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Why capitalism works

Updated on May 3, 2013

It is simple....opportunity for all!

Why does capitalism work so well for the distribution of wealth is a point to this article. Many people in society today believe that capitalism only favors the wealthy, while the rest of the people suffer for this greed. The truth is that capitalism allows for a greater distribution of wealth and opportunity than any other system in the world.

Most of you would disagree with my point that capitalism allows for the greatest distribution of wealth, because the income spread between the wealthy and the poor is so wide. While it is true that there is a wealth "gap" between the rich and the poor, the real question is, how do you fix that? For most, it is a socialist view of redistribution of wealth by providing benefits to the poor via money paid to the recipient by the person who has the excess income to pay for this. This mechanism is conducted through a "government" that adapts this policy, and sets the rules for redistribution.

This sounds like a fair and equatable method of providing the people without income which makes their life better or at least survivable, while the person with the wealth obviously has excess income, so they only have to adjust their lavish lifestyle, and everything is ok. This is where the United States is currently at, we are moving to the more socialistic "advanced" type of society thinking that we have the answers. However, this will only lead to more poverty for everyone, while the wealthy...although they may feel the pinch, still have the money which is power, and they are going to be always wealthy.

If we step back and look at the history of the world, whether you want to go back 1,000 years, 250 years, or 3,000 years, the proof is that capitalism provides more opportunity for the most people. As stated, it is not a perfect system, but the alternatives are even worse. Why can I say that, when it sounds like a utopia of everyone having enough and everyone living by the same wealth standard...everyone has the same amount of wealth. This wealth SHOULD be more than most people enjoy right now, so all of this socialism sounds like we need to enjoy more of the benefits.

My question to you at this point is, what made the United States a superpower country in the world, in less than 200 years of existence? Some would say the exploitation of natural resources, others would claim that we cheated the rest of the world of their resources, and that is how the United States became the strongest nation in the world. When I say the strongest nation, economically this is true as wealth creation is the key ingredient in funding a military force, and for funding defense of the country.

The truth is, that minimal government that allows the individual to pursue their dreams is the best method of creating wealth. Look at every other county in the world that has a prosperous society, and you can link that back to having opportunity for the individual to achieve prosperity. Here is how it works. You go to get your car repaired, and they tell you it is a five day wait until they can get you in. This is ridiculous you say, I need my car tomorrow to get to work or whatever. Your cousin is a mechanic that is very handy, so you have him fix your car and realize that instead of other people having to wait, you can have their car fixed that very same day...and people will pay for that! You just experienced a capitalistic moment in solving a problem.

Capitalism is all about someone using their intuition, talent, and ideas to provide a better service or product to the people who benefit from this. If you charge too high of a price for that vehicle to be repaired, many who can't afford it will wait five days to get the car back, and you may go out of business. At this point, you will lower your price to maintain a steady flow of income and keep your cousin busy. If you cousin is an excellent mechanic, you most likely will be able to charge more because once the car is fixed, everyone is happy!

The alternative to capitalism has never worked in the history of the world, because it does not have incentives built into it. Most people on earth want a better life, they really aren't into going backward I.E. having less in life isn't that appealing. Everyone likes the European model of socialism, because the positive aspects of a job for life, or security is appealing. I would have to agree that I like that part of the equation, but at what cost? Would you rather have security as a grocery sacker all your life, or would you rather have the opportunity to make twice as much doing something you love? I think most of us would rather do something we love, because work is a very consuming part of our lives.

Some believe government can do the job better than a private corporation that exploits workers by paying low wages. The truth is the example of the car needing repair is what this post is all about. Sure, you can have your car repaired at the government provided service center...but what if it takes you a year or two before they can repair your car? The government has expenses for providing the service center, and while we may want to tax the rich, the truth is they won't provide enough money to operate a nationwide service center available to the people. That is Myth #1 for all you socialist.

So what is it going to be? I challenge you to research countries who had a capitalistic system and migrated to a socialist economy. Whether it is Japan in 2013 and you are comparing the wealth creation they had in the 1970's-1980's, or if you want to look at who really has the money in modern day Greece, I invite you to survey this information and come to your own conclusion. Wonder why the continent of Africa is so poor? They have resources, but they are under socialistic government policies whereby NOTHING works! Capitalism works, it has provided the best system for distribution of wealth, and is something that the rest of the world should embrace.


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    • JON EWALL profile image

      JON EWALL 4 years ago from usa


      It appears that just the opposite is being thaught. CIVICS , on how the government works is past history.

      Socialism and the enviroment supercides the constitution?

    • Miks7 profile image

      Mike Dempsey 4 years ago from Sioux Falls SD


      I think the biggest problem today, is that capitalism isn't taught in schools, other than it promotes greedy people that want to get ahead. Unfortunately, the alternative is ten times worse than what capitalism can deliver, and many don't understand this.

    • JON EWALL profile image

      JON EWALL 4 years ago from usa


      You gave an insight of the present picture.Something needs to change.NOT THE US GOVERNMENT WE USED TO KNOW ?

      Barak Obama Campaign Promises