Capitalism and Socialism - Assignment Example

Capitalism and Socialism Why has been income inequality and wealth inequality been worsening in the US and aroundthe world during the last three decades? Provide evidence of worsening inequality and then discuss the reasons why (including specific actions, policies of governments) . Income inequality can mean distributing income to people on the basis of their social class that is the rich earning more than the poor in a society. Income inequality and wealth inequality has been worsening in the US and around the world in the last three decades. Brooking institutions researched and found out that income inequality in the year 2013 was rising to alarming rates and negatively affected the US social mobility (Nilufer 21-2). For about 30 years now the income disparity has been notably growing this is after some statics have been carried out. The richest that is 1% of the Americans have so much wealth as compared to the greatest of the poor that’s about 90%.this disparity is increasing now for about 25 years down the line (Ebenstein 12). This has not only affected the United States but nations around the world.Some of the reasons and evidences are discussed below. Education has to a great extent contributed to this income disparity, payment for the educated has been increasing since 1969 in every economic sector. This is because in America less skilled personnel are being dismissed from work because of high competition between businesses and also when businesses adopt new technologies the uneducated have no place which can suit them for they lack the required skills and knowledge. This creates a big gap between the poor and the rich. Class struggle has been one of the major reasons for the worsening of incomeinequality, the gap between the poor and the rich has been widening over the last three decades. Asyear’s advance the rich have been getting far much richer and the poor becoming poorer this is because the resources which can boost the poor are all owned by the rich. This will only change when the governments adjust their policies to suit all people (Nilufer 67). Otherwise this trend will continue till further notice. The Minimum wages policy is another contributing factor. During the periods of Rockfellers and Carnegies in 1915, 1% of the Americans were termed to be the wealthiest as they approximately earned 18% of gross income. In 2007 it rose to 24% but for the three decades it fell to 10%. A new system of taxation, unions being strengthened and moderation of the National Labour Board made the income of the low earners and those working to upgrade by reducing that of the highest earners, this policy lasted only for about three decades. In 2009 the income of middle class totaled to $49777 this is according to data collected during census, it then reduced by 4.2% in the years 2007 and 2009 (Ebenstein 29). Neoliberalism advocates that capital and labour which are some of the factors of production should receive payments which are worthwhile. Americans Keynesians support the neoliberal which states that one should be paid what they are worth. This has caused a lot of disparities in income distribution since people work at different rates and have different abilities hence giving out different results in their performances; this automatically leads to income inequality. Outsourcing can be defined as the process where a company works together with an outside company on contractual basis; this is preferred due to the low cost advantages. Most of the US companies have been out sourcing their products and hence gaining comparative advantages. A greater percentage of the investors in US have also engaged in businesses outside their country this has made them earn more than their fellow investors hence the reasons for the income inequalities (Ebenstein 71). Finally, the communal ideology has a role in the economic systems with respect to resource distribution. Ideology can mean beliefs, visions, objectives that can be set by a group of individual or an individual either knowingly or unknowingly, these ideologies can affect how a community operates whether economically, socially, culturally or politically (Nilufer 41). These ideologies have a great influence to the distribution of income in a community and country at large. 2. What is a social formation ? what is a mode of production ? Define conceptually and then discuss by giving a historically concrete example of a social formation. Social formation is a prevailing pattern of class struggles which follows a certain way of production. This means that one group will consist the capitalists and the other the communists. Mode of production can be defined on the other hand as the way a society organizes production. Slave trade started with twenty Africans landing Virginia in 1619, with time this number grew. The slaves provided labour in the plantations and could work being exploited by the Americansto accumulate wealth. With time the church intervened and condemned the issue of slave trade which later on ended. Industrialization marked the transformation of the economy. It is defined as the change which a country can undergo for example from being an Agricultural producer to being a manufacture of goods and services. Mechanization and use of assembly lines are now the ones being used.in this technology is used instead of mere traditional ways of predicting the whether.it is grew from capitalism. It has led to decrease in reproduction and increase in income (Siddiqui 89). 