Ethics

The word Capitalism refers to an economic system in which business firms and private individuals carry on the production and the exchange of goods and services through a multifaceted network of prices and markets for making profits.

In the article the author Amartya Sen wanted to point out the issue that capitalism was a historic term and these days we are emphasizing towards free market economy (aka market economy). The basic difference between the two is that Capitalism focuses only on profitability while free market economy also focuses on public policy and social factors. By asking a question about the term capitalism usability, Mr. Sen means that capitalism is an obsolete concept and there is no need of economic reform which leads to a New Capitalism (Sen, p. 1).

The author also emphasizes that capitalism is not a useful term to use because it has a very narrow approach. He also highlighted that Adam Smith never used the term Capitalism instead Adam Smith always see markets and capital working for the betterment of economy and hence society. Sen pointed out that Adam Smith had more concern about wealth distribution and equality rather than just profit making (Sen, p. 2).

In conclusion, it has to be stated here despite several advantages capitalism has a lot of disadvantages which can not be neglected while setting up economic policy for a nation. This is the reason why many socialists including Karl Marx criticize capitalism and refuse to accept it as a perfect economic system.