#CAPITALISM II MERGER FREE#Ī free economy not only leads to prosperity, but it also supports flourishing democracies and human rights, as seen most brightly in Western Europe. On the other hand, if not done well, capitalism leads to deeply unequal societies and political capture by the economically powerful who use the State to advance their benefits excluding and suppressing the rest of the population. The rest of this article explores two related themes: first, what are good capitalism and bad capitalism? Second, what are the conditions under which capitalism can be good or bad? Good Capitalism: The Benefits of Mixed Economies At its worst, capitalism has led to colonialism, the slave trade, dictatorships, fascism, and wars of unparalleled violence and destruction. It is useful to get some definitions clear. What is capitalism? First, the capitalist system is where private individuals, their privately or jointly owned companies and corporations own capital and produce most of the goods and services in the economy.

Capital includes both physical – land, buildings, machinery, technology – and financial capital, i.e., financial assets that can command physical capital. Second, it is an economic system run mainly by markets where buyers and sellers meet voluntarily to exchange products, goods, and services. Buyers and sellers, mostly, freely carry out these activities without interference by the State. There is no such thing as pure capitalism.

Instead, what we have are mixed economies, where governments take an active role. In Europe and North America’s advanced economies, governments can tax as much as 35 to 45 percent of what the economy produces every year and spend even more through its borrowing from the private sector.

They run more than a third of all economic activities, including providing vital public goods and services such as law and order, education, health, infrastructure, defense, etc. Second, critically, only governments have the authority to issue fiat money. Third, governments have the power to regulate private sector activity and use it extensively.

Capitalism ii merger