Negative Impacts of Capitalism: A Socialist Perspective

Running head: POLITICAL SCIENCE
POLITICAL SCIENCE
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POLITICAL SCIENCE1
Introduction
Capitalism can be illustrated as such kind of economic system where the means of
production is under private ownership. In a typical capitalistic economy, all the decision
making power including important decisions relating to investments, lies in the hands of the
owners of capital or wealth. In other words, the employers who has wealth, property and
financial capability has all the decision making power including fixation of the wage
structure of the workers and other laborers1. However, level of competition in the market
fixed the prices of the goods and services as well as regulate its distribution.
Description
Socialists are of the view that accumulation of capital or simply capitalism creates
waste which is generated as a result of certain externalities and such a situation requires
corrective measures. The socialists also state that this particular capitalistic economy
develops wasteful industries only, that is, it develops such practices that creates demand for
the goods they make to generate more and more profit only ignoring the economic demand
satisfaction. According to the socialists, the main motive of these industries was to generate
extra profit only. For example, they tried to enhance the demand for their goods through
attractive advertisements, ignoring economic demand concept and the effects on society as a
whole.
Apart from the above stated negative impacts of capitalism, the socialists argued on
the fact that capitalistic economy generated some irrational activities as well2. Socialists
identified that capitalism indulged in some irrational activities like speculation where they
1 Awan, Abdul Ghafoor. "Wave of Anti-Globalization and Capitalism and its impact on
World Economy." Global Journal of Management and Social Sciences 2.4 (2016): 1-21.