by Cody Hodge

Created on: November 03, 2010

What are the disadvantages of capitalism? Capitalism says that businesses are entitled to make a profit and that profits are something that are supposed to be good for the business and the economy at large. While this is true, the pursuit of profit under the capitalist system has in some cases caused damage to the economy. What are some of the problems with capitalism?

One of the biggest problems with capitalism is that not everyone benefits. While there are always going to be winners and losers in the system, the winners tend to win big and the losers end up working for the winners. This means the losers have no say in the system, and the winners end up being CEO’s who get to play by different rules than the workers.

This means that a CEO can make millions of dollars by running a company into the ground while the worker gets laid off and has no income. It means a CEO can make a million dollar bonus for shipping the factory and its jobs to China while the worker gets nothing. Why? It is all because by shipping the jobs to China where it is cheaper to do business, the company gets a higher profit margin. The CEO then gets rewarded for making the shareholders happy.

Capitalism is strictly about what makes more money for a company. Even if a company decided that it would hire workers, it might not pay them well. While a 9 dollar an hour job might be possible because a company was able to profit, does it help a worker live? Even before taxes, you won’t even make 1200 a month working full time at that wage. That is barely a livable wage in most cases, and don’t even think about starting a family on that kind of an income.

Sure, you could learn a skill, or come up with your own idea, but what if you don’t have any great skills? Do you not deserve a wage that at least ensures that you are able to live with some dignity provided that you are working while able? Capitalism is too much based on what a market will bear without thinking about how it effects the people who need the jobs to provide a decent income.

Capitalism is certainly a great system of doing things, but it is flawed as an economic model as well. There are pros and cons to any system that humans create, so it would only be fair to point out the flaws in the capitalistic economic model.

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