Why is capitalism good?

In a capitalist economy, all the power is in the hands of the consumers. If businesses do not receive help from the government, then the only way they can continue to exist is if consumers purchase their products and services. People will only want to purchase their products and services, if they see the value of having that product or service as being worth more than the value of the money it costs, and the company will only sell it if it sees the value of the money earned as being worth more than the product or service sold. This means that any exchange in a free-market economy, is a win-win interaction. In every industry, there are many companies that want to make a profit in that industry, but the only way they will make money is if consumers purchase their products instead of their competitors. In order to get consumers to buy their products, they must offer them at as low of a price and as high quality as they can. If someone wants to become extremely successful, they can do so by producing a highly innovative product or service that hasn’t been thought of before.

Under capitalism, individuals freely choose where they want to work, and so that means companies must compete with each other for labor. Every company wants the best laborers working for them, and so they need to offer good wages in order to incentivize workers to work at their company as opposed to a competitor’s. Furthermore, training employees is time consuming, less productive, and expensive, so companies have incentive to treat their employees well, and continue to offer competitive wages in order to retain them. This means that under capitalism, a company can’t just pay its workers near-zero amounts, otherwise the workers would just leave the company and go to a competitor who paid more. Anytime an individual wants to work for a company, the individual voluntarily agrees to work for a wage that both parties agree upon. If the employee does not think the pay is sufficient, then the employee can freely seek employment elsewhere, or seek training to improve his/her skills. This means that in capitalism, workers cannot be exploited since they voluntarily give consent to the agreed wage, and have the option of seeking employment elsewhere if they decided to not agree.

These principles are what make capitalism the best system there is; it encourages innovation, forces companies to create the best products at the lowest prices, and makes every transaction consensual. There is no known system that is more morally right or economically successful.

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