Disadvantages of Capitalism

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.