I tend to believe strongly in free market capitalism and Laissez-Faire economics. Why is that? In this article I will attempt to explain why the market is generally a superior alternative to government or other such forms of force.
The Entertainment Market
This is a point which even some Bernie supporters can get behind: capitalism is the best way to produce goods for entertainment. Consider toys. When shopping for toys you are not limited to a few choices, but to more than most would care to count. The reason for this is the competition between different toy producers, all attempting to maximize their profits.
The best way to maximize profits is to produce high quality goods at a low cost in order to sell them cheaply. The best way to produce goods cheaply is to use cheap materials, this encourages the producers of such materials to do so at a lower cost than competitors.
The best way to maximize profits is to produce high quality goods at a low cost in order to sell them cheaply.
A socialist may dispute this claim, saying this encourages shoddy workmanship on the parts of both the toy producer and the material producer. This ignores the principle known as supply and demand which posits that if a market for something exists, the need/want to obtain capital will incentivize someone to meet that market’s demand.
Now suppose that a company is able to make the best version of a toy. If this were to happen, there would still be more toy options due to the existing markets for multiple different types of toys. The forces outlined above combine to provide many cheap, varied options for your entertainment needs.
Food and Water
The above forces may work well for unnecessary items such as toys, but how can we entrust them to provide people with necessities such as food and water? Well, in a system that rewards productivity, clearly someone will produce and sell these things for their mutual benefit.
It may be true that food is different in the sense that is is required for every human to survive, but it is incorrect to state that it would be handled differently than any other commodity in the open market. The fundamental argument against these things being handled with capitalism is their very importance.
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The capitalist element of competition which would encourage better taste, packaging, lower price, environmental friendliness and the like in addition to a safe and enjoyable product, no matter its importance.
So what’s the problem?
The points made above are usually enough to refute any anti-capitalist arguments. I will in the next section attempt to explain why some of the larger charges levied against the system of capitalism are impractical, or even good.
There is one major problem with the charge of monopoly as a flaw of capitalism and a reason for regulation. Ignoring government monopolies, I will deconstruct this accusation.
What about monopolies?
Monopolies are used to abuse the workers or consumers. This point seems sound because if there is only one option, they can do whatever they want right? The answer is, disappointingly to some, no. The definition of a monopoly is a company which holds 100 percent of the market share in its competing field. In order to become a monopoly, a company must satisfy the needs of 100 percent of the market for a good or service.
How is it possible that a company large enough to have a monopoly would also have enough employees to run it if they treated workers poorly? How is it possible that a company this large could maintain its consumers with a diminishing product quality or increasing price? If any of these things were to happen, room for a competitor would be made by those unwilling or unable to buy this good or service from that particular company. So we see the market in action.
A monopoly, where it comes to exist by its own merit, is an inherently good thing.
I would further argue that a monopoly, where it comes to exist by its own merit, is an inherently good thing. This is because the good or service this monopoly provides must be so good, and the company providing it does so so well that the needs of every person who makes up the demand for the good or service is sufficiently satisfied. If a company were somehow able to achieve this, I see no reason to oppose it.
Isn’t greed a problem?
Another charge constantly brought up against capitalism is the concept of greed. It is said that capitalism is, by its nature, greedy and promotes greed. The argument is as follows: capital is necessary for survival, and in order to gain more of it, people will harm others.
This accusation is dependent on the assumption that the economy is a zero sum game, and in order for someone to make money, someone else has to lose money. This is false because as we see in Gross Domestic Product (GDP), the economy is capable of growth, and is actually almost always growing. Everyone can become wealthier, and increase their total quality of life.
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You could also make that argument with the assumption that capitalists would do whatever they can to hurt their workers or decrease their product quality in order to cut on costs. This is not true because workers sell their labor on the market just as goods and services are sold. If there is demand for workers, in order for that need to be fulfilled, a company must provide conditions and pay which workers generally consider good enough for their needs.
Workers sell their labor on the market just as goods and services are sold.
The argument that the quality of goods and services would be diminished shows a fundamental lack of understanding of the supply and demand points made earlier. There is little demand for poor goods and services, and those goods and services would fail to satisfy the needs of the market and lose in competition to a superior provider.
I would hope this article can serve as a basis for people who have not yet explored these issues to understand capitalism better or to persuade non-capitalists of the superiority of this great system of advancement, peace and liberty.