Pros and Cons of US Capitalism Essay Example | Topics and Well Written Essays - 750 words

Pros and Cons of US Capitalism - Essay Example A capitalist economy or society with some degree of regulation of inequality, environment and the monopoly of power creates different outcomes as opposed to a purely capitalist one. The American capitalist system has significant government intervention in various fields such as healthcare, education and transport.1 There are various pros to the American type of capitalism. They include the following: The U.S capitalism system stimulates and encourages economic development. In a capitalist based system, the firms and individuals have incentives to be innovative and work hard in creating a climate promoting innovation and economic expansion.2 Thus, this is helpful in increasing the real gross domestic product (GDP) growth. It also leads to improvement in the living standards because there is a creation of wealth. Thus, enabling higher living standards. In theory, everyone is a beneficiary of the increasing wealth. It creates a trickle-down outcome from the rich to the poor. The American capitalism market has created increased competition. Competition is a natural outcome of capitalism. It is advantageous and beneficial because increased competition produces high quality products and a decreasing price of the product. Capitalism rewards firms and organizations that produce high quality products at the lowest market prices. It results in an increasing market share for the product producer. It forces firms to be more efficient in their means of product production. The efficiency pressurizes the firms to reduce product costs and avoid wastages. State-owned firms often tend to be wasteful and inefficient. For example, they are unwilling to get rid of surplus workers or methods of production that are wasteful. Furthermore, the state-owned corporations have fewer incentives to initiate innovative working practices. Another advantage of the American capitalist society is that the private sector has the means to ownership of