Question

Discuss two demerits of capitalism.

State two demerits of a market economy (or a capitalist economy).

Answer 1

1. Inequality of Income and Wealth: Capitalism leads to vast inequalities where wealth is concentrated in the hands of a few, making the rich richer and the poor poorer. This unequal distribution creates social disparities and economic imbalances.
2. Exploitation and Class Conflict: The working class is often exploited by capitalists who seek maximum profits. This exploitation results in frequent class conflicts, strikes and industrial unrest, which hamper economic stability and productivity.