Written by Shreya Panda, a grade 11 student
Known for originating the phrase “greed is good”, the Frenchman Jacques Coeur- a mega tycoon- overreached and ended up in prison, forfeiting his vast wealth. This is an early example of what could happen if capitalism gained too much power. It challenged political structures and became unaccountable.
What is this capitalism exactly and why do people support or oppose it?
What is Capitalism?
Capitalistic ownership means that owners control the factors of production, and derive their income from their ownership. Traders sell their goods at the highest possible price but competition keeps prices at an efficient level.
In capitalism, companies live by the motivation of profit ,and their existence is based on them making money. The goal of a corporation is maximizing shareholder wealth.
According to Karl Marx, the principle of a market is “product-money-product”, where money is just a tool. In a capitalistic society, the principle is the opposite— “money-product-money”.
How did capitalism originate?
The origin of capitalism is incoherent and complicated. In the 16th century, the British systems of power collapsed due to the Black Death, a deadly plague that killed 60% of Europe’s population. A newly formed class of merchants began trade with foreign countries and this demand hurt the local economies. This demand began to dictate the overall production and pricing of goods, and also led to the spread of imperialism, colonialism ,and slavery.
England flourished as an industrial country by the 18th century. The Industrial Revolution saw an explosion of manufacturing overtake the country. It is within those factories and textile mills that the modern idea of capitalism – and the opposition towards it- began to fully flourish.
In 1776, economist Adam Smith- often called “father of capitalism”- published his treatise An Inquiry into the Nature and Causes of the Wealth of Nations which acts as the bedrock upon which capitalism stands.
Capitalism is best defined in contrast with socialism, as socialism has arisen, both, as a critical challenge to capitalism and as a proposal for overcoming and replacing it. Socialism is an economic system where the means of production, such as money and other forms of capital, are owned by the public. Everyone works for the good of society as a whole. The government decides how wealth is distributed to the public.
The United States, the U.K., and Germany are examples of modern capitalist countries. In contrast, China, India, and Cuba are examples of modern socialistic countries, as was the former Soviet Union.
Why do people support capitalism?
For someone who owns a company, capitalism may make sense: the more profit the company makes, the more resources you have to share with your workers and this theoretically improves everyone’s standard of living.
The idea is simple: economic freedom will lead to political freedom. Capitalists view it as the only sensible way to organize and coexist in a society, insisting that alternatives like communism, socialism or anarchism are doomed to fail.
Another important point raised would be the scope of innovation that capitalism enables. This means more efficient means of production and, thus, economic growth.
When capitalists are questioned about the environmental damage that their concept causes, they argue by saying that these resources are made more valuable through capitalism. They dismiss the question of economic inequalities by posing the stance that the rich people are rich because they are more productive.
Why do people oppose capitalism?
Karl Marx once put it tartly, “The last capitalist we hang would be the one who sold us the rope”.
Capitalism is known for its tendency to generate instability, often associated with the existence of financial crises, job insecurity, and failures to include the disadvantaged.
The essential anti-capitalist argument is that “the hallmark of capitalism is poverty in the midst of plenty.” Widespread poverty — especially amongst children, who bear no responsibility for their plight — is morally reprehensible in rich societies where it could be easily eliminated.
Karl Marx, perhaps the most famous opponent of capitalism in history, emphasized the system’s capacity to dehumanize workers. Anti-capitalists worry that capitalism’s thirst for profit over everything else means that those who sell their labour will be worked to death.
Moreover, capitalism ignores the external costs, such as pollution and climate change. This makes goods cheaper and more accessible momentarily, but in the long run, it depletes natural resources, lowers the quality of life in the affected areas, and increases costs for everyone.
Anti-capitalism isn’t simply a moral stance against injustice- it’s about building an alternative, and this alternative is yet to be found.