Capitalism (free system):

An economic system based on "survival of the fittest".   

This is a simple and short definition of capitalism. But is illustrate it self to visitors and readers.

 Basically capitalism is based on the Darwinian concept of survival of the fittest. In capitalism there is no central authority to control the economic activities. The word capitalism is now quite commonly used to describe the social system in which we now live. It is also often assumed that it has existed, if not forever, then for most of human history. In fact, capitalism is a relatively new social system. It is used in and still majority of peoples using it as a social system. Scaled-down examples of capitalism are flea markets, bazaars and black market trading.

Properties of Capitalism

• Social/cultural rules and political laws define the environment.
• Supply and demand provide environmental pressures.
• Those that best "fit" that environment survive and maintain the rules/laws.
• Those that can't/don't thrive in the system, and otherwise lack participation, are culled.
• Successful capitalistic systems tend to be open and competitive.
• A healthy capitalistic system results in economic incentives.

How many classes operate under capitalism?

Capitalism is the social system which now exists in most countries of the world and majority of peoples have adopted it as an economic system. Under this system, the means for producing and distributing goods (the land, factories, technology, transport system etc) are owned by a small minority of people. This group of people is known as the capitalist class because they have or posses the capital. Most people must sell their ability to work in return for a wage or salary (which is known as working class.)

The feature of working class is that they are paid to produce goods and services which are then sold for a profit. The profit is gained by the capitalist class because they can make more money selling what we have produced than we cost to buy on the labor market. In this sense, the working classes are exploited by the capitalist class. The capitalists live off the profits they obtain from exploiting the working class whilst reinvesting some of their profits for the further accumulation of wealth. As it become clear that the well fare of the working is ignored and only the capitalist class is in the position to gain maximum profit from the goods that are produced by the working class. The working class peoples are only paid for their work, in the form of salary or wages.

As we have mentioned in the above paragraph that there are two major classes working under this system. One is capitalist and the other is working class. This class division is the essential feature of capitalism. It is also necessary to know about some other classes like middle class of the society or this system also but I will restrict my discussion only to these two classes. And this will be my focus point in further discussion. Because I think that these two classes will be sufficient for the readers to understand about the capitalism because these two classes are the main features of this system.

There is no ambiguity about the status and the living style between these two classes. Members of the capitalist class certainly know who they are. And most members of the working class know that they need to work for a wage or salary in order to earn a living.

Capitalism prevailed in the major part of the world as an economic system, and adopted by most of developed and it has the following basic principles,

Personal profit motives:

In it the well fare of peoples and society as whole are ignored, and the peoples are of the view to gain more and more profit. They don’t consider the worst situation of other poor peoples and totally ignore it. Most of the rich peoples in the society does not help the poor, if they are passing their life in very bad situation and circumstances, and leave them in their worst position.

In capitalism, the motive for producing goods and services is to sell them for a profit, not to satisfy people's needs because the capitalist don’t have any interest in the welfare of the peoples of the society. The products of capitalist production have to find a buyer, of course, but this is only incidental to the main aim of making a profit, of ending up with more money than was originally invested. This is a fact you can easily confirm for yourself by reading the news about it and also by reading the financial reports of most of the capitalist countries and also about their system. Production is started not by what consumers are prepared to pay for to satisfy their needs but by what the capitalists calculate can be sold at a profit. Those goods may satisfy human needs, but in fact, those needs will not be met if people do not have sufficient money.
The profit motive is not just the result of greed on behalf of individual capitalists. The need to make a profit is imposed on capitalists as a condition for not losing their investments and their position as capitalists. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to keep their means and methods of production up to date. There fore the greed of capitalist increases when other capitalist making money from their production as there Is no restriction on the production.
As we will see, we hold that it is the class division and profit motive of capitalism that is the main reason for most of the world's problems today, from starvation to war, to alienation and crime. In capitalism, the capitalist making more and more profit while the working class are ignored and paid very little for their work. There fore the gape between the poor peoples of the society and capitalist class increases day by day that leads to crimes and other bade activities in those societies.

Private property:

Each and every one has their own property under this system. There is no or very less contribution for poorest. The peoples are providing very low taxes to the govt and as a result the rich peoples are becoming more and richer, while the poor are becoming poorer day after day. Each and every person, especially the rich peoples, are only looking for their own benefit that how to gain more and more income. As a result the gap, between the poorer and rich peoples, is becoming wider.

Laissez faire (free market):

In it the peoples can produce as much as they can. There are no restrictions on the productions and economic activities. It is widely assumed that capitalism means a free market economy. In this system the demand and supply are automatically generated, because there are the natural market forces. The producers are free to produce and manufacture more products and sell it in the market and receive the prices of there own choices. There fore this system is very beneficial for manufacturers and they can obtain more advantages from it. While on the other hand this system is harmful for purchasers who don’t have sufficient money to purchase the commodities for their basic needs and requirements. But the producers are in the position to take unfair advantage of such system and receive mush profit from their production, as there is no system to control the production side.

This system is still in existence in most of the developed countries like USA, UK, FRANCE, GERMANY etc. and due to the existence of such system their, the poor peoples in there countries are passing very bad life. They also want to become rich, but due to lack of wealth they can’t do it, as a result they are adopting the unfair means to get it. In this system the market forces, demand and supply, are used as mechanism for the solution of economic problems in capitalism.

