Disadvantages of the Private Enterprise System
January 30, 2010 by admin
Filed under Uncategorized
Critics of the private enterprise system make a variety of charges against the sys tem. A summary of those charges follows.
One common criticism is that capitalism perpetuates grave inequities of wealth and extravagantly rewards success. Father Theodore Hesburgh, president of the University of Notre Dame, claims that “The real threat to capitalism is the maldistribution of wealth across the globe. We cannot hope for world peace when 20 percent of the people in the world have 80 percent of the goods.”2 Indeed, the United States, with 5 percent of the world’s population, produces 40 percent of the world’s goods and services, while 20 percent of its population earns 46 percent of the income.
Other critics have said that the capitalist drive for profits has warped people, making them overly competitive and aggressive.
Economist John Kenneth Galbraith argues that private enterprise values wasteful private consumption more than needed public services.
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In answer to these charges, Time Magazine, in an article “Capitalism: Is it Working . . . ?” states: “Such charges are extreme and often unfounded. For the most part, the inequality of wealth under the free (private) enterprise system is the unavoidable price that must be paid for genius, hard work, or plain luck. The equal ity of results demanded by many leftist reformers would stultify society; complete equality can only be enforced by a dictatorship.”1
The 1975 “National Survey on the American Economic System” conducted for the Advertising Council, Inc., found that 75 percent of Americans surveyed ex pressed favorable attitudes concerning our economic system, specifically because it has demonstrated itself to be the best economic system available.4 Let’s now ex amine the other two major economic systems to determine why we believe our sys tem is the best. As you read, keep in mind that an economic system’s value must be viewed from both an individual and national perspective.
