1 Tygokora

Why Socialism And Capitalism Essay

Show More

Leadership and Group Theory Midterm Essay
Capitalism vs. Socialism
September 21, 2013

Although Capitalism has a different meaning in various groups, the term is commonly acknowledged as “the private ownership of the means of production, and the coordination of the economy by the market” (Bresser-Pereira, 2012, p. 22). On the surface, the meaning of capitalism seems straightforward; referring to an economic system in which private individuals, rather than governments, own property and businesses. But beneath the surface, strong currents of opinion and theory swirl about the term. Yet in contrast, Socialism is more collective, it allows for everyone to benefit from the economy, instead of only…show more content…

In order for Socialism to be successful, leaders will need to employ influence that will reach groups who will exert a restraining influence. The group of Stakeholders or Wall Street want to keep Capitalism alive, because as it allows them to remain profitable. In a socialist economy they would not be able to use the decision method they are most noted for using, which is the “majority rules.”They would be required to be effective leaders. Make sound decisions and actually care about the benefit of everyone. Socialism allows for equal rights, and for any leader to be successful there has to be a group with his same vision. Member commitment is the key to positive behavior and attitude. When members of a group are included and treated equal, they are more apt to remain loyal to their leader and committed to the group’s goals. With Capitalism, there is always one goal and that is profits. Private businesses that continue to allow abuse of labor laws and wage contradiction will always favor Capitalism, because it will always generate profits and they do not care about what the “rest of the group thinks”. It is my strong belief that Socialism supports leadership and group dynamics, because of the nature of the term. Everyone is included as well as their input. When I vote for an elected official, I want them to have everyone’s best interest. Using a consensus system that allows anyone qualified to run for office regardless of their social status, and everyone

In order to debate between Capitalism and Socialism, it is necessary to understand what the differences, advantages, and disadvantages are of both systems. Basically, Capitalism advocates private property, and that society does better when an individual can purchase and produce as they see fit. Socialism, in essence, is the theory that property ownership should reside in the hands of the government, and that the government can do more with the assets than individuals can.

The difference between Capitalism and Socialism can be summed up by their definitions. They are based upon completely opposite philosophies. Capitalism is a political and economic system in which factories, companies, land, etc. are owned privately in order to create profit for the owners. Prices of goods and services fluctuate depending on the desire of the consumer and the availability of the goods (the law of supply and demand). In a capitalist society, there will be significant differences in wealth and power between those who have capital (machines, factories, ships, land, etc.) and those who do not. Capitalism is the only politico-economic system based on the doctrine of individual rights. This means that capitalism recognizes that each and every person is the owner of his own life, and has the right to live his life in any manner he chooses as long as he does not violate the rights of others.

Socialism is a political and economic system which advocates collective or governmental ownership and the administration of the means of production and distribution of goods. In a socialist society, there is no private property and, at least theoretically, everyone cares for those less fortunate. In this form of government everyone has generally the same amount of money, which means the rich person’s money goes to the poor so that everyone can be middle class. In Socialism, the concentration of

Characteristic Pure Socialism Modified Socialism Modified Capitalism Pure Capitalism

Ownership of means of production All publicly owned Much publicly owned Most privately owned All privately owned

LIMIT on accumulation of private property Severe Major limitation Small limitation No limitation

Government REGULATION of economy Yes Yes Yes No

Government MANAGEMENT of economy Yes Yes Yes No

Government PLANNING of economy Yes No No No

Size of welfare system Immense Quite extensive Small to moderate No welfare system

power by the state is at the expense of individual freedom. Socialism upholds that man is not an end in himself, and that he must sacrifice his own convictions for the sake of the greater good of the collective entity.

There are advantages under capitalism. The individual's pursuits of his own economic self-interest simultaneously benefits the economic self-interests of all others in the society. In allowing each individual to act unhampered by government regulations, capitalism causes wealth to be created in the most efficient manner possible which ultimately raises the standard of living, increases the economic opportunities, and makes available a growing supply of products for everyone. The free-market operates in such a way so that as one man creates more wealth for himself, he simultaneously creates more wealth and opportunities for everyone else, which means that as the rich become richer, the even poor become richer. Capitalism serves the economic self-interests of everyone, including non-capitalists in the society. Accelerated economic growth, prosperity and rapid progress in science and technology are all benefits of Capitalism. Capitalism naturally divides into certain stratas, but they will be much less authoritative than in a centralized government as under Socialism. More people will have access to wealth which means more power. Capitalism does not command people how to use their power or wealth.

In theory, there are advantages to Socialism. It sounds noble to advocate the equality of everyone, and supply national retirement and health care systems to make ordinary people better off. Theoretically, under Socialism, there should be no unemployment, no inflation, and no disparity of wealth, status, or power. However, in actuality, the under-privileged in most socialist countries have “benefits” that are expensive, substandard and hard to obtain.

Although Marx, the “Father of Modern Socialism” predicted that Capitalism would fail, actually Socialism has been the greater failure historically. Since the socialist state holds a universal monopoly on labor and production, no economic incentive exists for the socialist state to provide anything more than minimum physical subsistence for the workers. Exploitation is inherent to the nature of socialism because individuals cannot live for their own sake, rather, they exist merely as means to whatever ends the socialist rulers may have in mind.

Capitalism has its disadvantages as well: high unemployment, the “boom-slump” cycle, poverty and crime. Despite those disadvantages, however, capitalist societies, historically, have done remarkably well in improving the human condition as a whole over the long run, while strict socialist societies have had severe declines in economic welfare.

In conclusion, it has been proven by history that a free-market economy (Capitalism) increases the living standards of most people more than an economy controlled by the command of the state (Socialism). An excellent natural example of this is East and West Germany. During the middle of this century, West Germany was a capitalistic “free” society, while East Germany was controlled by a socialistic government. Living conditions in East Germany were deplorable and East Germans routinely tried to escape to West Germany. The Berlin Wall was erected by the East German government to keep their own people from defecting. However, eventually, the socialistic East German government and the Berlin Wall both failed and Capitalism and freedom prevailed. Personally, I am very glad to live in a free, Capitalistic society.

Characteristic Pure Socialism Modified Socialism Modified Capitalism Pure Capitalism

Ownership of means of production All publicly owned Much publicly owned Most privately owned All privately owned

LIMIT on accumulation of private property Severe Major limitation Small limitation No limitation

Government REGULATION of economy Yes Yes Yes No

Government MANAGEMENT of economy Yes Yes Yes No

Government PLANNING of economy Yes No No No

Size of welfare system Immense Quite extensive Small to moderate No welfare system

Characteristic Pure Socialism Modified Socialism Modified Capitalism Pure Capitalism

Ownership of means of production All publicly owned Much publicly owned Most privately owned All privately owned

LIMIT on accumulation of private property Severe Major limitation Small limitation No limitation

Government REGULATION of economy Yes Yes Yes No

Government MANAGEMENT of economy Yes Yes Yes No

Government PLANNING of economy Yes No No No

Size of welfare system Immense Quite extensive Small to moderate No welfare system

Word Count: 1078

Leave a Comment

(0 Comments)

Your email address will not be published. Required fields are marked *