What is Capitalist Economy?
Benefits of Capitalism
2.) Efficient Allocation of Resources. In theory, capitalism ensures resources are distributed according to consumer preferences. Firms are not rewarded for producing goods people don't want.
3.) Efficient Production. Firms have incentives to be productively efficient - cutting costs to improve conpetitiveness and productivity.
4.) Dynamic Efficiency. This is efficiency over tome. Firms need top respond to changes in consumer preferences and respond to new consumer trends.
5.) Financial Incentives. Evidence suggests that people work hardest when there is a.personal financial incentive.
Countries with a Capitalism Economy
The economy of the United States is 82% free. The average tariff rate is low, although there are several non-tariff barriers. Financial markets are open to foreign competition and are the world's most dynamic and modern. Corruption is low and the labor market is highly flexible.
The United Kingdom's economy is 81% free. The average tariff rate is low, although the government does implent distortionary European Union agricultural tariffs. Support for private enterprise is a world model, and the financial sector is modern.
Hong Kong's economy is 89.3%free. Income and corporate tax rates are extremely low. Business regulation is simple, and the labor market is highly flexible. Inflation is low, although the government distorts the prices of several staples. Investment in Hong Kong is wide open.