What are the Advantages of Capitalistic economy?


Capitalistic economy has the following advantages:

Economic freedom:

Every individual is free to adopt business, profession or occupation of his choice. There is no restriction from the government in the matter of business activities are affected by consumers’ preference.


Maximum utilisation of resources:

The individuals of the economy make best possible use of land, labour, capital, tools, equipments and other resources, so that they can earn more and more profit. There is competition in the market. Every producer tries to reduce cost of production, so he can sell his goods at more margin of profit.

Higher standard of living:

Individuals work very hard to earn more and more income. Increased income results in higher standard of living. Mechanisation and large scale production increase national and per capita income.


Reasonable remuneration:

Every individual works very hard to get more and more wages. Due to the competition in the market, workers get reasonable and competitive remuneration. If the worker does not get wages according to the qualification and experience, he moves to some other firms. Wages and salaries tend to be reasonable due to competition.

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