3.What is patriarchy?Did patriarchy always exist? How did it emerge historically and discuss the various ways in which patriarchy and capitalism interact by giving at least two concrete examples. Be sure to discuss the consequences in terms of distribution of income and wealth and poverty. Patriarchy is a type of social organization where a male heads the family and kinship, title, and descent are outlined through the line of male. Capitalism interact is a type of economic system where ownership of the production means, investment in, exchange of wealth, and distribution is maintained and made chiefly by corporations or private individuals, especially as compared to state or cooperatively-owned wealth means (Nilufer 65). Patriarchy developed at a specific period in history when a number of processes involving cultural, historical, demographic, and ecological factors (developed as lifestyles) changed and new circumstances were adapted. During this period, people were mutually interactive. However, some of these lifestyle processes eventually resulted to male dominance. Male scribes, scholars, and historians have created a number of explanatory systems, belief systems, and heroes in various civilizations. This has made women to be left out and not recognized until fairly recently. Further, the culture of male-female partnership and equality was introduced. Historically, patriarchy used to be referred to the rule of autocratic by male who were the heads of their families (Ebenstein 77). However, in modern times patriarchy is referred to social systems where power is among the adult men. The relation between capitalism and patriarchy is that of partnership. Although patriarchy and capitalism work together, some research say that they are not similar systems. In the 19th century, the family wage idea was accepted along with the separate spheres notion. This is one case where capitalism change or adjust to patriarchy. The capitalists are not happy about the better pay to males than before. Moreover, they reinforce the patriarchal (separate spheres) idea. The capitalists are contributing to gender class systems like racial class and racism systems to function as mechanisms of social control hence serving capitalism (Nilufer 71-2). On the other side, patriarchy sometimes will adjust to capitalism. For instance, patriarchy is not happy of giving more control to mothers over their children than before as it is in custody cases. Therefore, patriarchy and capitalism form a type of partnership thus; each will make concessions to wants of the other. Patriarchy affects different sectors of the economy. A number of researches show that women have low or no share in income or earnings in the family. Patriarchy does not allow gender equality and this exclude woman from working outside home. For this reason, women are most vulnerable to poverty. Moreover, female become totally dependent on their men economically. Gender inequality also makes women to have more burden of household work and this makes them not to be productive. Patriarchy gives males the power to decide in their houses (Alam 31). This brings unequal opportunities and thus poverty gets in. Women were not allowed opportunities to higher education and this caused difficulty in labor markets. Patriarchy does not allow equal distribution of resources and this affects poverty alleviation. 4. How do “traditional” economists conceptualize the sphere of the economy? Why is it important to engage in this re-conceptualization? Traditional economists’ concept of the sphere of the economy was purely based on paid economy, production of commodities that are market based and commodity production. According to these economists, commodities that o not fetch returns in the markets were not supposed to be produced. A market economy is the one whereby the decisions about what to produce, how to produce and for who to produce are purely guided by the forces of supply and demand. In other words, production, investments and distribution decisions are determined by supply and demand in the economy. The major feature of this kind of market is that, decisions as to investment and allocation of capital is largely made though markets. As such, traditional economists’ idea was that only the market forces, that is, supply and demand should guide the economy on what to produce (Siddiqui 78). In the commodity economy, production is purely made for exchange purposes. It involves production of only those goods and services which are aimed for market rather than consumption by the consumers. The idea of the traditional economists kind of provoked some sort of selfishness in the sense that it only advocated for products that would go straight to the market and ignored the rest. Again, the conceptualization allowed only a paid economy thereby assuming exchange (Ebenstein 121). According to traditional economists, if goods will not pay then they should not be produced. One great weakness of this conceptualization is because it encourages production of those commodities that will trade in the market, and ignores production of goods and services that will not pay off to the producers. This concept is inhumane in the sense that it means individuals will not have access of such products that do not pay off to the producers. Services like provision of water, security, sewerage, etc. are left unattended. Reconceptualization is necessary through measures like advocating for planned economy and the government undertaking production of those commodities that do not pay off (Alam 48). This will adds value and humane to the economic system. 