Demerits/Disadvantage of Capitalism

by • 09/06/2011 • B.COM PART 1 Introduction to BusinessComments (0)823


1-Sovereignty Of Capital:

Capitalistic economy’s sovereigns element is capital. Capital is of primary importance and the humans find a secondly place.

Capital is the nucleus of the business around which all other factors including human revolve. In the way past capital was the slave of human, now the position is reverse.

2-Class Struggle:

The poor get poorer and rich get richer, the fact which enhances class conflict. The whole society is divided into two, the fact the poor and rich classes.

3-Rampant Corruption:

Capitalism give rises to rampant and uncontrolled corruption which arises from minimum government control over the business and excessive freedom of economy.


Interest is the base of capitalism. According to Islam, interest is haram and carries many inherent evils which are disastrous for the society.

5- Possibility Of Cartels Etc:

Industrialists tend to form cartel for avoiding competition. In addition to it, other combination include trusts, mergers, holding companies and pools. Under such arrangements they try to keep low quality, high prices, low production and limited distribution.


Risk is very much part of capitalistic economy and stems out of competition, poor management policies, unfavorable rise or fall in prices, new inventions, government policies, and political conditions.

7- Business Cycle:

Business cycle works only in developed capitalistic countries. It is nonexistent in poor and socialistic countries. Business cycle effects employment, production, spending, balance of trade, foreign exchange reverse.

8- Other Evils:

Capitalism has other inherent ills as under:

1-   Extravagance, worldly vanity, and pomp are common.

2-   Satta, lottery, gambling are all allowed

3-   Nudity, sensuality are free and unchecked.

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