Should we accept capitalism?

Fransiska / XII MIA4 - 18

In this blog, I will tell you about should we accept capitalism or not. Every people might have different answer, so here is my opinion. But before I declare my opnion, we should know about what is capitalism.

Capitalism is an economic system where private entities own the factor productions. The four factors are entrepreneurship, capital goods, natural resources and labor. The owners of capital goods, natural resources, and entrepreneurship exercise control through companies. The individual owns his or her labor. The only exception is slavery, where someone else owns a person's labor. Although illegal throughout the entire world, slavery is still widely practiced.

Capitalistic ownership means two things. First, the owners control the factors of production. Second, they derive their income from their ownership. That gives them the ability to operate their companies efficiently. It also provides them with the incentive to maximize profit. This incentive is why many capitalists say " Greed is good "

In corporations, the shareholders are the owners. Their level of control depends on how many shares they own. The shareholders elect a board of directors. They hire chief executives to manage the company.

Capitalism requires a free market economy to succeed. It distributes goods and services according to the laws of supply and demand. The law of demand says that when demand increases for a particular product, price rises. When competitors realize they can make a higher profit, they increase production. The greater supply reduces prices to a level where only the best competitors remain.

The advantages of capitalism :

Capitalism results in the best products for the best prices. That's because consumers will pay more for what they want the most. Businesses provide what customers want at the highest prices they’ll pay. Prices are kept low by competition among businesses. They make their products as efficient as possible to maximize profit.

Most important for economic growth is capitalism's intrinsic reward for innovation. This includes innovation in more efficient production methods. It also means innovation of new products. As Steve Jobs said, "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new."

The disadventages of capitalism :

Capitalism doesn't provide for those who lack competitive skills. This includes the elderly, children, the developmentally disabled, and caretakers. To keep society functioning, capitalism requires government policies that value the family unit.

In the short term, inequality may seem to be in the best interest of capitalism's winners. They have fewer competitive threats. They may also use their power to "rig the system" by creating barriers to entry. For example, they will donate to elected officials who sponsor laws that benefit their industry. They could send their children to private schools while supporting lower taxes for public schools.

In the long term, inequality will limit diversity and the innovation it creates. For example, a diverse business team is more able to identify market niches. It can understand the needs of society's minorities, and target products to meet those needs. 

Proponents of socialism say their system evolves from capitalism. It improves upon it by providing a direct route between citizens and the goods and services they want. The people as a whole own the factors of production instead of individual business owners.

Many socialistic governments own oil, gas, and other energy-related companies. It’s strategic for a government to control these profitable industries. The government collects the profit instead of corporate taxes on a private oil company. It distributes these profits in government spending programs. These state-owned companies still compete with private ones in the global economy.

So in my opinion, capitalism is not recommended for developing countries because the education in developing countries is still low. If the economic system is controlled by the private sector, poor people will not able to get a better life in their financial and the rich people who have an authority in economy will be arbitrary. Unlike in developed countries, they have high level education. So they will use their authority to change their country to become more advanced.

So what legacy that I can give to the next generation in Indonesia? I will invite people to make many kinds of new technology that worthwhile for my country. If my country have a lot of useful technology, that can make my country more developed. I also want to change the major Indonesian people mindset about do everything for the personal advantage become do everything for everyone advantage.