Capitalism, sometimes referred to as the process of accumulation of capital is a type of economic system where the ownership of all the means of production lies with the private owners and these means are operated for the purpose of earning profits. Capitalism exists in a lot of countries all over the world.

By providing the right to create free markets that are not regulated and to own private properties, capitalism provides the possibility of maximizing wealth to the individuals of the society. The basic principle of capitalism is to provide the society with socio-economic schemes that would benefit the society and its individuals. This type of socio-economic system is also called laissez-faire.

What are the ethics of capitalism?  Firstly, the moral code of capitalism is completely opposite to that of communism. In the latter, the state has the responsibility of administrating the markets. In Capitalism, the economic system including factors like supply and demand, price, capital, investments, distribution of goods, production, etc are entirely controlled by the investors and the government has no right to it. Hence capitalism is based on the principle that reduces the governmental influence on private possessions as well as businesses. Basically, capitalism advocates an economic system that is free from the administration and influence of the government.

While not true in all cases, capitalism and democracy are linked together closely. Most of the ethical values of capitalism are derived from democratic norms! In a capitalist society, although the government does not possess a heavy authority over the markets, it does not mean that the government is entirely ignored. The need of the government intervention arises when an abuse in the capitalism system crops up. Some examples are coercion, fraud, fraudulent practices, etc.

According to Adam Smith, a Scottish philosopher, capitalism is the sole means of acquiring the maximum satisfaction for individuals in a society. He argues that because capitalism is based on the principles of equality of opportunities, it is the sole solution for having a prosperous and wealthy society. He also pointed out that the individuals are motivated to put in their best because of the existence of self-autonomy in the financial system and also because of the healthy competition. Now, when the individuals put in their best efforts, it is only obvious that the nation would prosper as well. Smith however, ignored the negative aspects of the ethics of capitalism.

Now, don’t get it wrong, capitalism is not flawless, it does have its own share of flaws and defects. Because of this, corporate capitalism is said to be the most detested form of capitalism and many critics even argue that it promotes the unequal distribution of power in the society, as in oligopoly and monopoly. Socialists even accuse capitalism of exploiting the lower classes of the society.

One of capitalism’s ethic, the concept of taking interests rates while lending money, is the reason why a lot of major religions like Islam, Judaism and Christianity detests and condemns and disapproves capitalism.