Assignment Of Business Environment
GJIMT (Mohali)Chandigarh
Q-What are the drawbacks of Unregulated Capitalism?
Ans. Capitalism-Capitalism is a competitive system,with competition between suppliers,between consumers and between suppliers and consumers.This means that there are economic winners and losers,as there are winners and losers in any form of competition.
Unregulated Capitalism
Unregulated capitalism is destroying democracy and the economy is an eye-opening look at the need for democratic countries to replace unfettered capitalism with social capitalism.
Here supplies means our creditors and customers are the debtors.
Drawbacks Of Unregulated Capitalism
1.Monopoly Power-Private ownership of capital enables firms to gain monopoly power in product and labour markets.Firms with monopoly power can exploit their position to charge higher prices.
2.Monopsony Power-Firms with monopsony power can pay lower wages to workers.In capitalist societies there is often great inequality between the owners of capital and those who work for firms.
3.Social Benefit Ignored-A free market ignore externalities.A profit maximising capitalist firm is likely to ignore negative externalities,such as pollution from production;this can harm living standards.Similarly a free market economy will under-provide goods with positive externalities,such as health,Public transport and education.
4.Inherited Wealth And Wealth Equality-A capitalist society is based on the legal right to private property and the ability to pass an wealth to future generations.Capitalist argue that a capitalist society is fair because you gain the rewards of your hard work.But often people are rich simply,because they inherit wealth or are born into a privileged class.Therefore,capitalist society not only fails to create equality of outcome but also fails to provide equality of opportunity.
5-Diminishing Marginal Utility Of Wealth-A capitalist society argues it is good if people can earn more leading to income and wealth inequality.However,this ignores the diminishing marginal utility of wealth.A millionaire who gets an extra million sees little increase in economic welfare,but that $1million spent on health care would provide a much bigger increase in social welfare.
Submitted By Submitted To
Akshay Pal Mr.Gurdeepak Singh
M.B.A-1st year
GJIMT (Mohali)Chandigarh
Q-What are the drawbacks of Unregulated Capitalism?
Ans. Capitalism-Capitalism is a competitive system,with competition between suppliers,between consumers and between suppliers and consumers.This means that there are economic winners and losers,as there are winners and losers in any form of competition.
Unregulated Capitalism
Unregulated capitalism is destroying democracy and the economy is an eye-opening look at the need for democratic countries to replace unfettered capitalism with social capitalism.
Here supplies means our creditors and customers are the debtors.
Drawbacks Of Unregulated Capitalism
1.Monopoly Power-Private ownership of capital enables firms to gain monopoly power in product and labour markets.Firms with monopoly power can exploit their position to charge higher prices.
2.Monopsony Power-Firms with monopsony power can pay lower wages to workers.In capitalist societies there is often great inequality between the owners of capital and those who work for firms.
3.Social Benefit Ignored-A free market ignore externalities.A profit maximising capitalist firm is likely to ignore negative externalities,such as pollution from production;this can harm living standards.Similarly a free market economy will under-provide goods with positive externalities,such as health,Public transport and education.
4.Inherited Wealth And Wealth Equality-A capitalist society is based on the legal right to private property and the ability to pass an wealth to future generations.Capitalist argue that a capitalist society is fair because you gain the rewards of your hard work.But often people are rich simply,because they inherit wealth or are born into a privileged class.Therefore,capitalist society not only fails to create equality of outcome but also fails to provide equality of opportunity.
5-Diminishing Marginal Utility Of Wealth-A capitalist society argues it is good if people can earn more leading to income and wealth inequality.However,this ignores the diminishing marginal utility of wealth.A millionaire who gets an extra million sees little increase in economic welfare,but that $1million spent on health care would provide a much bigger increase in social welfare.
Submitted By Submitted To
Akshay Pal Mr.Gurdeepak Singh
M.B.A-1st year
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