5 Key Reasons Capitalism Is Better Than Socialism

The majority of us would agree that being able to own our own business and keep most of our hard-earned income is a good thing. It is also safe to bet that most of us would agree that having the government control every aspect of our lives – while taking most of our money from us for the “public good” – is a bad thing.

Based on all the recent news stories the media has been feeding us, we would think the first ideal described was socialism and the latter was capitalism. However, it’s the other way around. Capitalism describes the desirable version of life whereas socialism describes the depressing one. Why is hating capitalism the newest trend in the media? Capitalism provides us with so many benefits we don’t even realize most of the time. I have listed 5 of these wonders below.

1. Efficiency

In a free market society, the only way businesses can succeed is through supply and demand. Companies have the incentive to make their products more cost-effective than their competitors’ products. They also must produce a good for which there is a demand, otherwise the firm will go out of business. The result of this is that firms end up reducing inefficiencies in their workplace by cutting costs and producing goods at the most efficient level. This also supplies the public with a good they actually want.

2. Innovation

We often hear that capitalism breeds innovation. This is because firms have incentives to work hard and produce new items for the market. Competition creates innovation because everyone wants to be the inventor of the newest good. With innovation comes a higher standard of living for the average person. A competitive climate boosts the economy and the well-being of the populace.

3. Opportunity

With capitalism, everyone has the opportunity to succeed. The environments that we are born into do not need to negatively affect our future. If a person wants to be a doctor, a business owner, or even the President of the United States, they can. The only thing stopping us from achieving greatness is ourselves. Through capitalist structures, we have equal opportunity for all. We all have the chance to succeed in society as long as we work hard and are willing to try new things.

4. Freedom

Capitalism provides people with the freedom to do nearly everything they please. When it comes to institutions, food, and many other goods, there are so many options to choose from. Since capitalism causes innovation, it would make sense that there would be a wide range of goods to choose from in the marketplace. This allows individuals the freedom to buy what they want, go to the institutions they want, and live the lives they desire without government intervention.

5. Wealth

There’s a reason many consider America to be the greatest country. The majority of our success can be attributed to having a free market society. Capitalism allows the economy to grow at an exponential rate. As businesses make more money due to competition and cutting down on inefficiencies, they are able to invest more in the overall well-being of the economy. Along with that, if individuals can have any profession they desire, they also have the opportunity to make as much money as they desire. All this contributes to the aggregate wealth of the economy, resulting in America being an economic powerhouse.

Capitalism is the economic structure we have to thank for America’s wealth and success. For some reason, this idea gets lost in the media and especially among millennials. A free market structure is the most efficient.  It provides for the most economic freedom and aggregate wealth of all other economic philosophies. We all need to remember that. So today, enjoy capitalism and remember that it’s the only way you can read this article right now.