It also supports free thinking and inventiveness. This suppresses individualism and intellectual freedom that undermines the independence of entrepreneurs as they access their capital. This paves way for everyone’s freedom to give their decisions and being analyzed independent on there intellectual capability. It leads to a number of ideas to be analyzed, discussed and implemented in the business according to their advantages. It also gives the business the best decision with the best output
It has encouraged political freedom in China as transactions in a market economy are voluntary with a wide diversity that voluntarily permits its activities is a fundamental threat to repressive political leaders and greatly diminish power to coerce. Thus suppression is not expressed as capital owners control everything in the market. Ann Rand argues that “capitalism is the only morally valid socio-political system because it allows people to be free to act in their rational self-interest.” She wrote: “Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”
China has also increased in its self organization due to the profit motive in the businesses. The promise of profits gives entrepreneurs incentive to use their knowledge and resources to satisfy those wants. Serving the activities of millions of people, each seeking own interest, are coordinated. This is because it permits many solutions to be tried, and that real-world competition generally finds a good solution to emerging challenges and argues central planning often selects inappropriate solutions as a result of faulty forecasting e.g. before the central bank set interest rates and this limited control creates inefficiencies because the long-term activity of the economy cannot be predicted.
China’s capitalization recognizes private property and allows private profit seeking businessmen. There communist party invites businessmen to join its ranks. Thus the country has allowed foreign investors in the country as long as they meet the country’s standard of running profit marking firms. This has attracted many foreign investors leading to the increased economic growth.
Attraction of foreign investors has led to adequate utilization of resources in the country. Investors utilize all the available resources in the country. For example, energy production utilizes all the available souses e.g. geothermal energy from soil, wind energy from wind, hydroelectric power from water, and solar energy from sun. These utilizations of resources prevent underutilization of resources and effective deliverance of goods and services to people. Production of efficient services and goods has led to considerate prices to the citizens of China. This lead to reduced cost of living as investors reduces prices to sell. Authoritarianism leads to short-run economic gains as there are no logical and economic limits. Investors get there profits back within a short period after investment. This helps individuals in investing in other projects. Lack of authoritarian capitalism leads to China’s government involvement in controlling country’s resources. An economic system in which the state directs the economy is economy. They control all major sectors of the economy and formulate all decisions about the use of resources and the distribution of output. They decide what to be produced and direct lower-level enterprises to produce those goods in accordance with national and social objectives. Planned economies are in contrast to unplanned economies e.g. where production, distribution, pricing, and investment decisions.
Capitalism is also associated with unfair distribution of wealth and power which leads to monopoly or imperialism, wars and various forms of economic and cultural exploitation; repression of workers, as the government is involved in setting prices and wages. This is known as planned economy. It is an economic system in which the central government controls industry by making all decisions regarding the production and distribution of goods and services. It’s also referred to as command economy or centrally planned prices are always set according to their expected profit not considering individuals capability in affording the commodity. Different companies are set in different places depending on China’s government priority and capability. This leads to places with companies increase in growth and wealth as they provide employment to the nearby population with salary to depend on. Increased wealth leads to high living standard and thus power over other individuals in places with no jobs to lean on.
Its regarded by many socialists that capitalism in China is irrational in that production and the direction of the economy are unplanned, creating many inconsistencies and internal contradictions. Companies constructed without correct analysis of resources leading to closure of companies and loosing employment. This has lead to increased poverty cases as there is increased population with increased loose of employment. Economic instability is also experienced. Continuous capitalism requires continual economic growth, and will inevitably deplete the finite natural resources of China, and other broadly utilized resources. such as Immanuel Wallerstein,one of the scholars, have argued that forced labor e.g. slaves, prisoners, and other coerced persons is compatible with capitalist relations similar to original goods produced to the market without quick knowledge.