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Capitalism Has Inherent Flaws That Need to be Addressed From an economic perspective, capitalism can be defined as a particular economic system that 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 ideology against socialism, aiming at criticizing capitalism by referring to the existence of labor exploitations and the circle of financial crises embedded within the capitalist economy. However, supporters of capitalism seek to defend the system by pointing out that capitalism allows 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 of capitalism will be presented, aiming at exploring potential strengths and weaknesses of capitalism. Drawing on detailed analysis of different perspectives that argue for and against capitalism, this paper will reveal that capitalism has inherent flaws that can lead to systemic inequalities and inherent economic crises, which should be addressed properly with conscious regulations from governments. Adam Smith and Milton Friedman offer the strongest arguments that portray capitalism as the best system for general prosperity. Gaus (2010) demonstrates that supporters of capitalism generally seek to defend capitalism from three major aspects, including “maximally extensive property rights, efficient markets employing such rights, and hierarchical firms run in the interest of the owners” (p. 25). In the perceptions of Smith, capitalism contributes significantly to the increase of productivity through the division of labor, while at the same time facilitating the development of a democratic society. Smith reveals that the division of labor of capitalism substantially contributes to the enhancement of productivity, thus
contributing significantly to wealth accumulation for nations (Smith, p. 64). The division of

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