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Capitalism Versus Communism Essay

1277 words - 6 pages

Some may argue that capitalism is a cruel economic system that has been known for the corruption, exploitation of poor people and where greed overcomes anything good. However, the majority will agree that capitalist system is best system in the world of economics. It drives people to do better, as the certain amount of effort will bring the same level of result. There are examples in the history where individual’s wealth was affected by the corporate greed, but with the government regulations history will not repeat itself the same way. Capitalism is all about choices and these choices are made based on the amount of economic benefit we receive at the end of the trade.
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To ensure business ethical conduct if free markets, government has to regulate businesses. Even though the inventions and business growth are most important factors for the economy, federal and state regulations are needed to ensure public and environmental protection. With the free market system every individual is free to invent, trade, and offer his services and capital to others for his own profit; however, it is believed that in some occasions person’s greed may overcome the honesty. Without certain rules there is nothing that would stop individual executing dishonest transactions or harm an environment for his personal benefits. According to Adam Smith one of duties of the government, “ includes a judicial system, the rule of law-a system of justice that would, in effect, enforce contracts and other legitimate business transaction, as well as mediate disputes ,and, perhaps most important, define property rights” (Smith p.222). Another government duty in the free market world according to Smith is to provide security. In present days there are many corporations that are sitting on huge piles of liquidity; however they restrict themselves to use the liquidity because of economic uncertainty. In the free markets government cannot stay away and not being involved with regulations and restrictions but at the same time it can’t allow itself to take complete control over the markets as it will move from capitalist to a communist market system.
The communist system is dramatically opposite to the capitalist. The communist system restricts individual’s liberty, the right to own property and completely restricts private business. Everything is owned by the government and the government is operating for its own benefit, not necessarily for the benefit of its people. In free markets government intervenes to ensure equal distribution of resources, regulate pricing or imply tariffs on foreign products. Capitalist’s government basically protecting environment, nation’s industries and profitability of the private sector by intervening. However, sometimes the outcome may differ dramatically from the government expectations and government finds itself more involved regulating more than it needs too, or one industry receives more benefits than another. Certain business groups appeal to government for preferential treatment and increased profitability, or calling for government for certain action that will benefit these business groups. The government role in free markets should be limited, with main responsibility to protect the people. The legislative part of the government should represent people’s concerns and needs versus making decisions for the people and plan people’s future. The government and its representatives should not be allowed to impose their goals, dreams and vision over society as it is against our individual liberty (Ebeling p.607).
In the free market system all the businesses operate to attract the...

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