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What are the pros and cons of capitalism?
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Capitalism promotes innovation in a free market economy

A free market encourages innovation because people have incentives to work harder, which leads to higher productivity. Innovation allows societies to develop rapidly and gives people a better quality of life.

The Argument

Capitalism promotes and rewards innovation from people and companies. Innovation is encouraged for both goods and services at all levels. Companies invest in research and development in an effort to create better products so that they can sell more and increase their profits. This leads to huge advances, especially in fields like medicine and technology. The system also rewards companies for constantly making improvements to already existing products and technologies.[1] Capitalism creates an incentive for companies to constantly strive to keep improving because that is how they can earn the most money. These continual improvements benefit consumes because it leads to more choices of goods. Due to the competitive nature of capitalism, citizens also have an incentive to work harder. People know that with creativity and hard work (the backbone of innovation) they can become the next Bill Gates or Jeff Bezos. This results in a culture of productivity that increases overall efficiency, allowing for civilizations to develop rapidly as new technological advancements are being made.

Counter arguments

One result of capitalism has been the formation of monopolies. The incentives for innovation (such as competition) do not occur under monopolies. This results in large corporations becoming lax in their development and suppressing or buying new products in an effort to protect their dominant position. This is bad for a free market and bad for innovation.



[P1] Under capitalism, people have incentives to work harder, leading to higher productivity and increased innovation.

Rejecting the premises

[Rejecting P1] Incentives for innovation do not occur under monopolies (which occur in capitalism).


This page was last edited on Monday, 2 Nov 2020 at 23:21 UTC

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