Skip to main content

Unregulated Capitalism


Introduction
There are many different types of economic systems that regulate how people operate and profit from business, including capitalism, communism, and socialism. This lesson focuses on capitalism. Capitalism is an economic system in which the means of production of goods or services are privately owned and operated for a profit. In capitalism, individuals are given the freedom to operate their business as they want and manage their own income.
Unregulated form of capitalism is also known as Turbo capitalism.

Turbo-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.

Discussion

Within the capitalists state the consumer has all the power in the economy because some people will always be able to work harder, achieve more and eventually achieve dominance above others in the economy. Along with a lack of Government welfare and human nature several disadvantages would eventuality occur within the economy.
As dominance within the economy is formed by the elite few, wealth is recycled in this small percentage who has gained a monopoly through limited Government control. This normally occurs through construction of rules that limit the flexibility of the money flow between classes. Leading to exploitation in labor resulting in revolt and strike within the market negatively affecting the entire economy by halting and disrupting production.
Due to market being profit and demand driven, negative externalities such as pollution are generally ignored until they become a serious issue within the economy. This leads to a necessity to reduce the money supply in the economy to resolve these issues.
Firms that have been able to gain monopolies early within market development, pushes out smaller firms from entering due to the high level of competition where they may not be able to produce.

Conclusion

Ø  Advantages
·         As a consumer, you can get the best quality goods and services at the best prices.
·         As a consumer or a producer, you have the greatest possible freedom to do what you want.
·         Rewards hard work, ingenuity and talent.
Ø  Disadvantages
·         Inequality and injustice.
·         Rewards corruption and influence peddling Wealthy can dictate policy with donations.


Submitted To                                                                    Submitted by
Prof. Gurdeepak Singh                                                     Akhil

Comments

Post a Comment

Popular posts from this blog

Customer benefited from increased competition by liberalization and globalisation

Introduction: Liberalization- Liberalization is any process whereby a state lifts restriction on some private individual activities. Liberalization occurs when something which used to be banned is no longer banned, or when government  regulations  are relaxed.  Economic liberalization  is the reduction of state involvement in the economy. Globalization- G lobalization   is the word used to describe the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information. Discussion: There is strong evidence in many services, not least telecoms, that liberalization leads to lower prices, better quality and wider choice for consumers. Such benefits, in turn, work their way through the economic system and help to improve supply conditions for many other products. Thus, even if some prices rise during liberalization, fo...
1 comment
Read more

How have customer benefited by increased competition after liberalization and globalization?

Definition:- The Liberalization and Globalization. India under its New Economic Policy approached International Banks for development of the country. These agencies asked Indian government to open its restrictions on trade done by the private sector and between India and other countries. LIBERALIZATION The basic aim of liberalization was to put an end to those restrictions which became hindrances in the development and growth of the nation. The loosening of government control in a country and when private sector companies’ start working without or with fewer restrictions and government allow private players to expand for the growth of the country depicts liberalization in a country. OBJECTIVES OF LIBERALIZATION POLICY To increase competition amongst industries. To encourage foreign trade with other countries with regulated imports and exports. Enhancement of foreign capital and technology. To expand global market frontiers of the country. To diminish the debt bu...
1 comment
Read more

how firms can cope up with changing technological environment

How can the firms cope up with changing technological environment? Introduction:- Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, technological arrangements and application of new technology etc. A firm may have to dramatically change their operating strategy as a result of changing technological environment. Concept:- So for the purpose of coping up with the drastically changing technological environment the firms can follow the following 8 steps:- 1.  Identify current loopholes: no technology should be implemented before identifying the needs. First find out what is not working in the organization and if it is obsolete technology then change is required to be implemented. 2.  Select the right technologies: select the technology which is relevant to your business, has worked for your competitors and is easy for your employees to catch on. 3.  Inv...
1 comment
Read more