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- It allows for and even encourages inequality in a society. Capitalism allows some people to get rich but also allows others to become poor.
- Capitalism allows products to be produced even if they are not in the public good. For example, it allows cars that get very low gas mileage to be produced even though they help cause global warming.
- Capitalism allows industries to pollute the environment. In pure capitalism, a government would not be able to prevent companies from, for example, dumping toxic waste in a river.
- Pure capitalism allows people to lack basic needs such as health care.
- Unregulated capitalism allows for things like the Great Depression and the financial crisis of last year because it doesn't prevent businesses from acting in destructive ways.
I don't know that you can say that these are THE five criticisms. It could be that your book has others...
A critical flaw of capitalism is the idea of making profit and money as the definition of identity. One of capitalism's essential flaws is the idea of determining success and failure in terms of profit and materialism. This creates a reductive approach to defining identity and allows quantification of that which is unquantifiable. Another structural challenge to capitalism is the idea of reducing all associations into that of money or material wealth. I would suggest that a problem with capitalism is that since is places a primacy on money and wealth, all political notions of the good are actually extensions of capital formation. This creates the potential for collusion between businesses and government, threatening the overall premise for representative democracy. I think that this evokes another problem for capitalism, which is that it is by nature, anti- democratic. For example, a factory owner who experiences success only does so over the interests of more workers. The more democratic approach would be that the workers receive a more equal distribution of the wealth over the owner.
Capitalism refers to the system of private ownership of the capital or the means of production. This was a fairly effective system, devoid of any controversies as long as the capital or the means of production of was limited to simple hand tools. But with ownership of large pieces of land by land lord things began to change, creating the classes of employers and the employed. This relationship between employer and employed, it should be note, is not like other market relationship between buyers and sellers.
With increasing size of capital requirements the controversies and problems of capitalism have increased many fold. The main criticism against capitalism include the following.
- Technology today typically requires requires huge investments in capital. This has resulted in a very small number of people to have over control over the productive resources of the entire society. Such concentration of power in hands of a few tends to corrupt them, who may misuse their power against the best interest of people in form of monopolistic business practices.
- Capitalism results in great disparities between income of people owning the capital resources and others.
- Owners of resources tend to exploit the people who do not have any independent means of production and therefore have to rely on employment for wages.
- The employees have limited motivation to put in their best to the work they do. In this way their capabilities are used much below their potential. This results in inefficient use of human resources, in addition to reducing satisfaction people derive from thei work.
- Capitalism also tends to inhibit the motivation and initiatives of public at large for improvement and innovation as they feel alienated from the productive system. In this way it restricts progress and improvements.
1. Too much emphasis on the individual
2. Too much emphasis on private property
3. Supply/demand model doesn't work anymore
5. Reason is over emphasized
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