What are the advantages and disadvantages of a capitalist economy?

Advantages of Capitalism Ideology:

1. Higher Efficiency

What is meant by efficiency itself is the accuracy of the use or utilization of each factor of production. With this increased efficiency, the profits derived from economic activities will also increase.

2. High level of Creativity and Innovation

Freedom of opinion must remain in accordance with the principle of expressing opinions in public in his country. Well, because of this freedom, every creativity and innovation owned by citizens can develop properly because it is supported by the right environment. We need to know together that one indicator of the country's progress is the level of innovation and creativity of its citizens.

3. Rapid Economic Growth

The advantage of the ideology of capitalism which we discuss next is very rapid economic growth. The control of the private sector over economic activity makes competition among them even higher so that economic activity becomes very passionate. This is what signifies economic growth.

4. The existence of Decentralization System

By using this system, the performance of each production structure will become more effective and efficient. These advantages are expected to increase profits or profits obtained by business actors so that the country also gets a positive impact.

5. Consumers pay more attention

consumers are so important for industry players considering that without consumers or customers, of course the economic chain does not run perfectly. Therefore, each producer competes to meet the needs of consumers and keep consumers subscribed to these producers.

Lack of Capitalism Ideology:

1. The absence of a perfectly competitive market

 Generally there are various different industrial fields so that there is no competition between industries with the same product. This will certainly make the market monopoly in the community. In addition, the price becomes less competitive and consumers must accept the price set by the producer.

2. Economic activity is only focused on profit

In the economic ideology of capitalism, one drawback is that economic activity only focuses on how to always get profits. As a result, many factors outside the business that will be affected by this, whether it's environmental factors or community factors.

3. The suppression of MSMEs

in the ideology of capitalism, the owner of large capital is the party that will benefit. Why is that? Because with the large capital available, he can run a large industry as well. That way, the big industry can market its products more broadly. The opposite happens with MSMEs (Micro, Small and Medium Enterprises). They will find it difficult to compete with large industries so that many do not survive in the competition. as a result, large industries will take over the existing MSMEs.

4. Unequal distribution of wealth

 unequal distribution of wealth in a country. in short, using this ideology, the rich get richer and the poor get poorer. This is certainly not desired by many people, but what power, that's what happened in this ideology. Therefore, there arose various ideologies that were contrary to this ideology.

5. Bring up the ideology of secularism

Secularism itself can be understood as an understanding or basis for opinion that separates the state from religion. This is of course contrary to the basic values of Pancasila adopted by this country so that the application of capitalism is actually not compatible with the culture of our nation, Indonesia.

Explanation:

1. Understanding capitalist ideology an economic system in which trade, industry and means of production are controlled by private owners with the aim of gaining profits in a market economy.

Learn More:

Details:

Grade: Middle School

Subject:  Geography

Keyword: Capitalist economy

answer; european crusades;