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Drawbacks Of Unregulated Capitalism


Drawbacks of Unregulated Capitalism

Introduction-

Capitalism- Capitalism is an economic system dominated by free markets and private ownership of wealth, assets and business.

Turbo capitalism\Unregulated capitalism
This refers to an unregulated form of capitalism with financial deregulation, privatization and lower tax on high earners.

Discussion-

Turbo-capitalism\Unregulated capitalism involves:
  • The absence of regulation for banking /finance system. This encourages banks to take risks and pursue profit through complex financial derivatives rather than basic principles of attracting deposits and lending.
  • Less regulation on abuse of monopoly power.
  • Lower income tax and lower capital gains tax giving greater rewards to high income earners.
  • An unregulated labour market, where it is easy to hire and fire workers, and very limited regulation about working conditions.
Conclusion-

·     If high earners will pay lower taxes then government can’t collect taxes and can’t use money for development. So, rich becomes richer and poorer become poorer. This is defined as unbalanced economy.

·     In monopoly market if there are less regulation and more abuse then the drawback is for the customer and the competitors because they can’t complain. Most of the monopoly markets will get benefited from this.

·     In labour market if it is easy to hire and fire workers than there are no security of jobs and earnings, this will make economy unbalanced.

·     If there are less control on banking\finance than lots of misleading\cheating can happen in banking system and economy have to face problem of shortage of money.

                                    Submitted By-ABHISHEK RAWAT
                                                                   MBA-1







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