THE DELINQUENCIES OF CAPITALISM AS AN ECONOMIC SYSTEM

Source

WHY CAPITALISM IS NOT FAVOURABLE TO MOST DEVELOPING NATIONS AND SOLUTIONS TO IT

Capitalism as a concept and philosophy of Adam Smith in his book of the study into "the causes of the wealth on Nations" has some malignant effect which I will be elucidating that has been an Achilles's hill or a clung in the wheel of most developing countries.

FIRST WHAT IS THE CONCEPT OF
CAPITALISM:
This is the idea that countries should be allowed to operate based on the interaction of the forces of demand and supply with minimal or better still no government presence or interference in the cause of production and distribution of goods and services.

Smith in his causes into the wealth of Nations left for France to study the economy of France at the fade of Feudalism, where after certain speculations came to a conclusion in the year 1776 that Nations should be allowed to operate freely without government interference or better still government operation being at the minimum.

Smith in his book suggested that the feudal system where people work and are being compensated with virtually nothing should be extirpated and replaced with a system where they can work and earn returns as wages and salaries.

As this system was adopted by different nations in the 17th century, it lingered till the great depression of around 1930 where there was a global meltdown of economic activities caused if I may say by the concept of pure capitalism, where there is the absence of government presence.

During this period around 1930, came up another economist called John Maynerd Keynes who argued that Nations are allowed to operate basically not on the idea that government intervention is not needed or needful in the operation and running of the economy even based in the idea of the mercantile system which advocated a closed economy like the Smith market system.
Hence he advocated that Nations should be allowed to trade with nation as to maximize trade and potentials to avert depression and the selfish interest of people and Nations.

Abinitio I wish to pin point the unfavourable conditions that has hindered maligned the developing nations from attaining their desired developmental level or status thus:

THE CONCEPT OF CAPITALISM PROMOTES THE SELFISH INTEREST OF THE ELITES:
This is based in the idea of the rich gets richer while the poor gets poorer,
This is the promotion of the idea of class where the rich who controls virtually all means of production tries to exploit the poor masses through their selfish interest , this is one of the barriers to the development of many developing Nations.

IT FOSTERS AND HARNESSES THE PRACTICE OF MONOPSONY: capitalism as a concept encourages monopsony, which is a situation where there is a single buyer of Labor. Since the capitalist (few wealthy ones) are few, they try to influence the economy in that they have limited number of persons for employment, thereby throwing the economy into under or unemployment. Really unemployment has been a major problem of most developing countries of the world which the practices of the monopsonist has contributed.

IT CREATES INEQUALITY IN THE ECONOMY:
From my observation as an upcoming Economist, the exercebated gap between the rich and the poor is obviously the resultant effect of capitalism which is profusely alarming.

FURTHER I WOULD LIKE TO PROFER SOME SOLUTIONS TO THIS PROBLEM CAUSED BY CAPITALISM:

1.GOVERNMENT PARTICIPATION:
If I may draw our attention to the holds of John Maynard Keynes, he advocated that because of the selfish interest of human beings that there is the need for Government intervention in the economy to curb the endemic practices of people.
And in my view, there is the need for increased Government participation in the means of production to be able to absorb the excess labor in the econnomies of the many developing nations persay, which will drastically reduce unemployment.

2.THE IDEA OF PRACTICAL MIXED ECONOMY SHOULD BE FOSTERED:
Really Karl Max kicked against the idea of capitalism and majored his views on socialism which is still not without some hitches, but in my own view it is better even as many Economist would say that the combination of both practices would be better, so I join to profer the idea of mixed economy. Although basically on the grounds of 70% of socialism and 30% of capitalism according to my view.

Really if the developing nation's should buy into this little idea, I strongly believe that there will be a great and favourable Economic turnaround for those nations which my country isn't in contrast with.

Finally I would like to appreciate us for going through my work and I promise to throw more light on most of the economic systems and practice over the year, from mercantilism till mixed economy in my next write-up, and I believe you will enjoy it. Besides I wish to state that my work is fully plegiarism free as it's subject to probe, am grateful thanks.