Capitalism refers to an economic system in which wealth is owned by a few individuals or corporations that influence its production and distribution. Proponents of capitalism claim that it is a necessity in the attainment of political and economic freedom. However, several criticisms lodged against capitalism have labeled it unethical. These criticisms have elicited mixed reactions from opponents and proponents of capitalism.
Two of the most serious ethical objections to capitalism are its contribution to inequality and poverty, and its contribution to the creation of oligopolies that channel power to a few individuals or corporations. These objections are theoretical and operational limitations that are associated with capitalism. Capitalism does not fulfill the promises it stipulates in its principles of fair competition and equal opportunity.
According to the capitalism system, few individuals own the largest portion of wealth, thus leaving the majority in poverty. There is a wide income gap between the rich and the poor. The poor constitute the larger portion of the population. Capitalism contributes to poverty by creating inequality in the availability of opportunities because it divides the population into two socio-economic classes.
People in the lower socio-economic class have limited access to opportunities that could emancipate them from poverty. Capitalism advocates for fairness. However, the social stratification that results from the practical implications of the system makes it unethical. First, proponents of capitalism claim that the system is fair and presents equal opportunities to everyone.
However, government’s interference is to blame for the inequality and poverty. The proponents claim that the market has its own mechanisms that eliminate poverty and unemployment were it not for the government’s interference. Secondly, they claim that since the standards of living are improving by the day, the capitalist system has benefits that override its disadvantages.
These arguments are not convincing because it is apparent that government interventions have played a key role in eliminating poverty in the past. In addition, these interventions are responsible for raising the living standards.
Capitalism contributes to creation of oligopolies that channel power to a few individuals and corporations. In addition, corporate welfare contributes to the eradication of competition, a vital factor in a capitalistic economic system. This is unhealthy because it contradicts the popular belief that competition is beneficial. Capitalism leads to the formation of oligopolies that eradicate economic competition.
In addition, competition cannot be fair and beneficial because of the existent economic differences. Certain groups dominate markets because of their economic superiority. Competition leads to inefficient utilization of resources and customer exploitation by dominant organizations or businesses. Proponents of capitalism claim that competition is fair because businesses are governed by the same policies.
The formation of oligopolies implies that dominant businesses have better strategies than their competitors do. Proponents also claim that competition leads to better products and services, although the argument is not convincing.
Few individuals, who own the means of production, use their power to manipulate market forces and evade certain government policies like payment of taxes. In addition, cooperation leads to better resources utilization, innovation and improved productivity.
Capitalism attracts criticism because of its contributions to poverty and inequality as well as formation of oligopolies. Capitalism divides the population into two socio-economic classes. People in the lower socio-economic class have limited access to opportunities and labour is their greatest asset.
People in the upper socio-economic class own the means of production. They control the process of production and have great influence on market forces. Capitalism encourages the establishment of oligopolies that eradicate competition and give power to a few individuals or organizations.