Like any other economic or political system, Capitalism has both it’s number of pros and cons. But before any of this, we must establish a clear definition of Capitalism. The main idea of a Capitalist society is that private individuals or companies acquire or own the four factors of production which include land, capital, land, and entrepreneurship. At the same time, free market competition rule or decide production, pricing, and the distribution of goods and services. With this knowledge, we can now identify the different advantages and disadvantages of this society.
In a capitalist society, consumers are often able to maximize their spendings by paying for the best products. Due to this, producers are driven to create efficient and innovative products that will cater the public demands. This then increases their drive for competition against the other producers in the market. Along with this, economic growth occurs due to to the high demand of products. There is an increase of a country’s GDP because consumers feed of the products and services they purchase.
Along with these advantages, there are also different disadvantages to take into consideration. One being the possibility of Marginalization to occur. Due to the increase of demand and competition, only the best of the best are chosen to work under these companies, leaving the elderly and the disable to fend for themselves. Second, Capitalism tends to look the other way when it comes to negative externalities that may occur. These include pollution, climate change, and health risks. Although these may increase the productivity of creating products and may lessen the cost, over the time, the effects of this decision will be felt by not only the company but the whole country as well.
As quoted in the video, Neoliberalism sees the government as the problem rather than the solution. It was given great emphasis that in order to establish and maximize society’s growing services and goods, one must leave the decision-making to the markets. Recently, there has been an emphatic turn towards neoliberalism being used for political-economic practices. Neoliberalism believes in free-market as the most efficient method to reach the maximization of global resource distribution.
How does this concept link to globalization? This has become the main driver of globalization. Through the eradication of government-imposed rules and regulations on the movements of services and goods, as well as one’s capital, companies are able to maximize their production of goods, thus increasing productivity and growth. These neoliberal policies advocate the same ideology and goal as globalization; removing restrictions and barriers between different countries and nations to acquire a growth in the global economy.
There are multiple factors that affect the growth of globalization in the world. The economic interconnectedness of countries can be explained by briefly analyzing what drives such phenomenon.
Political Decisions
Globalization has been evidently shaped by political decisions that either promote or prevent economic cross-border trades. One’s government handles and decides the importation of tariffs which is a decision that impacts the size and structure or international trade. It is their choice to either lower or increase the barriers, both having different consequences on the incentive trades within different countries.
In the video, it was shown how the leaders of each country, such as Japan and China, had huge impacts on their country’s economic growth. Their decisions will inevitably affect the country as a whole, good or bad. Therefore, their decisions do weigh a lot when it comes to their impacts on globalization and growth.
Demography
One vital factor to consider is the population of a country due to it’s major differences in number. A higher amount of individuals in the country may result to labor-abundant companies and corporations, but with the combination of a limited capital, this can easily be combined with a capital-poor society.
Technology
Another important factor to consider is the technological advancements one country may have. Due to the current technical progress, many individuals are able to work more efficiently and has made long-distance importing and exporting easier and more accessible.
The Bridge to Development 