are two opposing views when it comes to how the economic should be ran to reach
its end goal. Those two opposing views are capitalism and socialism. When you
think about capitalism its centered around competition and privatization and
when you think of socialism its base on social equality. Both of these systems
have their strengths and weakness and both are fueled by good intentions but
good intentions can be lost when the people making the policy turn to a blind
eye and fail to see the direction that has been changed but the ability to abuse its freedom which leads
to an inability to incorporate proper freedom and control.
of these economic systems believe in fairness as an equalizer that cause people
to spur into action to bring everyone together. Both are grounded by the idea
of fairness and it’s the focus of both if these systems. Fairness can be seen
in different views or are measured different. Capitalism follow in the line that fairness is
found with freedom and idea of competitive pricing, production and distribution
of goods. It opens up the idea for private ownership of property and the decision
making of the people. Socialism see
fairness can only be accomplish by the distribution of opportunity and wealth. Which
means the government will owned and managed the production and distribution of
all goods allowing for work for everyone and a life built on equality. The capitalist
route rewards their labor with the idea of wealth, power and property. Socialism
see it more through equal opportunity. The workforce is a highlight of
the difference in both system.
The idea of both of these systems can only
work if both system embraced it fully. If your labor force believes in hard
work, patience can lead to prestige and wealth for everyone
then capitalism will benefit. The
weakness that arise from this system is It has booms and busts built into the system that no-one can
control. This is due to its anarchic nature.
The great amount of opportunities that are offer by this system will make those weakness a small price to pay. Socialism
weakness comes from it worker itself and the belief that human will be forced
to care for each is a concept of collective control. In this system, the worker will have to accept
and embrace the loss of control for governmental authority as a trade for
better treatment of society. For these
two systems, the freedom or control of the worker is what makes both systems successful.
Although businesses can exploit the rules of monopolism, capitalism bring the best economics system because it creates a passion for innovation in a society.
Capitalism is an economic system based on the principle of individual rights. individuals answer the basic questions of the economic system. Capitalism is characterized by private ownership and control of what goods will be produced, how they will be produced and for whom the goods will be produced. Capitalism is heavily driven by competitive conditions. Invisible market forces coordinate the economic activity. Distribution is based on ability, effort and inherited property. In capitalism, private property rights must exist and be defended by the government and people have the right to own and control possessions as they wish. People will have the freedom of choice to work, save and invest. Nothing is holding you against exchanging, being a buyers and sellers freely and willingly engage in trading one thing for another. People are motivated by profit and incentives to make certain economic decisions like producing, working, saving, investing and spending. Each individual in a capitalist economy will pursue his own personal gain. The world is 120
times better off today than in 1800 as a result of capitalism. The
Foundation for Economic Education’s (FEE) Steven Horwtiz, citing author Deidre McCloskey, noted that the 120
times figure comes from multiplying “the gains in consumption to the
average human by the gain in life expectancy worldwide by 7 (for 7 billion as
compared to 1 billion people).”
The Strength of capitalism is that the economy is able to adjust to changing conditions. There is economic freedom and people are allowed to spend their money however they wish. There is also a huge variety of goods and services, allowing a high degree of consumer.
