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Capitalism Vs Socialism
Capitalism Vs Socialism
Compare and Contrast Capitalism and Socialism
Capitalism and socialism are both types of systems in different societies throughout the world that have been successful at times, but also not so fortunate in its’ success at other times in history. Both have their good and bad points, although the main focus I am presenting will acknowledge socialism in better terms than the capitalist economy. This is to judge which system will be most prosperous, for the most amount of time, in the majority of people’s lifetimes. Also, opinions from socialists are given to how they examine a capitalist society, and how capitalists examine a socialist society. Criticism is given in each one’s point of view, along with defending arguments. Also, my personal opinion is the main conclusion to which economy is the most prosperous based on facts contributed in my own research on both capitalism and socialism.
The definition for capitalism would be a form of social system that separates the economy from the state. Laissez faire is another name that was given by Scottish philosopher Adam Smith. He said it is better for a government to have no intervention in the economy at all. Capitalism is based upon private ownership of property and every person has the right to live his life in any manner he chooses, as long as he does not violate the rights of others. Individuals are allowed to run their own businesses in a free market in such way that he or she creates the wealth for him or her self. It usually depends on how self-motivated a person is to determine how wealth they will become. If a person is always working hard to make money, they most likely will, compared to a “bum” who can not get welfare in this type of system. Capitalists believe that the only purpose of a government is to protect its citizens from force or fraud. They claim that the force is the protection of individual’s rights. This is achieved in such ways as the use of police force to protect the rights of citizens at home, a military to protect citizens from foreign attack, and a court system to enforce contracts and settle disputes between residents. Capitalists also feel that initiating force can only violate rights, thus the government only uses force in relation of those who initiate it. For instance, if an individual can not start his own electric company, it is a violation of his freedoms. A capitalist’s argument towards this statement would be that the governments’ legal monopoly on utility companies prevents people from starting their own electric company. In a capitalist society all people can start any kind of business they want. The protections of monopolies are not there. If a person wants to take the chance on their own company,
even if it is next to one that is successful, the peril is in their “own hands.” The only law capitalists clearly state, and one must follow is that members of society can not infringe
on the rights of others. They give credence to holding individual rights as absolutes, and freedoms as absolutes. From a purely economic view, a capitalist is a person who buys in order to sell for profit.
Socialism is quite different compared to capitalism, almost like an exact opposite. Instead of the ownership of private property, the government plays a large role where society owns social property such as banks and factories. Although, they own it through the government. Socialism is a society where the resources of the society, controlled by workers, are used for the benefit of the whole economy, not just the rich. The government does have control over production and economic activity, but the workers themselves decide what to produce, where to produce it, how much to produce, and how to distribute the product fairly for the benefit of everyone. Philosopher Karl Marx and his followers were convinced that sooner or later alternatives to capitalism would emerge because “it is already in the process of developing within a capitalist society and we must find a way to overcome the resistance of capitalists and their supporters to achieve socialism.” The best definition for socialism is the equal distribution of society’s goods to be achieved by the government. It focuses on positive freedoms such as everyone is entitled to the basic necessities: food, clothing, shelter, and a job. This is where the government steps in to help those who are needy and have rational reasons to why the government needs to give assistance to these people by providing programs such as welfare. The best point that can be said about the socialist system is that there are
incentives to good workers, which makes them work harder to get these bonuses. The bonuses can be anything from cash, extra vacation, company parties, and prizes. The working class has the basic knowledge and principles they need to run the economy. Training is given where it is needed, and educational institutions have been refined so we have professionals in the fields where it is more important that the person has extensive knowledge in the subject. For example, doctors go to school for many years to learn all they can about the human body so that they will know what they are doing when it comes to the time they have to perform a surgery and make judgements on a real human being. For those who are working in a socialist economy the government has made laws all companies must follow that are also working class principles. All workers should be treated fairly and equally and this is what these laws were made to do, protect the working class. Minimum wage is set so all workers receive atleast this amount of pay, and then wages must go up according to their type of job. Also, good working conditions must be provided for safety reasons, no child labor, and no discrimination at the work place are a few laws that have been made.
Capitalists and socialist disagree about certain ideas each group has and criticizes each other’s ideas. First we will start with what capitalists think socialism is. They feel that man must sacrifice his own notions for the sake of the greater good in their economy. They feel that they must also sacrifice their individual mind, which denies them the sole means of survival for man and his nature as a rational being. Capitalists do not regard this system as an ideal. A capitalist’ ideal accommodates one standard of life, man’s life. The measure of a socialist system consists of the appraisal of, the relationships between men, and institutions that govern the forms of association. In defense to this, socialists say that the workers in a capitalist economy struggle against corporate greed. Working people should work together socially to produce all things together. Capitalists are different and take the wealth that they create to build more capital for himself. They feel as if there is a contradiction between social production and individual capitalist ownership. One capitalist deprives another capitalist of property and more wealth is concentrated towards a smaller and smaller number of people. In order to compete in this type of market things must be cut; jobs, wages, and benefits. Although, capitalists say that contrary to this highly held belief it is not a system that exploits a large portion of society for the sake of a small number of wealth businessmen. They say that socialism causes the exploitation of labor. They do this by placing monopolies on labor and production and exist merely to follow what a “spokesman” of socialism has in mind.
