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Capitalism Benefits Everyone

Essay by   •  April 14, 2019  •  Essay  •  365 Words (2 Pages)  •  7 Views

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‘Capitalism benefits everybody’: discuss with reference to contemporary interactions between business, society and government policy in Australia.

Capitalism is defined as an economic system in which a country’s trade, industry, and profits are controlled by private companies, instead of by the people whose time and labour powers those companies (KimK,2018) Based on this principle, it is logical to say that the aim of businesses in a capitalist economy is to maximise output, in whatever way possible, to increase profit margins. Hence, a clear downside to capitalism is the potential ignorance by organisations of negative externalities such as pollution on the environment, and therefore society. This in turn reveals that the interactions between business, society and government are not necessarily beneficial as businesses may have a degradational impact on society upon interaction. This notion is most effectively conveyed by Energy Australia, who emitted “20.8 million tonnes of carbon dioxide equivalent gases” (Om 2015) into the atmosphere, lowering the quality of life in areas close to relative power stations and significantly contributing to the threatening issue of climate change. Additionally, such externalities may result in the implementation Pigouvian taxes (government-imposed taxes on company actions that are considered socially harmful), which in turn negatively impacts such businesses, further reiterating the notion that Capitalism does not benefit everybody.

Ownership of labour as a factor of production means that organisations can dictate the rate at which they pay their workers. Australia exercises a minimum wage policy for its labour force, however, developing countries without such regulations are then targeted by transnational corporations for exploitation of low labour costs. This results in a poor quality of life for these societies with limited options for employment. In summation, it is undoubtedly evident that the concept of capitalism is not beneficial for everyone due to the negative impacts arising as side effects of rapid production.

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