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Capitalism is one of those topics that have elements of economics, politics, philosophy, sociology, psychology, and religion. "Most" people have a general idea of what capitalism means, but an exact definition can have a number of elements that do not have agreement. In general, capitalism is an economic social system that puts the process of commerce in the hands of the people. In other words, the process of production, buying, and selling are "free" and negotiated by individuals and entities as impacted by market forces. In layman's terms, it is the ability of an individual to make money for him or herself without being restricted (that much) by some authority or governmental entity. Of course, capitalism is a theory or system that has some benefits and some shortcomings. Here are a few thoughts on the pros and cons of capitalism.

PROS

Probably the best thing about the capitalism is that people have the freedom to "succeed", and in many situations they do. In addition, it allows individuals to have some control of their own "destiny" when it comes to commerce. Also, it does not prevent a person from succeeding who was previously in a lower socioeconomic "class". Rather, hard work, innovation, and circumstance can propel a person or organization into a environment of prosperity.

CONS

Of course, the "pros" are nice to read about, but they also represent some aspects of the ideal. Many people can and do succeed. However, just as many can, and do, fail. This is either due to misjudgments or because they are a victim of others. The downside of capitalism is that it can also lead to greed, deceit, and unethical behavior. Capitalism can lead to a separate of ethical constructs, where people teach their fellow human very badly in the name of corporate advancement. People use phrases like, "We have a responsibility to our shareholders" or "It is not personal, it is just business." These can be veiled ways of conveyed that they will make profit through whatever means necessary, even if means stepping on other people along the way.

Overall, capitalism is not a perfect system. What works for some definitively does not work for others. The key factor, as with many other systems, is the interpretation and implementation by people. On paper a system can work very well. In the hands of a real person, it can be easily skewed or destroyed.

Learn more about this author, Todd Pheifer.
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