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
Excellent Attempt!
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