Capitalism: Pros, Cons, and Evolution

Capitalism
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Capitalism
Characteristics of Capitalism
Capitalism is characterized by private ownership of the property and means of production, primarily motivated by the desire to make profits. Ownership from a capitalist perspective refers to the possession of the right to use, sell, or transfer of assets as well as the right to become the sole beneficiary of the income from the assets (Bowles, 2014). Another key attribute of capitalism is its ability to evolve based on the economic environment at hand (Kaletsky, 2011). As a social and economic system, capitalism has its pros and cons, as described by the different authors.
Pros
* Capitalism is a major driver for economic growth that is fueled by the pursuit of profit. The pursuit of profit also accelerates innovativeness as firms strive to better their services and gain competitiveness in the market.
* Capitalism supports the concept of free-market.
* Capitalist social and economic systems keep on changing every time (Bowles, 2014). This implies that capitalist systems can adapt to changing economic environments.
Cons
* Capitalism creates an unjust and unstable social and economic system (Bowles, 2014). The economic recessions and depressions witnessed in the past have been a result of the capitalist system, according to critics.
* The profit-driven nature of the capitalist system, coupled with its unstable nature, implies that the system is prone to crises.
* The exploitation of nature in pursuit of profits in a capitalist system indicates that capitalism is destructive to nature.
Evolution of Capitalism
Capitalism can reinvent itself and adapt to new environments triggered by crises and thus can be viewed as an evolutionary system rather than a static one. Mercantilism was a form of capitalism spearheaded by the state through exports and imports before the industrial revolution in the 1870s. The 1870s, a period best described by the industrial revolution and the American gilded age, marked a new era of capitalism that has since evolved to modern-day global capitalism, that is, industrial capitalism. Finance capitalism succeded industrial capitalism when the financial institution, in tandem with the political institution, started shaping the economy. The coalition of the financial institution with the imperialists eventually led to the emergence of imperial capitalism. National capitalism, or rather state capitalism, tasks the state with the undertakings of a nation's business and commerce, as opposed to the financial institutions. Modern-day global capitalism is a political and economic philosophy that is concerned with the economic endurance of the world as a whole.
Entrepreneurship and Economic growth
Factors Contributing to Economic Growth
The most apparent contributing factor to economic growth is the ease with which a business can be formed (Baumol et al., 2007). The presence of several bureaucratic conditions suffocates the establishment of business and, by extension, economic growth. Secondly, there should be a reward system for successful entrepreneurs to encourage them to take up the risks often presented to the entrepr...