For many a capitalist society is the answer to the economic problem, and for others it is just an unfair economic power of the wealthy.
Capitalism is a social system based on Economic Freedom which has it's pros and cons. Capitalism is a modern Invention. It would not have been possible without certain notions, such as freedom, individuality, progress, and the mechanical world view. The most crucial component is the concept of the individual. As Ayn Rand says in her book, Objectivism the philosophy of Ayn Rand,"The Virtue of Independence consists in a man's primary orientation to reality, not to other man. In fundamental terms, we said, the independent man is as alone in society as on a desert Island." (381)
Before analyzing the pros and cons of Capitalism, we should learn about the man who's interpretation of the reality of the Industrial Revolution became the base for a pure capitalist society. In that society, supply and demand establish the prices of products in a market and the government has no power over this. This man was Adam Smith, who was considered "the Father of modern Economics." He influenced economic thought throughout the Victorian Era. Smith was born in 1723. He first distinguished himself as a student of philosophy and in 1740 was awarded a scholarship to attend Oxford University. Smith's time at Oxford proved difficult. However, due in part to his extreme intellectual skepticism which manifested itself in a devotion to the unpopular teachings of Hume. After completing his source, Smith struggled for almost five years to secure a position at a university. Finally, a friend secured Smith a job as the Chair of Logic at Glasgow University. Smith's intellectual efforts in the field of philosophy gained him little respect in the academic community. In 1762 he resigned his position and accepted a job as a tutor in order to devote time to writing the book that would eventually make him famous, the influential The Wealth of Nations.
Like anything, capitalism has it's pros. One of them is the freedom of Economy and Personal Freedom. The freedom to be able to buy or sell whatever is produced by an individual, being a company or a single person. In addition to personal freedom, private property rights and innovation, capitalism is characterized by a division of labor, a price system, profits, and generally accepted rules. None of these originated with capitalism. They have existed as long as people have performed economic functions. The difference lies in the distinctive roles they were made to play in the free market economy.
Capitalism is a society organized as a market, in contrast to society organized as government and subjects. Money, land, machinery, labor, channels of distribution, and buying and selling all work together to form such a market. Some institutions, notably government and religion, stand apart from the market; but they also depend upon the wealth it creates for their well-being.
Another positive aspect of Capitalism is the Growth of Technology. Since there is a lot of competition in the market for products, companies are forced to come up with better and new technologies to upgrade their products to stay competent.
One of the cons of Capitalism is, for example, the Health services. Hospitals, Doctors, and all health services to the public are always in demand, so the prices could be outrageously high. Only people with economic power and wealth would be able to pay for the services. The people who do not have enough resources, Health Services are not at their reach.
Another problem with a pure capitalist society is the Monopoly of Products. Some products might only be produced by one company and they can set the price to what they want, because it is a free economy. An example would be the phone companies. If they would own the service for a certain area, they could charge any price they want.
Capitalism to an extreme, like any other form of economy, will not work. A balanced market of products and not the total involvement of the government is always necessary to keep the economy from running out of control. On a reviewed article by Murray N. Rothbard, found on America OnLine's Compton's Encyclopedia, says that "Supporters of capitalism declare that economic freedom is the most basic of human liberties. Yet the market system has been strongly criticized by opponents who claim that it has not provided an equally high standard of living for all. The claim is true: there are inequalities of wealth under capitalism, although they are much less than under other systems. Success in a free market depends in large part on individual effort and ability. Effort and ability are unevenly distributed among human beings."