Capitalism is a more effective way to run an economy because it brings out the best and most creative ideas, judgement, opinions, plan which will be rewarded with profits. As for those that lack the motivation will not be able to keep up with the competition. Those who want to succeed and put forth effort will do better than those who do not. Capitalism allows the individual to make their own choices and to earn wages bases on the need and the quality of work that they can put forth. If an individual has a reason to succeed then they will put in their effort to the fullest to which will add to and improve the economy and quality of life of their country. When you look at a socialism economy, it lacks the motivation that an individual has to say in what they will spend the rest of their lives doing. Not having a reason to want to succeed, an individual is much less likely to do the best that they can, thus inhibiting the economy from growing, developing, and prospering, which in turn lowers the quality of living. Capitalism brings a self-interest that become a motivator for living. “It turns out that between 1970 and 2010 the worst poverty
in the world – people who live on one dollar a day or less – that has decreased
by 80 percent” Mark J. Perry. Showing that the standard for living is benefited by
capitalism. Capitalism lifestyle limits the power of the government. If you think about most successful businesses like Amazon, Google and
Apple it always a benefit when people have a personal interest in their work. One key aspect they use in more of those company is that
they pay the CEO in share stock so it will keep them focus on improving the
company. Power is diffused between many businesses, rather than concentrated in a central government. Which causes the power to be spread out and have the businesses to go against each other which will benefit the economy. One of the other main idea of Capitalism is the idea of a profit and loss system. When a business fails in a capitalism system it will force it to shut down. In a socialism system, a business can’t be shut down because of the fact that needs are demand by the people and there isn’t other competition to support them if they fail. The cost of item will also differ because socialism is the complete opposite, which means that their products are sold at prices set by the government and the idea of individual or corporate profits are unheard of. There isn’t anything to drive the prices down on goods. Some see the government controlling all the means of production and businesses as a wise and wonderful thing because they believe that being divided from one another by inequalities of wealth will give the power to control the economy to the wealthiest instead of to everyone, and they would rather the government control it instead of those elite and wealthy few. However, sometimes giving the government too much power and control can lead to communism. This is exactly what happened to Germany and several other countries. Many times, an individual will take advantage of the failing economy of a country and become a dictator, as Hitler did.
The major benefit of capitalism is that it aligns everyone’s interest with the goal of growing the economy, and it has proved more efficient at generating wealth within the economy than other systems. Capitalism benefits from
having it resources more efficiently allocates than other economic system because
of the market. The fact that it makes
everyone follow their own self-interest it makes changes more swiftly and
adaptable than decisions that are centrally controlled. Capitalism also benefits
from self-interest in acquiring goods and services from others and having everyone follow
their own self-interest in the marketplace. While in other forms like socialism
they rely more on the concept doesn’t not fit the needs of every single self-interest. Sometimes the greediness of capitalism allows
people to be self-aggrandizing as they want. That being said, without having the government
or some type of intervention in the system the self-interest can have bad effect such as pollution, theft, or other behavior we generally see as undesirable. This is the reason that we have the legal systems and the courts.
As for poverty, under
capitalism, no poor man is prohibited from creating a fortune.
A perfect example would be that in late 19th
century and early twentieth century America how hundreds of really
“poor” immigrants, who came here with nothing of value and couldn’t
speak a word of English, came to America and within a generation were America’s
newest elite and they did it without the government on their backs, or on the
backs of others. according to World Health
Organization (WHO) data, a decline termed “faster than ever.” Capitalism results in lower child mortality rates by
producing better access to medicine and standards of living. Capitalism provides valuable
goods and services, rewards hardworking people and initiatives, creates a
higher standard of living for all, narrows the gap between the common person
and wealthy, and provides opportunity to realize dreams and desires.
Now you can ask that are the disadvantages of socialism? Now we can look to the past of the U.S.S.R. It went under because of socialism. Socialistic countries are known as some of the poorest in the world. One problem with socialism is the economic side is that under a socialistic government, the people who don’t work get money, and the people who do work don’t get any more money than the people who don’t. Therefore, why should anyone work? Socialism also has even worse problems, which are quickly proven by the fact that no socialist economy has ever been able to sustain itself. Socialism is one of the worst evils that can plague society, with the Nazis being a prime example. Adolf Hitler, Joseph Stalin, Mao Zedong were some of the worst people ever to exist on the face of the earth, each causing the deaths of thousands upon thousands of innocent people, and all based on their socialist ideologies. The misuse of power can be a destroyer in
every type of economy process. In socialist communities, the government has control of basically your entire life. So, if the government is in control, there is no one to stop them from creating havoc. It brings out a destruction of Individuality.
it comes to distribution the people in charge are not only ones who can manipulate
how it is structure in socialism but the media can be manipulated to certain political leaning. The law itself can
be manipulated to prevent from creating corruption within the system. Each section
of manipulation takes the people further away from having any bit of control
over their own life and will put them in a position to defend themselves. Under a system of Socialism, the goal is to meet the basic human needs first Then the goal of satisfying the local economic demands is implemented. Only
after both have been addressed then trades with other communities be considered. This structure makes, innovation is discouraged
because the incentive for innovating is gone and the work efforts are pushed to
be dedicated to distributing output for essential, self-survival purposes only There is no incentive to innovate because there is no guarantee of success, which Socialism demands.
