FREE OR CAPITALIST ECONOMIC SYSTEM

Definition: Free or Capitalist Economic system may be defined as one in which all or most means of production are owned and controlled by private individuals and in which the Economic activity of the government is at a minimum. In this type of Economic System, private individuals play greater role than the government in taking descitions on what, how to produce and the distribution of what has been produced. Private individuals who have the Economic wherewithal participate in all sectors of the economy. In the real sense, the pure market capitalist economy being characterised by the private ownership of all the means of production and distribution does not really exist.

   Nearly all the so-called First Wold or developed nations of the world such as Japan, North America, New Zealand, Western Europe, Australia, etc, adopted the free or Capitalist Economic System. In these countries, profit is the main motive for either the private or the state participation in the production of goods and services. Resources are allocated according to price signals in these Capitalist countries.

FEATURES OF A FREE OR CAPITALIST ECONOMIC SYSTEM

1. Private ownership and control of all means of production and distribution with government Economic participation at a minimum.
2. It has Aristocratic structure characterised by few Economic agents as compared with large number of persons participating in Economic life in a country.
3. Freedom of enterprise that permits the private business enterprises to obtain and organise means of production, in manufacturing goods of their choice.
4. Freedom of choice to Consumers, workers, owners, and property to buy whatever they like, work wherever they may feel like, use their property. Etc.
5. Competition which leads to Economic rivalry between one firm, consumer, etc, and another.
6. There are many producers as well as many buyers.
7. Profit motive is the guiding principles.
8. As a market, descitions made effective through a system of market, all means of production purchased in the market. Etc.
9. The use of an advanced technology for high degree of productivity to be ensured, compete favourably, profit increased, etc.
10. Production is carried out in different forms as opposed to single firm.
11. It is highly developed occupational specialisation.
12. Labour is regarded as a marketable commodity.

ADVANTAGES OR PROS OF OR ARGUMENT FOR CAPITALISM

1. capitalism is self regulating. I.e, it needs or requires no direction or guidance from government.
2. It guarantees maximum freedom of enterprises.
3. Capitalism encourages hard work.
4. It encouraged faster Economic development.
5. Capitalism is an Economic System that provides the people with alternative choice.
6. It brings about increase in quality of goods produced.
7. Capitalism encourages Economic competition among producers and consumers.
8. It leads to specialisation in production with its many advantages like increase in production, skills, leisure, economising tools, saving time etc.
9. The system also leads to invention and innovation.
10. Capitalism creates room for effective use of talents.
11. Finally, capitalist Economic system helps a country to be self reliant.

DISADVANTAGES OR CONS OF OR ARGUMENT AGAINST CAPITALISM

1. One of the argument against capitalism is that it encourages few rich individuals at the expense of the majority. 
2. Capitalism leads to individual or private monopoly with many disadvantages.
3. Inequitable distribution if income is another disadvantage of capitalism. 
4. Capitalism gives room for the exploitation of many people by few individuals in a country. 
5. In a Capitalist Economic System, profits are made by all means even at the expense of human life. 
6. The system encourages and leads to increase in acquisitive tendencies. 
7. Unhealthy rivalry is another disadvantage of capitalism. 
8. The tendency to grab wealth encourages and lead to increase in crime rate in a country. 
9. Capitalism encourages oligarchic form of government.
10. Capitalism creates an atmosphere of job insecurity and unemployment.
11. It is a self functioning system which has never regulatory measures.
12. Finally, capitalism leads to man's inhumanity to man.