Question

What is the role of competition in a capitalist economy? Explain all of the possible effects of competition between capitalists for both the workers and the capitalists.

Answer 1

One of the driving factors of the capitalist economy is that the private ownership of organisations where they are driven by the profit norms. At such situations , competition plays a major role where there are profit norms everywhere with which many new firms enter the market. As a result, every firm tries to capture the market through many ways by engaging people in it, by improving customer satisfaction, by improving the quality of similar products etc. Therefore a healthy competition cites the healthy growth of an economy. The capitalists try to capture the market as a result of competition and the demand for skilled workers increases and the worker jobs depend on their skill as a result of such healthy competition.