There are two main problems with implementing a socialist system. One is that governments which try to install one fail and become corrupt. The second problem occurs if the first one doesn’t, and that is the people simply are not willing to work; they essentially have more incentives to not work than they do to work. When people realize that their unemployment checks are 3/4 of what they made while working, they’ll simply quit working. When more and more of the tax burden is shifted to the wealthier people of the socialist state, in order to pay for the social programs still in place (such as the unemployment benefits), the rich will leave. When the rich leave, the government still have a lot to pay for, so it borrows from other nations. When this occurs, the national debt keeps growing and growing.
There is a positive side to Socialism too. Karl Marx who is the found of socialism
production, therefore, develops technology, and the combining together of
various processes into a social whole, only by sapping the original sources of
all wealth – the soil and the laborer.”
Which means he assumes that people do not get a
fair wage for the work they deliver.
The core of socialism itself as an economy should
be structure to satisfy the wishes of human needs. meet economic demands, and
create true equality but just because it’s not a top-down structure it can
easily turn into that formant with a misuse of power. which is why there is
such a hesitation to implement this type of community structure. It creates a system without classes Because it is a community-based system, equal opportunities are presented to everyone. When
people work for a cause that all profit are shared it will bring a feeling of eliminating
selfishness and bring a united feeling. The strive for equality by any means shouldn’t
have a label of wealthy, skin color or any sort of label to create division. In socialism, the overall objective is for everyone to work together so that everyone can get a piece of the pie. Everyone receives an education, health care, unemployment, work, etc. The effort to make everybody
equal in economic, social, and political terms makes socialism more morally
worthwhile than capitalism. It reinforces the fact that everyone was
created equally and it was only through human actions that disparities arose.
An economic system can
feature characteristics of both capitalism and socialism. A mixed economic
system allows a level of private economic freedom in the use of capital, but
also allows for governments to interfere in economic activities in order to
achieve social aims. This type of economic system is less efficient than
capitalism, but more efficient than socialism. Finland, Sweden, Norway,
Denmark, Germany, and UK all have mixed economies. Let take
Denmark for an example “The government projects 1.9% growth in 2016,
while private sector estimates are about 1% growth.” according to Forbes. It is expanding from both factors of
government and private company. Every country relies heavily on human
resources but Denmark lack oil and gas. They allow the government to form a
large part in bringing those needs for the people and Cooperatives form a large part of some sectors, be it in
housing, agriculture or retail. This model is using by a capitalist economy
that encourages creative. While the laws make it is easy for companies to
shed workers and implement transformative business models, employees are
supported by generous social welfare programs like a socialism system. The
nation’s tax structure is based on individual rather than household
income, coupled with a flat-tax. The result is a system that treats all
citizens equally and encourages workforce participation.
Winston Churchill once said,
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
What always get bring up is income inequality
but what people don’t seem to get is when you have true freedom you absolute
are going to have inequity because if you have the true freedom to do whatever
you want some people aren’t going to do much. You’re going to have Steve jobs
or Elon Musk that are going to try to go gangbuster and own half the country.
while others are going to be fine with just working a little bit and hangout
with their friends if they make an income that is sustainable. There is just so
many difference personally in people. There are going to be people that decide
to do more. People are unequal in their
effort, desire, focus, displace and capable.
In life, some people will get a bad hand of cards and it can be seemed
as unfair but you have to figure out a way to win with that hand. You got to do
your best with the hand you got. Figure out what you can do and find something
to be passion about. In conclusion, both capitalism and socialism have their high and low points, but in the end, capitalism is by far the better way to run an economy. It is impossible to not notice that some of the most powerful countries in the world have capitalistic economies and that through this they thrive and prosper. Capitalism is a better economic system because it allows individuals to make their own decisions and to do well because they are self-motivated, it limits the power that a government has, and it helps the country become more technologically advanced and better educated. It is through all these things that a country becomes successful in trade and business, which leads to more money, more scientific and medical discoveries, and overall, a better quality of living for its people. If one works hard enough, they can be anything they want to be and do anything they want to do. There are no barriers blocking one’s personal progress to become what they want to be.