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Capitalism is a political and economic structure in which a nation’s trade and industry are controlled by private proprietors for profit, rather than by the nation and socially it is based on the principle of individual rights (Bowles 2007). Capitalism is characterized by accumulation of capital, competitive markets, limited government and wage labor (Ingham 2008).  Politically, capitalism employs laissez-faire (freedom) system. Legally a system of objective laws (opposed to rule of man) and economically, when such is applied it results in free-markets (Paul 2013). It is therefore true to say that capitalism results in unequal distribution of wealth, waste due to uneven distribution of resources, dangerous working conditions ,lack of democracy as the wealth have the greatest influence, pollution of the planet due to excessive production of goods and dictatorship whereby the managers get massive salaries while the workers get minimum wage (Merino 2010). True to the words of Winston Churchill who stated that ” the natural capitalism vice is sharing of blessings unequally, and the natural socialism virtue is the sharing of miseries unequally.” (Hancher & Moran 1989).

The term PESTEL stands for Political, Economic, Sociological, Technological, Environmental and Legal (Clapham & Pestel 2008). The essay will analyze how capitalism has produced negative results from business organizations and how it effects’ can be regulated. Politically, capitalism has impacted political decisions such as, contributing massively to political campaigns, the health of the nation, education of the labor force and the economy’s infrastructure quality. These capitalists have also influenced tax policies, employment rules, environmental protocols, trade margins and reform tariffs to their favor. Political factors in a country can be applied in regulating capitalism by government.

economically, capitalism has also influenced what happens within the economy by determining economic growth and decline, exchange rates, interest rates, price increases, revenue system changes, wage tariffs, working hours and unemployment levels (Silk & Silk 1996). Socially it has influenced the rapid changing social trends in the markets, decreased health consciousness, safety issues and global warming (Friedman 2012). Capitalism also influences technology Change in technology can impact the work and dealings of an organization by resulting to unemployment (Jessop 2001). These economic factors can also be applied by governments to assist in regulating capitalism.

Environmental factors refer to what is taking place with regard to ecological and environmental matters. Capitalism has also contributed to pollution that as a result has contributed to impacting many industries including agriculture, insurance and leisure industry. With major changes in climate occurring due to global warming (Vasapollo 2011), they have influenced legislation changes that might have an impact on employment, resources, imports and taxation legally.


How capitalism can be better regulated

John Maynard Keynes came up with a program called the New Deal. Keyne’s theory, which is accepted widely is adopted in most modern countries where they combine some government control and capitalism. (Rosenof 1997). theories of regulated capitalism developed at the start until the of the 20th century, when the problem of regulating market conditions gained status, due to the exacerbation of the conflicts of capitalism in particular; the increase in the negative force of predicaments of overproduction (Bottomore 1985).  These theories of regulated capitalism, which state cyclic development of the capitalist economy is directly proportional to the investment process which is uneven and the consumer demand’s fluctuations, becomes prevalent under state-monopoly regulation of the economy. Elsner & Hanappi. (2008) indicated that the alleviations and the prevention of the economic crises that are cyclical requires regulation of consumer demand and all capital investments.

Friedman (2012) pointed out that Keynesian theories that regulate capitalism is the most reliable means of economic activity stimulation and increases the spending of the government by a sum exceeding tax revenues increase and in meeting deficits in budgets by national debt increase. Because the capitalist economy is a complex economic system made up of diverse elements, it must be regulated freely through the competition .Additionally; it should also be regulated by means of exceptional government economic measures. The result “market economy” will completely disappear, giving rise to “crisis-free,.............

Type: Essay || Words: 2971 Rating || Excellent

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