Capitalist argue that people need some incentive in order to work hard. This is only possible if people reap the fruits of their hard work. Innovation, according to this view will only prosper if people are encouraged with reward (Cantwell & Santangelo, 2000). Capitalism offers encouragement and monetary incentives and this in turn motivates people to innovate. The argument that capitalism encourages innovation is quite ponderous because people do get motivated by incentives. It is human nature to work for profits and capitalist economies allow profit seeking behaviour. People also get an opportunity in capitalistic society to move forward and attain a higher social position.
Free market mechanism allows anyone, who is willing to work hard enough, to grow socially and financially. There is room for a person to improve his or her life style and living standards under capitalist economies. This argument explains the importance of freedom in human life. Human beings need freedom to live a healthy and satisfactory life therefore they should have freedom in their economic life as well. Government therefore should not intervene in matters of economy.
Other economic systems do not allow social mobility (Fitzpatrick, 2002) therefore capitalism is to be preferred. It is argued that capitalism is consistent with human behaviour therefore it cannot lead to market failure. Markets are made by people and if a system is in placed that are consistent with human behaviour and nature then it cannot fail. Fighting and surviving is the way through which human beings have survived since their ancient times so this makes it clear that it is human behaviour to fight in order to survive.
The same principle if applied to the economic system can never fail because it will be based in human nature. Human beings are ‘envious zero sum thinkers’ who only want their own benefit (Wilkinson, 2005). This is why capitalism is best suited for human society and if it is representative of human nature then it cannot lead to market failure. Human beings are very diverse and a system that endorses the differences between human beings will work. Capitalist economy takes into account diverse demands of human beings. People are free to make and consume whatever they want under capitalist system.
This endorsers their differences and therefore will work. Other economic systems have a serious deficiency that they do not endorse human differences
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