As we have already discussed that it is widely assumed that capitalism means a free market economy. But it is possible to have capitalism without a free market. Those systems that are existed in the U.S.S.R, China and Cuba are really describing this system. These class-divided societies are widely called 'socialist'. A cursory glance at what in fact existed there reveals that these countries were simply 'state capitalist'. In 'socialist' Russia, for example, there still existed wage slavery, commodity production, common property, common land, buying, selling and exchange, with production only taking place when it was viable to do so.
 Russia continued to trade according to the dictates of international capital and, like every other capitalist, state, was prepared to go to war to defend its economic interests. Russia did it because there was an immense interest in this type of economic system. And if they did not did it there was a fear that this system would be totally removed from those countries and also in those in which the Russia was interested to adopt this system in there own countries. The role of the Soviet state became simply to act as the functionary of capital in the exploitation of wage labour, setting targets for production and largely controlling what could or could not be produced. I am therefore justified in asserting that such countries had nothing to do with socialism as I define it. In fact, socialism could not exist in one country alone—like capitalism it must be a global system of society and will operate in most parts or countries of the world.

It is also possible to have a free market economy that is not capitalist. Such a 'market economy' would involve farmers, artisans and shopkeepers, producer of goods each producing a particular product that they would exchange via the medium of money. There would be no profit-making and no class division—just independent producers exchanging goods for their mutual benefit. But in fact, it is also doubtful whether such an economic system has ever existed in this word or not. I do not think that it is a good alternative for modern society. Such a system would almost inevitability lead to capital accumulation and profit making—the definitive features of capitalism.

As this discussion would be incomplete with out mentioning its advantages and disadvantages, there fore some of it is given below,

Advantages of Capitalism

• Internally it is a stable economic system, because it is consistent with human behavior. People understand that life is not fair - there's no "free lunch". You have to work to survive and only the lucky who manage to thrive within the socio-economic matrix make it to the top. As long as there is a belief/hope that one can advance in the system, there is an incentive to participate.
• It is also externally stable system, because in a capitalistic system requires innovation and flexibility to keep up with the changes in supply and demand. Such a system is generally prepared to deal with the influx of competition from external sources. When ever any changes occurring in demand and supply this system has the capacity to modify itself with these changes.
• Large populations are likely to be diverse, which is beneficial to healthy capitalistic systems.
• Large, diversified societies tend to gravitate towards hierarchical social systems; capitalism easily adapts to such structures.
• It is very beneficial, especially for capitalist, who have wealth. And, also, those who has the capacity to control this type of system.

Disadvantages of Capitalism

As I have tried to discus in the above section some disadvantages of capitalism. As it is a fact that some people in the society will always be able to work harder than the and similarly be more innovative than others, as a result they will build a stronger position for themselves in the economy. This will lead to inequality of wealth within the economy.
Lack of a proper Government welfare, several disadvantages of capitalism will surface, which are discussed below.
Another disadvantage of capitalism is that there is limited government control.

1. Inequality

There tends to be a rise in inequality as benefits of capitalism are not equitably distributed. As wealth tends to remains in the hand of a small percentage of the population, the demand for luxury goods is often limited to a small percentage of the workforce, one of the main capitalism disadvantages.

2. Irrational Behavior

People tend to get caught up in hypothetical bubbles but ignore economic fundamentals, leading tom irrational behavior.

3. Monopoly Behavior

Another popular disadvantage of capitalism is that firms gain monopoly over power in a free market allows and exploit customers by charging higher prices. They often pay lower wages to workers. As a result the customers and the workers are not loyal to the organization and similarly the gap between these classes has increased up to considerable extent.

4. Immobility

One of the main problems of capitalism is that a free market is supposed to be able to easily move factors of from an unprofitable sector to a new profitable industry. However, this is much more difficult practically.
Because of the inequality of wealth in a truly Capitalist society with no Government welfare great poverty is bound to occur. Leading to homelessness, slums, disease, etc; this will further lead to forced migration. This will expand the problem to bigger cities too.

• It is not acceptable in most modern societies to allow portions of their population to be "culled".
• Those in power tend to construct rules that limit diversity and competition, thereby weakening the flexibility and strength of the system as a whole.
• Vast imbalances in opportunity encourage revolt, which disrupts and destabilizes the system.

What are the remedies for Capitalism?

It is also necessary to give some set of remedies for the injustice of capitalism with the poor peoples of the society from the capitalist. There must be some remedies available to over come the or at least minimize its drawbacks. I have suggested a few, that is given below,

The first remedy that is necessary and very important is that the peoples who have adopted this system have to move to another system, which is the most profitable, justified and acceptable for every one of the society, and that is Islamic system.

• It is also necessary to create secondary social mechanisms to support those peoples and sector that do not "fit" in the socio-economic system.
• It is also important to encourage and include all members of the population to compete, and open up competition to external markets, in order to maximize diversity and flexibility but unfortunately this is not present in this system. Islam only encourages all the peoples of the society, with out any ethics, colors, and family settlement to take part actively in the business and economic activities of the society.
• Educate the elite to the systemic benefits of resource distribution, and encourage incentives for such distribution. But unfortunately this characteristic is also lack in this system, because the capitalist have no concern with the education of peoples. They are only interested in their own profit; it is a valuable for them. On the other hand if we look at the Islamic economic system, it is based on the principle of equity and advises its followers to do also some thing for the education and the welfare of the society and especially the poor sector of the society.