5. Why is capitalism unsustainable? How do we have to transform it? Under capitalism system of economy, means of production are entirely meant for a profit. This mode of economy is largely criticized especially by socialists as unsuitable due to a number of reasons. First, it encourages inequality. The common mantra amongst capitalists that anybody is capable of becoming rich and wealthy if they work hard is fallacious. So as to create wealth, initially you have to get it from someone else. This could be through trading things, taxation or other similar means. But this suggests that there can never exist rich people without poor ones, hence equality is impossible under capitalism. Secondly, capitalism is unsuitable because it encourages waste of resources. In a community where economic resources are unevenly distributed it is obvious that there will be the rich who have plenty of resources. While at times the excess resources are allocated to the poor, the often the surplus is wasted (Siddiqui 89). Capitalism is viewed as anti-social. The motive for profit is far much higher than altruism. When people are more concerned with what they have in their pockets, then they lose the drive to help the needy as they only focus on themselves, people develop the feeling of satisfying their own needs first. Capitalists amerce wealth at the expense of people’s welfare. Since owners of business are motivated by the urge to make more profits, they often do this by reducing remunerations to the employees. This strategy accrues much benefit to the business entity but the workers suffer economically as they cannot afford basic needs. Capitalism is thus unsuitable and there is need for transformation (Siddiqui 80-4). Capitalism builds up because of free market. To transform it therefore requires employing some aspects of control in the economy. The private sector should not be given total autonomy to run the economy. People should be taught values like sharing and come up with a sustainable system of growth. 6. What are the three most important ideas you learned in this class? That is unique to this class? (I.e. ideas that will remain with you beyond this exam). In this program, I have learned much about social attributes and values that I must engrave into my lifestyle so as remain helpful and supportive to the rest of society, especially the less fortunate. It is possible to conduct ethical business that recognize the value of employees and employ such concepts like corporate social responsibility. Understanding that business, progress is directly attributable to the society calls for ethics in practice. This calls for need to strike a balance between aggressiveness and ethical values in the society (Alam 71). Throughout the reading in this class, the focus of the study was social-welfare and the underlying economic theories. The learning has enhanced my understanding on how the capitalism and socialism play a significant role in determining our economic wellbeing and other socio-economic policies. In the reading, I have acquired knowledge on the different economic systems including planned and mixed economy. However, of importance is the fact that although economy may be managed, economic liberalization and freedom of exchange is critical for economic growth and development. The learning has been important in building my understanding of economic concepts such as inequality in the distribution of economic resources. Through capitalism and social inequality, the distribution of economic resources is skewed with the higher class controlling nearly eighty percent of the resources, hence, widening of the poverty gap between the poor and the rich. 7. Is another economic system possible? It is possible to have another economic system which is more humane and puts into consideration ethical factors of people. Mixed economy is one type of economic systems that can possibly redress the limitations of capitalism by advocating for ethical economy. Mixed economy is an economic system characterized by presence of government regulation in production. Both the private and the government sector direct the means of production, thereby portraying the elements of both planned and market economies with strict regulatory check to ensure that production does not occur at the expense of the citizens. Although private enterprise still has great dominance in the market, government plays a significant role in regulation of the economy through such mechanisms such as fiscal policies and monetary policies which tend to lure producers towards production of goods and services they would otherwise not (Ebenstein 86). The government also plays a significant role in coming up with policies and legal stipulations that encourage employment in the industry and protection of social welfare of the people (Siddiqui 67). Countries ranging from Cuba to United States are perfect demonstrators of mixed economies in the world. The state provides environmental protection, maintenance of competition, upholding of employment standards, and welfare system that is standardized. This kind of economy thus factors in the element of ethics and social values. Works cited Alam, A. Impact of gender discrimination on gender development and poverty alleviation. Sarhad J. Agric. 2010, 27(2): 329-339 Ebenstein, W. Today's isms; communism, fascism, capitalism, socialism (7th ed.). Englewood Cliffs, N.J.: Prentice-Hall. 2003. Nilufer. Gender and poverty: Social development and poverty elimination. Working Paper Series. 2008. Siddiqui, K. Social formation in Dhaka, 1985-2005 a longitudinal study of society in a third world megacity. Farnham, Surrey [U.K.: Ashgate. 2010. Read More