ECONOMIC DEVELOPMENT. — Social Science STD 10 — Question

Inspite of having many virtues, the capitalist/market system is imperfect. Some of its serious defects/ limitations/disadvantages are as follows:

Maximisation of profit is the main objective of the capitalist system. The industries focus on the production of luxury and comfort goods and reduce or neglect production of the essential goods.

The natural resources are over-utilised and wasted as there is no control of the government.

Consumers are exploited as they do not have adequate knowledge of market.

Concentration of wealth and income in the hands of a few rich increases disparity in income.

The capitalist class exploits the labour by paying low wages.

The possibility of monopoly is ever present.

Fluctuation in market leads to economic instability and such occurrences like collapse of market leads to worldwide depression.