– Socialist or Capitalist?
Describe your vision of a model economic system – is it capitalist, socialist, or somewhere in between? In your answer be sure to compare and contrast the two major economic systems (capitalism and socialism).
According to Henslin (2014), “capitalism is an economic system built around the private ownership of the means of production, the pursuit of profit, and market competition” (p. 394). This type of society gives the power to the people or essentially power to the owner of whatever product or profit he or she is trying to make. It allows for individuals to have a significant amount of freedom. In general the government will not interfere but rather a system of laws will protect citizens.
On the other end of the spectrum is socialism. Henslin (2014) states, “socialism is an economic system built around the public ownership of the means of production, central planning, and the distribution of goods without a profit motive” (p. 395). This economy is essentially government owned and rules out the idea of competition for goods and prices. Everything is run and owned by the government from top to bottom. Products are now produced for their use value or human need no longer for profit gain. Items are now made to satisfy the economic needs instead of for profit. In my understanding it is a system to make everything fair and equal.
My model economic system would have to be somewhere in between a capitalist and socialist society. I say this for several reasons. First, in a capitalist society profit is made from ones needs. Having worked in the medical field I think it’s unjust to make a significant amount of profit selling medications to those with terminal illnesses, children with cancer, HIV, and so on. Many times this system is abused by its producers and the victims are those who need the most help. An issue I can see with the socialist society is that even though this society may attempt to control each aspect of society and make things fair for each citizen or of equal power, this is not always the case. For example what the government may see as a needed product may not be the case throughout different parts of the country. It may assume that one area should have an increase or decrease in a specific product but if the assumptions are wrong than the citizens suffer. How is a citizen supposed to feel safe enough to speak up in a society about something they think needs to be changed when all the power is within the government? This would fundamentally be telling the government they are wrong about choices they have made. From some of the countries with a socialist economy this could be taking a risk in my point of view. With all control being to the government the citizens are often helpless to make a change. I can only assume that each country may suffer or flourish from a specific economy. This means to me that governments should be willing to adopt a different economy if needed to better suit its people.
Henslin, J. (2014). Sociology: A down to earth approach. (12th ed.). Boston: Pearson
(Jun 11, 2014 7:30 PM) – Read by: 2Reply
I chose this article because it goes more in depth into some of the issues faced with a socialist economy but also explains how this economy could possibly be beneficial today. It debates the alternative or actual need to adapt from current economies. According to Li (2013) “mainstream economic theory, both public (state or collective) ownership of the means of production and centralized economic planning were fatally flawed. The problem with central planning was that given the complexity of the modern economy, it was impossible for the central planner to collect and process the enormous amount of economic information required for rational economic decisions” (p. 13). This essentially means that to give all control to the government is flawed. You can get a general idea of economic needs for your country but without the ability to know every detail someone is going to suffer. On the other end of the spectrum even though a capitalist society seems to be the optimal choice it also has its flaws. Li (2013) states, “capitalist economies suffer from monopolies, moral hazards, asymmetric information, lack of complete futures markets, externalities, and the problem of public goods” (p. 16). Capitalism certainly seems to produce a significant amount of economic growth but not always in the right way or type. One of the negative aspects to a capitalist economy and its increasing economic growth is that due to the endless production of goods that are run on fossil fuels the earth’s temperature would continue to rise. Li (2013) states, “Only with a combination of zero economic growth and rapid reduction of emission intensity (which in turn requires massive infrastructure transformation), does humanity have a realistic chance to achieve a level of climate stabilization consistent with the preservation of civilization” (p. 38). I just thought it was interesting the dramatic and severe consequences differences in economy could have on our survival. I always thought of economies from a financial standpoint. I never contemplated them in a life or death scenario.
Li, M. (2013). The 21st Century: Is There An Alternative (to Socialism)?. Science & Society, 77(1), 10-43. doi:10.1521/siso.2013.77.1.10