Executive summary
As the author states in the introductory part, the main purpose of writing this book was to understand what a capitalism is, why it is better than other economic systems, what the main shortcomings of capitalism are, and what solutions can be proposed in the twenty first century so that to make capitalism work more effectively (Kotler 1-3). Kotler also claims that efficiency of the economic and political systems should not be measured by only net financial outcomes. Besides gaining leader’s positions in the global market, national economy should increase the average level of living standards, which is, yet, omitted very often.
Philip Kotler states that many countries have chosen capitalism as the main concept of running their economies back in 1900s. As a result, modern world witnesses the globalized capitalism, according to which, each economy is being analyzed according to the level of development of its five main markets: government, business, nonprofits, households and financial institutions (Kotler 3). Contrary to capitalistic concepts many countries still prefer socialistic ones, though in practice those economies act more like a “capitalism with a heart”. Countries like Cuba, Venezuela or Ecuador tend to control any type of business on their markets, thus act as anti-capitalstic ones.
Analysis
Kotler describes capitalism as a complex system with a vast number of interconnections. Complex systems cannot be regulated with a single-fix solution, neither it can be done with efforts of only one of the stakeholders. The author supports the view that capitalism has many cons, among which is an increasing inequality. Nevertheless, he also states that “capitalism may be a poor way to run an economy, except for all the other forms that have been tried and failed” (Kotler 14). However, the greatest value of the Confronting Capitalism is a variety of solutions, suggested on how to diminish and prevent possible negative effects that usual capitalistic economy can face.
The core idea of this book is to change the standardized perception of how capitalism works. Basically, Kotler identified inequality and poverty as the main problems, which cause further economic, social and political failure. He claims that business and financials, which were considered as the main market regulators, actually depend on consumers largely. Therefore, increasing the average living standard is not only a moral obligation of large companies, but also a justified necessity. According to Kotler (45), once individuals have wages of a high level, they have enough money to be spent on purchasing goods and services that business offers them; thus, they can boost the economy. However, rapid increase in wages may not only shorten the poverty level, but also fasten the inflation. Hence, the government as one of the five main stakeholders in the capitalistic market has to interact accordingly. On the other hand, lowering wages can cause dropping down the demand level, oversupply and thus decreasing of the investments, and as a result, slowing down the economy.
In order to balance this tricky system of increasing/lowering household incomes, Kotler suggests the government to use a fair taxation. Despite the fact that laissez faire principle limits the government’s influence on the market, the state is obliged to use taxes and other monetary tools to monitor and sustain the overall stability of the economy. None of the large corporations, nor the households can view the whole picture of economic changes, but only the government. Which is why it has to use its power for the mutual welfare. As Kotler states, the better living conditions are granted to people, the happier they are, and happy customers are eager to spend more money, and, hence, both the government and business will benefit. This, according to the author will lead to an economic development rather than to a numeric economic growth, reflected in GDP (Kotler 20-22).
Works cited
Kotler, Philip. Confronting Capitalism: Real Solutions for a Troubled Economic System. AMACOM. 2015. Web. http://www.amazon.com/Confronting-Capitalism-Solutions-Troubled-Economic/dp/1501238868
