Capitalism as an economic system. An empirical analysis of the capitalist financial stability during crisis

Abstract

Capitalism is a very powerful regime nowadays. Capitalism regards capital as a main factor of production. It supports the capitalist to benefit from wealth accumulation without putting this capital at risk. The mechanism to do so is called interest. This results in the following consequence; Weak competitors who are not able to provide a capital compared to that of a big capitalist are excluded from the competition and put aside. So, the capital is of nature to influence the basic economic decisions like what and whom to produce.At the state level, governments depend on the capital of capitalists to expend on development. The capital also influences policy making and election campaigns. In other words, the political and social life depends on the market which is in the hands of capitalists.This article empathizes the problems that accompany the capitalism by conducting an analysis of the financial stability. To achieve this, there are used the profitability ratios for 20 financial institutions in times of different crises that have affected the financial market. This article concludes that; in the todays’ economic environment, which is ever changing, the capitalist system might be at risk. It needs either restructuring or reconceptualization in order for the economic system to perform accurately.