Question

Discuss the pros and cons of 19th century capitalism. For example, consider: • The rise of big companies and corporations • The increased importance of finance capital • The problems of monopoly

Answer 1

19th century capitalism has many pros and cons. The first pro is the increased level of investment by the private parties and expansion of markets in the economies who pursued capitalism. It helped economy to expand and purchasing power of the people increased. The second pro is the market forces deciding the nature of the market and government intervened little. It caused the establishment of free market. The third pro is the formation of big corporations that reached out to overseas market and catered people in those markets. It means that these big MNCs catered demand in overseas market, with the helps of excess supply in domestic market. For example, Coca Cola company was established in 1892 in Atlanta, USA. It further expanded the economy and nations became economic power. The fourth pro is the establishment, expansion and standardization of capital markets. For example DJIA exchange was created in 1896 as a culmination of capitalism, where borrowers and lenders met at one platform. New York stock exchange was founded in 1817. So, the major positive changes were observed due to capitalism in the 19th century.

Though, it had some cons also. The first con was the anti-competitive practices and monopolization of the market. To tackle this problem, Sherman act and Clayton act were created to make the market to be a place of free and fair competition. The second con was the formation of large conglomerate that became monopoly in the USA. It negatively affected the benefits and interest of the consumers. It led the government to break these large conglomerates into smaller companies using regulations.

So, above are some of the pros and cons of capitalism in 19th century.