality of opportunity. Therefore, those who are not well-fed, do not have financial means and education cannot compete equally. Society can never benefit from the valuable skills of these people.
- Industry executives cheat because they face fewer competitive threats and use their power to make market entry more difficult. For example, they donate to elected officials who support legislation that benefits their industry.
- This system completely ignores environmental factors as well as many different external costs such as changes in climate. This makes the products more economical and accessible in a short time. However, it also consumes natural resources over time. Quality of life decreases in affected areas and overall costs increase for everyone. (6)
As a result, capitalism is not fully implemented by states. Today, states; It opens avenues for the economic benefit of society and the competitiveness of individuals. homeland of capitalism Even in the United States, which is considered to be a competitive environment, the administration frequently uses the economic tools of the state in order to prevent the competitive environment from deteriorating further. Individual freedoms may be restricted to prevent monopolies and distort competition.