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Q: Negative side of Capitalism ( Answered 3 out of 5 stars,   3 Comments )
Subject: Negative side of Capitalism
Category: Business and Money > Economics
Asked by: dwdrummer-ga
List Price: $5.00
Posted: 01 Dec 2002 20:16 PST
Expires: 31 Dec 2002 20:16 PST
Question ID: 117528
I need to know about capitalism, and more importantly the negative
side of capitalism.  I need factual information but don't rule out
your opinion. It will help me in my Business Administration Class.
Subject: Re: Negative side of Capitalism
Answered By: easterangel-ga on 02 Dec 2002 00:08 PST
Rated:3 out of 5 stars
Hi! Thanks for the question.

The Internet provides tons of resources about the problems associated
with capitalism. For our own purposes we shall limit ourselves to
those with strong historical and factual basis and argument.

Our first link should put us in the proper perspective by defining
capitalism first.

“An economic system in which the means of production and distribution
are privately or corporately owned and development is proportionate to
the accumulation and reinvestment of profits gained in a free market.”

“Capitalism” from 

In order to enrich our background as regards to capitalism, this
resource from the Washington State University provides us a history
and inherent nature of capitalism.

“The European Enlightenment: Capitalism” 

The book, “The Global Problems and the Culture of Capitalism”, gives
us a good view of the current problems attributed to capitalism with
factual basis. The excellent resource, “The Online Global Problems
Reader”, which serves as a supplement to the book, discusses the
following criticisms of capitalism.

1. “One of the essential features of the culture of capitalism is
masking from the consumer the effects of his or her consumption

“The Consumer, the Laborer, The Capitalist, and the Nation-State”

2. The exploitation of labor

“Readings on the Laborer”

3. The great disparity in wealth among nations contribute to social

“There is little doubt that globalization, the integration of the
world capitalist economy, has been good to investors. The question is
how good has it been to everyone else? Worldwide, some one billion
people live in poverty; the environment is being destroyed; in spite
of modern medical discoveries, infectious disease remains a greater
problem today than it did twenty years ago; social unrest and protest
continues to plague nation-states.”

“Readings on the Capitalist”

4. Too much importance or responsibility is put upon the shoulders of
nation state

“The nation–state must regulate conflicts between competing
capitalists at home and abroad, by diplomacy if possible, by war if
necessary. The state plays an essential role in creating conditions
that inhibit or promote consumption, controls legislation that may
force people off the land to seek wage labor, legislates to regulate
or deregulate corporations, controls the money supply, initiates
economic, political, and social policies to attract capital, and
controls the legitimate use of force.”

“Readings on the Nation-State”

5. The inability to solve and to provide for world population which
has been growing at a faster pace every year.

“Readings on Population”

6. Hunger, Poverty and Economic Development

“We often hear about the world running out of enough food to feed our
growing population. For various reasons, however, that is not likely.
The overwhelming evidence is that people are not hungry because of a
lack of food; they are hungry because they don't have the money to pay
for it.”

“Readings on Poverty, Hunger, and Economic Development”

7. The ever-increasing pattern of consumption is destroying the

“But the need for ever increasing consumption in the culture of
capitalism is arguably the single greatest cause of environmental
degradation. It is the need and desire for more "stuff" that
stimulates the development of technologies that degrade the
environment, and, while population is often cited as a cause of
environmental problems, it is clearly the slowest growing countries
that cause the greatest problems.”

“Readings on the Environment”

8. Unequal distribution of resources and the side effects of a
deteriorating environment affect global health.
“Readings on Disease”

9. Inequality and exploitation on society as a whole

“Readings on Indigenous Peoples, Ethnic Conflict and the Nation-State”

“Readings on Peasant Protest”

If you want to access the other articles especially on social
inequality and protests you could go to the main site to view the
arrangement of the discussion.

“The Online Global Problems Reader”

I really feel that whatever system we have there will always be
criticisms and ensuing problems. Capitalism is such an enigma since it
shows us its success and practicality but at the same time, we always
end up counting the cost. It is true that some of the mentioned
problems above could be directed at capitalism but I feel that such
topics as population is a little bit of a stretch at this point.
My real concern about capitalism is the unequal distribution of
resources around the world. Let us not talk about anymore about
“wealth” but just basic and life giving resources, which enables our
brothers to live a decent and comfortable life. Since the dawn of
history, this has been a problem and seems to be aided by capitalism
in these days so its pace is accelerated. At least, communism and
socialism tried to solve it. Capitalism seems to put a blind eye to
the issue and with seeming arrogance it postulates that by just
accepting its economic dynamics, world poverty and hunger will just

Another greater concern could be the erosion of ethical and moral
values of future generations.  Money and economic prosperity will be
the driving force for living and accomplishment in such a materially
oriented world. It will be a greater problem since this time our
hunger will be for our own humanity.

Search terms used: 
Capitalism criticisms problems

I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.

Thanks for visiting us. 

dwdrummer-ga rated this answer:3 out of 5 stars

Subject: Re: Negative side of Capitalism
From: hedgie-ga on 01 Dec 2002 22:16 PST
The best contemporary critique is by Soros:

The Capitalist Threat - 97.02
... by George Soros N The Philosophy of History, Hegel discerned a
disturbing ... I now fear
that the untrammeled intensification of laissez-faire capitalism and
the ...
Subject: Re: Negative side of Capitalism
From: knowledge_seeker-ga on 02 Dec 2002 08:26 PST
Another excellent (well-argued but rough to read) discussion is
Benjamin Barber's book, "Jihad vs McWorld" --


"The consumer society and the open society are not quite synonymous.
Capitalism and democracy have a relationship, but it is something less
than a marriage."


Subject: Re: Negative side of Capitalism
From: snapanswer-ga on 02 Dec 2002 15:51 PST
Capitalism relies heavily upon markets to allocate resources.  This is
capitalism's strength, since markets can move resources more
efficiently than bureaucrat-managers in a command and control style

A book that illustrates this in simple terms is "The Invisible Heart:
An Economic Romance" by Russell D. Roberts.  It explains fundamental
economics as a conversation between two people.  For example, how does
a baker know how much bread to make without a government Bread Chief
to tell him what to do?

However, markets rely heavily upon accurate information to function
properly.  When information is manipulated it can lead to severe
market errors, such as the dot-com bubble and inevitable correction.

In addition, even when markets operate "properly" they can only
account for efficient allocation of resources that can be valued with
currency.  This means that other social values such as "fairness" or
"equality" are not necessarily values that are accomodated by the
market.  In addition, labor that is not assigned a value in the
market, such as housework and raising children, can often be
underappreciated in a system that only assigns value based upon

Finally, since business has an interest in decreasing costs and
increasing revenues they often seek to shift their costs to market
externalities.  Said another way, a business may seek to shift their
business costs to society at large.  For example, if a business dumps
waste in a river and does not get caught, the cost of cleaning up the
waste falls away from the business and to society.  There is still a
cost, but it is a cost not found on the balance sheet of the business.

A very interesting book about accurately capturing (both positive and
negative) market externalities on the balance sheet is "Natural
Capitalism:  Creating the Next Industrial Revolution" by Paul Hawken,
Amory Lovins, and L. Hunter Lovins.  It calls upon business to measure
their costs and benefits in their entirety.  For example, the
packaging used by a company to ship its products may have a negative
external cost (on the environment) which otherwise would go
unaccounted.  However, once accounted for, it may be offset by
switching to different, less wasteful packaging or by implementing a
recycling program.  In this way, external costs and benefits can be
measured, managed, and improved upon.

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