Whether Capitalism give a good impact ?

Capitalism is an economic system where private entities own the factors of production. 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. The government has little or no control over the market. And the Capitalism prioritizes individual rights, private ownership and free enterprise. And also this system is running in developed countries in the world.

Run this economic system bring many advantage and disadvantage. The disadvantage are, first this system is focused on profit. One of the biggest criticisms against capitalism is that it is much too focused on profit. As such, it may lead to social and economic inequality. While some may consider the chance to produce superior products, there is a cycle of boom and bust in markets. In otherwords, a capitalist system allows monopolies and other forms of cheating. And the next, it is emphasizes consumption. For a capitalist system to succeed, consumers need to buy goods or avail of services constantly. This is something that those who are against capitalism don’t agree with. While the freedom to produce desirable goods allows the market to self-regulate (meaning, government interference and mismanagement is less likely to happen), it doesn’t always guarantee that the basic needs of a person will be met. And also, it limits the government in enforcing fair play rules. In An Inquiry into the Nature and Causes of the Wealth of Nations, economist Adam Smith wrote about ways people are motivated to act in their own self-interest. This is a tendency that serves as the basis for capitalism where an invisible hand in the market serves as the balance between competing tendencies. The government limits itself when it comes to enforcing and enacting rules of fair play because the market distributes factors of production.

But the advantage are, this system is the dominant economic system in developed country. The countries are such as the United States of America, United Kingdom, Canada, Australia, Japan, Switzerland, Singapore and Spain – that’s just to name a few. And the other advantage is Some tenets of capitalism are cornerstones of representative government. Capitalism rose when the system of feudal economies ended. It has since grown to be a dominant economic system, particularly in developed countries around the world. There are specific tenets of capitalism like property rights which supporters believed to be cornerstones of representative government. In addition, wage labor – another tenet of capitalism – can be counted in this regard. And also, In a capitalist system, the production and price of goods are determined by the market rather than the government. With private property rights, private individuals are given the freedom to create the goods and services to sell in the market.

 The emergence of capitalism in Indonesia is inseperable form the history of exploitation of Capitalism imperialist. The colonialism done by the Dutch state which was a capitalist model country in the 17th century. Since the Dutch colonialism against Indonesia, the fate of Indonesia has been connected with world capitalism. Until the beginning of Indonesian independence, the political and economic system was still irregular.

Entering the New Order era, The New Order chose economic improvement and development as the main objective and pursued its policy through the existing structure but remained with the advice of Western-trained economists. The policies issued during the New Order period were basically very good, but in the process Deviation. One of the deviations that occurred was the development of industries to improve communities that made rich people rich and poor people getting poorer. At this time Indonesia opened a great opportunity for foreign investors to enter Indonesia to invest their capital. The government also cooperates with foreign institutions that deal with foreign debt issues. These institutions include the International

Monetary Fund (IMF), the World Bank, Asian Development Bank and others. The proliferation of banking which at that time was rampant coupled with debt transactions abroad further exacerbated capitalist practices. After the Soeharto era or the end of the new order, the period of capitalism has not ended in the Indonesian state and still continue and begin to penetrate into the vital areas of a country such as education, where education is becoming increasingly expensive and not affordable by the small community, due to the education that is used as a commercialization for profit. In addition, state assets owned by Indonesia are lost one by one due to being sold to foreign parties. And that’s why capitalism system can’t be accepted by Indonesian people.  

Even so, I agree with the implementation of this system. In my opinion, capitalism bring many  positive results for human civilization, living facilities, technological developments, product variations, infrastructure that capitalism shows a significant role in the history of human civilization. Capitalism encourages economic activity significantly, it is more encouraging people to achieve a maximum result, be more efficient in utilizing resources and distribution of goods, creativity of society becomes high because of the freedom to do everything. Freedom is a factor that makes capitalism system that still exist. And increase people to get more advantage or profit with more effort.

By: Graciel Rivkah XIIA4/20