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This is called "laissez-faire" economics; the system allows American companies to make decisions that are best for the firm which in turn increases wealth throughout society because it makes an incentive to increase productivity. It also turns out that this system of capitalistic economics is the most efficient at allocating scarce resources. For example, the opposite of capitalism, a command economy, failed in the Soviet Union. The Soviet Union's economy failed because it tried to allocate resources through central planning, instead of having businesses determine how much of a product to produce...
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