Essay on Does the Capitalist Free Enterprise System Improve Justice in Society

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Pages: 9

Does the capitalist free enterprise system improve justice in society? In what way does it do so? In what ways does it not? Explain and defend your overall conclusion?

“Capitalism can be defined ideally as an economic system in which the major portion of production and distribution is in private hands, operating under what is termed a profit or market system (Shaw, Barry, & Sansbury, 2009, p.127).” Over the many centuries, capitalism has evolved from the emergence of capitalism during fifteenth and sixteenth centuries, mercantile capitalism, financial capitalism with the increased industrialisation and the intensified competition, to today’s globalised capitalism. Although, the names used to describe capitalism have been changed over
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However, it is fair to say that capitalist free enterprise system in today’s environment is no long as powerful as it did in the early nineteenth century. The capitalist free enterprise system has created many inconsistencies. As we can see now, there has been periodic economic crisis happening along with soaring inflation, heightened unemployment and long recession (Shaw, et al., 2009, p.146).

The narrow view of the corporate responsibility determines that some companies pursue the profits at the expense of others, society and environment. As competition intensified, the rule of competition is violated by the behaviours of creation of monopoly power to overcome rivals or collusion of companies to exploit the consumers in order to maximize the profits. The small companies are struggling to survive in a monopolised market while consumers are not able to make the optimal choice regarding quality and price because of the lack of comparison in the market. In order to increase shareholder’s return and reduce cost, it becomes a popular strategy to downsize or outsource operations overseas, which causes the high unemployment and affects the family of the unemployed and local economy. The American economists Paul Samuelson has realised that “comparative advantage cannot be counted on to create net gains greater than net losses from trade (Paul, 2004, as cited in Shaw, et al., 2009, p.145).” Those with jobs have to compete among themselves by either