Positive and negative effects of capitalism

Capitalism could be defined as the economic policy of a country that allows the people to have their own private property. The right to gain and build your own wealth and compete in the market with others falls under the prominent characteristic of capitalism. This system backs the society and encourage the people to be a promising part in the economy of the country. This unique feature of capitalism is one of its own way and holds an important position in deciding and turning the tables of growth of a nation as a whole. In a more broader sense, the distinctive features could be explained as the presence of lack of government invention, means of production completely owned by the private firms without any powerful role of government authorities and many more. But as it is known to all, everything has its own impact on others. Capitalism too have positive as well as negative impact on the people, society as well as the nation. In this write up, you will find subsequently interesting facts that gives you a clear insight of how capitalism holds different segments of pros and cons altogether on the economy of the country.

Positive and negative effects of capitalism

Positive effects of Capitalism:

To start with the positive effects of capitalism, we would start with the following points:

  1. Freedom: The most important positive influence of Capitalism on the country is that the economic freedom given to the people will relate to the political freedom of the country. It can further initiate the process of transparency and growth to all as a whole.
  2. Efficiency: With the growth of capitalism, efficiency will surely increase in all the sectors. The nation will grow with the progress of its people. Efficiency is measured by the efforts of the people and the contribution of the them in the society.
  3. Innovation: The innovation of the thoughts comes with the combined efforts of the people. Capitalism is a fruitful barrier that makes it easy to let people come forward and bring the innovative ideas in the front of all, that helps in building the economy of the country.
  4. Economic Growth: For a country to grow, economy standards of the country plays an important role. With capitalism, you get a freedom to make yourself, family, society as well as the nation to grow with a great influential economic growth of the country.
  5. Democracy: The freedom to perform actions, invest independently are the strong pillars that describes the democracy of a nation. Capitalism hence, plays an influential role in placing democratic rights for all.

All these above discussed factors, very wisely depicts the idea of capitalism and how it influences the people and the nation in a positive manner.

Negative effects of Capitalism:

With the positive entity, here comes few of the negative impacts of Capitalism, that are necessary to be discussed briefly, before coming out for a conclusion about Capitalism usefulness.

  1. Monopoly Power: Sometimes, capitalism do encourage the concept of inequality and hence a monopoly power came into picture and suppresses the workers.
  2. Ignorance in social benefit: A free market concept, supported by Capitalism can be harmful to the society equal rights. It can disturb the equilibrium of equal rights, often supported by the society.
  3. Inherited wealth and its inequalities: The inequality of social benefits may give rise to the inequality and disproportionate results of wealth distribution among all. Rich people became richer whereas the poor sections of the society often keeps on struggling for their basics as they were not inherited with a good wealth as compared to the other rich people.
  4. Social division: Capitalism may bring the huge social division among the different sectors of the society. The two major sections that comes into influence with capitalism are richer and poorer sections of the society.
  5. Cyclical Downturns: Capitalism can introduce to the major fluctuations in the business and it might can support the introduction of recession, unemployment and many other downturns that can impact the people.


Keeping the pros and cons associated with Capitalism in mind, we can say that it plays an interesting role in building the economy of the country and should be considered as a major name in the progressive approach but at the same time, keeping the control over the cons and minimizing them to the best by implementing effective strategies could help the nation, society to grow flawlessly. The growth should come from all the sections of society.

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