There are good points and bad points concerning both types of systems, although I feel that socialism has more good points than a capitalist economy, which makes it more successful. First of all I will start with all of the bad points I feel are in a capitalist society. Unregulated capitalism leads to worker exploitation because there is no government intervention to protect workers. Racism in the workplace takes place because there is not a minimum wage set and impedes poorer minorities from reaching economic advancement. They will not have enough money to pay for the high priced items the companies they work for produce. If a minority worker were able to do the same work for a lower wage then it would be in the economic self-interest of the employer to hire that person. The driving force under capitalism is driven by a profit motive because firms want to maximize their profits at all times. The protection against discrimination is not there, but it is provided by a socialist economy. A capitalist’s argument against this would be that workers are free to choose who they work for and if they decide that they are going to work for someone who pays less than minimum wage, that is their own fault and should seek work elsewhere.
Poor working conditions are also a problem that comes up. With an unregulated economy, immoral businessmen will try to increase their own profits by selling cheap, unhealthy, and unsafe products to an ignorant community. The workers who make the products have unsafe machinery, an unsanitary workplace, and no insurance so if they were to get hurt they would not be safeguarded. In a free market there are no government agencies that say what goods, foods, and services can be sold. Since 1938 the U.S food and drug administration has decided what medical goods and food can be sold in the United States. This protects us from attaining drugs or food that can be dangerous to our health. Capitalists do not see this as a good thing because “it is an attempt by the government to intervene in the free choices of individuals regarding what medical products or food one can purchase.” I think this is a ridiculous idea because we as individuals can not know what medicines or food can be harmful to us because we do not have the education to determine this. The FDA is there to do the testing and research for our own good, and if we want to abuse the product they say is bad, then we can also do it at our own risk. This sort of regulation is also mandatory in the socialist government.
In a free market the only type of monopoly that can exist is a “non-coercive monopoly” or one that is earned, in the words of a capitalist. The goal of a welfare system is to help certain citizens when they need financial aid in order for them to be productive members in society. Capitalists do not provide this service and say it is the government stealing money from its citizens on the basis of those with more wealth who have a duty to serve those with less. It may do this, but in the long run it creates a class of fewer people who are dependants and have been given a way restart their lives or begins one. Financial aid for college students through grants and other scholarships is another example of this. The money is going to a good cause to better young adult’s education and we can have more qualified workers in various occupations.
I do agree with a few concepts that belong to a capitalist society when it comes to competition in businesses and pollution concerning private property. In a free market they do not have monopolies to protect them from competition. The fact that they do have so much competition would make a company strive to give the best service and goods to their customers. Once they are considered to be the best in their field people will go to their company. For another company to do well they must also offer the same, or if not better qualities in their products. Therefore, we then have many companies who are all offering good products. The point that overrides this in my mind is all of safety standards that are unregulated and do not protect the workers who make the successful companies’ products.
The key to stopping unnecessary pollution is the verifying identity for capitalism, and the best thing that could come out of it. The reason that it is so easy to pollute rivers, oceans, air, and land is because it is publicly owned. Since public property belongs to everyone, no one person takes care of it and property with no real owner is easy to pollute. If all property is privately owned then no one can dump garbage in a river because it will drift into another person’s private property, thus violating his or her rights. Capitalists do not have a government, but they do believe in courts, or a way to settle disputes over contracts such as property rights. Also, if the beaches and parks are owned privately and the owner charges money for people to use his land, then it would be in his own self interest to keep it clean so more people will come to his park instead of a competitors’.
Socialism is the better of the two systems in several ways, and more successful. It is the governmental laws and regulations that make them this way. It does not make the economy more complicated or unfair by any means. Socialism is a society where all people who want to work not only can work, but work for a good living, have a say over the conditions of their work, wages, and even who runs their workplace. There are no bad jobs, only low wages and bad working conditions, but under socialism all workers are required to be treated with respect and have a job that gives them dignity. Laws have been made to protect the worker from low wages, poor working conditions, and other types of exploitation. Discrimination against any worker, whether it is because of sex, race, color, or religion is also illegal. Employers must hire for skills in a person and can not use the excuse such as they do not want a woman working there as an excuse when she is the most qualified. A minimum wage has been set and raises with the economic times when prices also raise. In a capitalist society those who are not given this raise can not make a good living, where as socialists believe that everyone is entitled to this. If a person is skillful then they are paid according to that. Education plays an important role also to help employees reach these skills. Socialism is a society where workers will be trained how to run a society and learn the skills to make good economic plans. Social ownership is not enough. It also means that working people run, operate, control, manage, and own all of this property. It makes decisions as to where it wants to be in five years that affects us for the fifty years, and what plans we are going to make to get there.
When comparing and contrasting socialism with capitalism one can find good in both ideas of systems, it just depends on a person’s opinion. Also, I think morals also play a large role in which system a person would choose to follow. Socialism would be the system a moralist would more likely follow than capitalism. It appears that capitalists are greedier and care about what is better for himself or herself than everybody as a whole. Where as highly moral people tend to help others and care less about being wealthy and more how they are treated, along with their fellow workers. They like the government because they, and I also feel that the government does provide good programs for those in need. The key to economic success lies in the socialists’ economy because they not only offer freedom for everybody, but a way so all businesses are fair with each other, not only in competition, but also to their customers and employees.
1. “What is Socialism.” http://www.igc.apc.org/socialism/SOCIAL/
socpres.htm (4 August 1999).
2. “Capitalism: Frequently Asked Questions in Theory and Practice.”
http://www.ocf.berkeley.edu/~shadab/capit-2.html (4 August 1999).
3. Reisman, George. Classical Economics Versus the Exploitation Theory.
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