Question

what are the reasons of decline in capitalism? why its failed?

Answer 1

Capitalism is a free-market capitalist structure, with minimal government interference. Proponents contend that capitalism is the most effective economic structure, allowing for better standards of living. Despite its ubiquity, however, many economists condemn capitalism aspects and point out that there are many drawbacks and issues. In short, capitalism can cause-injustice, market instability, environmental destruction, short-termism, excess materialism, and economic cycles of boom and bust.

The benefits of capitalism are seldom distributed equitably. Wealth tends to grow to a tiny percent of the population. This means that luxury goods demand is still limited to a small per cent of the workforce. Capitalism's existence will cause the disparity to continue to increase. That is for a couple of reasons Capitalists will pass their assets on to their kids. Capitalism therefore does not create equal opportunities, but those born in privilege are much more likely to do well because of better education, upbringing and inherited wealth.

Capitalism depends on capital markets stock, bonds, and money markets, but financial markets continue to trigger booms and busting. Lending and confidence increase in a boom time, but markets also get carried away by 'irrational exuberance' causing assets to spike in value. But, when market sentiment shifts, the boom can quickly turn into a crash. These market crashes will lead to economic downturn, recession, and joblessness. Capitalism has experienced extended recessions at various times (the 1930s), waves of mass unemployment and a fall in living standards. Efficient companies can achieve monopoly power in a free market. This helps them to charge customers higher prices. Capitalist advocates contend only that capitalism requires economic equality. Nevertheless, a monopoly 's rights can be exploited and customers lose out because they have no alternative.

Monopsony is market strength when it comes to using output factors. For example, corporations can have the monopsony power to hire employees and pay lower wages. This allows firms to be more profitable, but may mean that workers do not share the same level of income as capital owners. It explains why we have seen cycles of slow real wage growth with rising monopsony power while the productivity of firms has increased

There is minimal government interference in capitalist economies, and dependence on free markets. Market forces however disregard external costs and external benefits. Hence, we can over-produce and over-consume goods that cause harmful effects to third parties. This can result in extreme environmental costs-deforestation, global warming, acid rain, extinction of rare species; external costs that affect future generations.