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Capitalism Has Inherent Flaws That Need to be AddressedFrom an economic perspective, capitalism can be defined as a particular economic systemthat centers on protecting individuals’ property rights and seeks to advance individuals’pursuits of profits. For a long time, many people have pitted capitalism as a political ideologyagainst socialism, aiming at criticizing capitalism by referring to the existence of laborexploitations and the circle of financial crises embedded within the capitalist economy.However, supporters of capitalism seek to defend the system by pointing out that capitalismallows for efficient and fair economic interactions because of its emphasis on the free market.In this paper, a comprehensive analysis of the arguments of the supporters and opponents ofcapitalism will be presented, aiming at exploring potential strengths and weaknesses ofcapitalism. Drawing on detailed analysis of different perspectives that argue for and againstcapitalism, this paper will reveal that capitalism has inherent flaws that can lead to systemicinequalities and inherent economic crises, which should be addressed properly with consciousregulations from governments.Adam Smith and Milton Friedman offer the strongest arguments that portray capitalism asthe best system for general prosperity. Gaus (2010) demonstrates that supporters of capitalismgenerally seek to defend capitalism from three major aspects, including “maximally extensiveproperty rights, efficient markets employing such rights, and hierarchical firms run in theinterest of the owners” (p. 25). In the perceptions of Smith, capitalism contributessignificantly to the increase of productivity through the division of labor, while at the sametime facilitating the development of a democratic society. Smith reveals that the division oflabor of capitalism substantially contributes to the enhancement of productivity, thus
contributing significantly to wealth accumulation for nations (Smith, p. 64). The division of