When we hear the word capitalism, we usually think about greedy bankers or CEOs who are
trying to rip everyone else.
They care about nothing but making themselves richer, they got their yacht, private jet
and a palace maybe.
But thats isn’t enough, their greed is bigger than the entire world.
I mean Capitalism is the reason why we have income inequality, so much poverty around
and yet surprisingly, capitalism is the system that governs the entire world, except few
exceptions.
There are a lot of misconceptions going on around this system, but the main question
is, why does it makes some people rich while others extremely poor.
But to answer that question, we have to understand what capitalism is in the first place!
In simple words, Capitalism is an economic system where businesses and industries are
owned and controlled by the people and not the government.
People are free to do what they want and deserve only what they have work for.
That might seem pretty obvious because thats how the world today works, but it hasn’t
always been like, in fact, for much of hisotry, everything in the country was controlled by
the state directly or indirectly.
We had communism, socialism, feudalism, you name it!
But the only one that seem to work so far is Capitalism,
But the biggest problem with Capitalism is that, its problem is its biggest advantage.
In the free market, there are no limits to how big you can grow, it all depends on how
creative are you and how hard you work, because Capitalism promotes competition,
In the free market, people choose which companies succeed and which ones dont, so business constantly
have to improve their products and lower their prices in order to be more competitive.
If there is only 1 shop that sells bread for example, they can set their prices as high
as they want because people have no other option but to buy from them since bread is
a necessity.
But what if there are two shops that sell that exact same bread, if one decides to raise
their prices, people will simply go to the other shop.
So in order to attract as many customers as possible, each shop will try to keep their
prices as low as possible.
Now imagine if there are 10 shops that sell that same exact product, the competition gets
more difficult.
Instead of competing with only 1 business, you have to compete with another 9, so if
you dont constantly improve your product or produce it a cheaper price, you might be out
of business.
Take an example of smartphones, today for just 200 dollars you can buy a much more advanced
and better phone than you could for 500 dollars just 5 years ago, since more and more companies
are emerging.
The problem is that, one of these companies will work way harder than everyone else, and
will be way much more creative than the rest and will essential crush everyone else in
the business and raise to the top and control the market.
And thats where the misconnection starts, because when they get too big, people start
complaining that those who are in charge of this company are super rich while everyone
else is poor, and then blame capitalism for income inequality.
Forgetting that this company was one day a small start up!
Take an example of the worlds mot valuable company.
It had to work for more than 30 years before getting to the position that they are today.
Most people want a comfortable life and aren’t ready to scarify what it takes to build such
a company, because complaining about it is much easier.
Don’t get me wrong, I am not trying to say that people over here are innocent angels.
most companies have been involved in the most nastiest lawsuit you can think about to get
rid of their competitors, because thats how business works, its a war but in a different
form.
But the idea in general is that, free market or capitalism isn’t perfect and a lot of
people might not like it, but in practice, it seems like its the only that works with
us, at least for now.
It simply rewards those who work hard and smart while impoverish those who are lazy.
But pure capitalism isn’t practiced anywhere, its always a combination of socialism and
capitalism, even in the most capitalistic country in the world.
and now its your turn, what do you think?
Is capitalism is the right system or we should move to something else?
let me know in the comments below.
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